Novo Nordisk Slumps 3.2%—What’s Driving the Dive?

• NVO plunges to $68.71, down 3.24% intraday as short-term bearish pressure builds.
• Italian factory approval boosts long-term prospects but fails to offset near-term concerns.
• Competitor Eli Lilly (LLY) surges on Mounjaro demand, contrasting NVO’s 52-week low proximity.

Today’s drop erases $1.3 billion in market cap, with the stock testing support near its 200-day average. The sector’s mixed performance—LLY up 0.8%—hints at structural shifts in the obesity drug race.

GLP-1 Rivalry and Supply Concerns Weigh on Momentum
The sell-off reflects intensified competition from Eli Lilly’s Mounjaro and Zepbound, which now account for nearly half LLY’s revenue. Novo’s Wegovy faces generic threats in India post-patent expiry, while its higher-dose EU submission aims to defend market share. Additionally, lingering supply chain uncertainties—despite the resolved U.S. semaglutide shortage—keep investors cautious. Analysts note that NVO’s reliance on GLP-1 drugs leaves it vulnerable to pricing pressures and仿制药 challenges.

Pharma Sector Mixed as Lilly Outshines in Obesity Race
While Novo Nordisk struggles, sector leader Eli Lilly (LLY) rises 0.8% on surging obesity drug demand. The contrast highlights NVO’s dependency on Wegovy versus LLY’s broader pipeline momentum. Both companies face generic threats but Lilly’s oral semaglutide pipeline and geographic diversification provide near-term resilience. Investors are pricing in NVO’s longer-term risks tied to patent cliffs and regulatory approvals.

Bearish Bias Calls: Top Puts and Calls for the Downturn
• Bollinger Bands: Current price ($68.71) hovers near the lower band (63.67), signaling oversold conditions.
• RSI: 39.00 (deep undervalued territory).
• MACD: Negative crossover (-0.49 vs -0.27 signal line) confirms bearish momentum.
• 200-Day MA: $72.25—key resistance level.

Traders should focus on bearish plays with protective stops. NVO20250718P68 (Put) offers high leverage (70.31%) with a strike near current price. Its delta (-0.385) and gamma (0.108) amplify downside gains. NVO20250718C67 (Call) provides a contrarian play at delta 0.74, benefiting from potential rebound rallies. Both contracts have strong turnover (18,928 and 15,762 shares traded).

Payoff Example: In a 5% drop to $65.27, NVO20250718P68 delivers $2.73 profit (max gain). Aggressive bears may layer puts at $67 strikes for added leverage. Avoid calls above $70 until price recovers to $72 resistance.

Backtest Novo Nordisk Stock Performance
The backtest of Novo Nordisk's (NVO) performance after an intraday plunge of at least -3% shows favorable short-to-medium-term gains. The 3-day win rate is 57.29%, the 10-day win rate is 60.38%, and the 30-day win rate is 60.38%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest period was 4.46%, suggesting that while the stock may experience volatility, it has the potential for recovery and even gains following a significant drop.

Bearish Momentum Threatens—Watch for Support Breaks
Novo Nordisk’s slide underscores structural challenges in its obesity drug dominance. While the $2.34B Italian factory bolsters long-term production, near-term headwinds from generic threats and rival innovation loom large. Bulls need to see a sustained close above $70 to reverse the downtrend. Traders should monitor the $63.67 lower Bollinger Band and LLY’s performance as a sector benchmark. Action Alert: Short positions in NVO20250718P68 remain viable until the stock recovers to $72. The path of least resistance remains lower until these catalysts shift.