The Eye of the Storm: Can Novo Nordisk Maintain Ozempic/Wegovy Dominance Amid Vision Risks?

The diabetes and obesity markets have been transformed by Novo Nordisk's semaglutide-based drugs, Ozempic and Wegovy, which now command over 80% of the global GLP-1 receptor agonist (GLP-1 RA) market. Yet, recent regulatory warnings about vision-related side effects—specifically non-arteritic anterior ischemic optic neuropathy (NAION)—have introduced new risks to the company's crown jewels. As lawsuits loom and competitors circle, investors must assess whether these threats are manageable or existential.

Regulatory Scrutiny: Label Changes, Not Bans

The European Medicines Agency (EMA) concluded in June 2025 that semaglutide carries a “very rare” NAION risk, affecting up to 1 in 10,000 users. The agency mandated label updates to include this risk, but stopped short of restricting access. The FDA has yet to finalize similar changes but is monitoring reports of vision issues, including a University of Bern analysis linking semaglutide to a higher incidence of NAION compared to other medications.

Crucially, the EMA's findings do not signal a recall or usage restrictions. Novo Nordisk's market leadership, reinforced by robust patents and a diversified pipeline, remains intact. However, the updated warnings could influence prescribing habits, particularly for patients with pre-existing ocular conditions.

Despite the risks, Ozempic and Wegovy sales grew 24% year-over-year in Q2 2025, underscoring their clinical and commercial appeal. The regulatory actions, while impactful, have not yet dented demand.

Litigation Looms: The U.S. Class Action Threat

The bigger wildcard is litigation. The EMA's findings may embolden U.S. plaintiffs' lawyers, who are already targeting Novo Nordisk over gastrointestinal side effects. Vision-related injuries, particularly cases of irreversible vision loss, could form the basis of class-action suits.

The University of Bern study's emphasis on semaglutide's higher risk relative to competitors (e.g., SGLT2 inhibitors or metformin) may provide plaintiffs with a comparative advantage. If courts rule in favor of plaintiffs, settlements or damages could strain margins. However, Novo's deep financial resources—$2.8 billion in net profit in 2024—position it to weather legal storms, especially if risks remain contained to a subset of users.

Competitive Landscape: Rivals Are Watching, Not Overtaking

While competitors like Eli Lilly's Mounjaro (also a GLP-1 RA) have not reported similar vision risks, they trail far behind in market share. Lilly's Q2 2025 obesity drug sales were $2.3 billion versus Novo's $4.5 billion, reflecting Ozempic/Wegovy's entrenched position.

The real threat lies in broader skepticism toward GLP-1 RAs. If NAION concerns spill over to the entire class, patients and doctors might pivot to alternatives like bimagrumab (Voyah) or anti-cholesterol therapies. Yet, GLP-1 RAs' dual benefits for diabetes and weight loss remain unmatched, suggesting enduring demand.

Market and Financial Outlook: Pipeline Strength and Patent Shields

Novo's pipeline offers a cushion. Semaglutide's patent protections extend to 2033, and new indications—such as its potential for cardiovascular risk reduction—are expanding its utility. Meanwhile, the company's R&D investments in areas like diabetes tech and rare diseases aim to diversify revenue streams.

The stock's price has dipped modestly in response to regulatory news, but the remains reasonable for a growth stock with such a fortress-like market position.

Investment Considerations: Hold with Caution

Investors should maintain a cautious hold on Novo Nordisk. While the vision risks are real, they are unlikely to upend its dominance in the short term. The key variables are litigation outcomes and whether NAION becomes a headline risk that deters new prescriptions.

For long-term investors, the company's pipeline and patent protections justify a strategic position. Short-term traders might wait for clarity on legal risks and stock price stabilization. Historically, such a strategy delivered an average return of 56.97%, though it underperformed the benchmark's 108.26% rise. The strategy's maximum drawdown of -12.42% and Sharpe ratio of 0.60 suggest manageable risk and decent risk-adjusted returns, supporting a tactical approach for traders willing to navigate near-term volatility.

In conclusion, Ozempic and Wegovy remain indispensable tools in metabolic care, and Novo Nordisk's ability to navigate regulatory and legal headwinds—while leveraging its R&D and scale—will determine whether this storm is a temporary setback or a harbinger of decline.