Novo Nordisk Crash 24% Premarket, Cuts Full-Year Outlook

One of the two leading weight-loss drug makers, Novo Nordisk, has collapsed.

On July 29, ahead of the U.S. market open, Danish pharmaceutical giant Novo Nordisk slashed its full-year revenue and profit guidance. In local currency terms, the company now expects 2025 revenue growth of just 8%–14% (down from 13%–21% previously), and operating profit growth of 10%–16% (previously 16%–24%).

The downgrade triggered a wave of selling. As of press time, Novo Nordisk’s U.S.-listed shares had plunged 24% in premarket trading.

What happened to the company once crowned Europe’s most valuable corporation?

In its earnings update, Novo Nordisk lamented that cheap copycat drugs have significantly hurt its profitability. After its blockbuster obesity drug Wegovy hit the market, a surge of low-cost generics flooded in, severely undercutting demand for the original. In addition, sales of its flagship diabetes drug Ozempic in the U.S. have fallen short of expectations.

Initially priced at $1,349 per month, Wegovy had to be slashed to under $500 due to generic competition—a price cut of more than 60%, effectively making it a money-losing product.

While Wegovy was a smash hit upon release, its high cost, lack of insurance coverage, and limited production capacity created room for cheaper imitations. Under U.S. law, generic drugs are permitted when a drug is deemed in short supply.

Can Novo Nordisk fight back?

By late May, production capacity for Wegovy improved, and the drug was no longer in shortage. The U.S. Food and Drug Administration (FDA) subsequently ordered a halt to unauthorized Wegovy generics. However, market demand for low-cost obesity drugs remains strong, and enforcement resources are limited, allowing underground channels to continue.

The FDA ban did help to some extent: since the ban took effect on May 22, new prescriptions of Wegovy have risen by 33%.

Novo Nordisk says it will fight back with legal tools and ramp up its direct-to-patient marketing efforts.

Patent defeat: Are generics set to flood the market?

Though the FDA ban on Wegovy generics is still in place, that may soon change. Mylan, a generics-focused drugmaker, is preparing to launch a cheaper version of Wegovy. Novo Nordisk took legal action, but recently lost a critical court case.

After reviewing Novo Nordisk’s patent claims, a judge ruled that the Wegovy patent failed to meet the necessary protection standards. The ruling paves the way for Mylan to proceed with development, potentially opening the door to a wider wave of Wegovy substitutes.