Novo Nordisk Shares Surge as Wegovy Recovery Gains Momentum in U.S. Market

COPENHAGEN — Novo Nordisk’s shares rose nearly 7% this week as investors bet on a turning point for its blockbuster obesity drug Wegovy, after the company outlined a clear path to overcoming U.S. market disruptions caused by unauthorized compounded generics. The Danish pharmaceutical giant’s revised 2025 guidance, while tempered by near-term headwinds, painted a picture of resilience and strategic agility, with Wall Street now pricing in a rebound starting in the second quarter.

The catalyst for optimism? The U.S. Food and Drug Administration’s (FDA) recent declaration that the 2023 drug shortage that fueled compounded knockoffs has ended. By May 22, pharmacies must cease producing unapproved versions of Wegovy and Ozempic, Novo’s diabetes drug-turned-obesity sensation. This regulatory crackdown, CEO Lars Fruergaard Jorgensen said, would “knock off” rivals and allow Wegovy’s sales to rebound—starting as early as June.

Navigating the Compounded Drug Challenge

Compounded generics, which doctors can prescribe as alternatives to branded drugs, captured an estimated one-third of the U.S. obesity drug market in 2024. Enabled by the FDA’s temporary shortage designation, these cheaper alternatives undercut Wegovy’s pricing, contributing to a 13% quarterly sales drop in Q1 2025. However, annual sales growth remained robust at 83%, underscoring the drug’s enduring demand.

Novo’s revised 2025 sales growth forecast now sits at 13%–21%, down from an earlier 16%–24%, with operating profit growth trimmed to 16%–24%. Analysts, however, view this as a “clearing event,” as noted by Markus Manns of UBS. The removal of compounded competition by mid-2025 is expected to free up market share, especially with CVS Health’s decision to exclude Eli Lilly’s rival Zepbound from some reimbursement lists and prioritize Wegovy in its formulary.

Strategic Moves to Reclaim Momentum

To accelerate recovery, Novo is doubling down on direct-to-consumer access. Its online pharmacy partnerships with telehealth companies like Hims & Hers and LifeMD aim to undercut compounded drug prices while building patient loyalty. The company also highlighted its $24 billion U.S. investment over the next decade—a signal of its long-term commitment to the American market.

Geopolitical risks, such as potential pharmaceutical tariffs, were dismissed by Jorgensen, who emphasized Novo’s deep U.S. footprint, including 10,000 employees and domestic manufacturing hubs. “We’re not going anywhere,” he said, reinforcing investor confidence in the company’s stability.

Looking Ahead: CagriSema and the Next Phase

While the Q2 recovery hinges on regulatory enforcement, Novo is already laying groundwork for future dominance. A filing for its next-generation drug CagriSema—combining semaglutide with a diabetes medication—is expected by early 2026. An oral semaglutide formulation, if approved, could further expand the GLP-1 receptor agonist market, currently led by Wegovy and Ozempic.

Conclusion: A Strong Foundation for Growth

Despite near-term turbulence, Novo Nordisk’s Q1 2025 results demonstrate underlying strength: EBIT rose 22% year-over-year to $5.9 billion, while Wegovy’s 83% annual sales growth reflects unmet demand. With compounded competition fading and strategic partnerships solidifying its position, the company is poised to reclaim lost ground.

The stock’s 7% surge post-earnings suggests investors are pricing in a Q2 inflection point, aligning with the FDA’s timeline and CVS’s formulary shift. Meanwhile, the pipeline innovations—CagriSema and oral semaglutide—position Novo to defend its leadership against competitors like Roche and AstraZeneca.

For now, the market’s bet on Wegovy’s recovery appears well-founded. As Jorgensen noted, “The foundation is in place. We’re ready to accelerate.” With the U.S. obesity drug market projected to hit $15 billion by 2026, Novo’s ability to capitalize on this opportunity could drive sustained gains for shareholders. The next few months will test whether the company can turn regulatory clarity into sustained momentum—and investors are watching closely.