Novo Nordisk Stock Drops 20% Amid Concerns Over GLP-1 Market

Novo Nordisk shares plummeted 20% in a single day, marking a 60% decline over the past year. The market reaction seems excessive, especially considering Novo Nordisk's dominance in the GLP-1 market. However, the decline may be justified by concerns over the future of GLP-1s and potential competition from other diabetes treatments.

Novo Nordisk A/S (NVO) shares plummeted by 21.83% on July 29, 2025, following a significant profit warning and a series of market concerns. The Danish pharmaceutical giant announced that it expects 2025 sales to grow at a slower pace, with full-year sales growth projected to be 8% to 14%, down from its previous range of 13% to 21% [1]. The company also cut its operating profit forecast to 10% to 16%, from 16% to 24% [1].

The primary driver behind the profit warning was Novo Nordisk's blockbuster obesity drug, Wegovy (semaglutide). The company cited persistent use of compounded GLP-1s, slower-than-expected market expansion, and competition as key factors contributing to the lower sales outlook [2]. Additionally, a Delaware court ruled that patents for a weight loss drug manufactured by Viatris do not infringe on Wegovy, further exacerbating Novo Nordisk's market challenges [2].

The market reaction to the profit warning was swift and severe. Novo Nordisk's stock price, which was trading at $53.94 after the 21.83% decline, fell below its short and long-term moving averages, indicating a bearish trend [1]. The Relative Strength Index (RSI) was in the oversold zone, suggesting that the stock could bounce back from those levels [1]. However, the company's technical chart also displayed a worsening bearish trend, as indicated by its MACD line and exponential moving averages [1].

The concerns over Novo Nordisk's future are not unfounded. The company's market dominance in the GLP-1 market has been under threat from competitors, particularly Eli Lilly, which has seen its tirzepatide outperform semaglutide in recent studies [2]. Additionally, Novo Nordisk's late-stage pipeline has faced challenges, with rising competition and slower-than-expected clinical trial results [3].

Investors and financial professionals should closely monitor Novo Nordisk's future developments, as the company's market position and financial health remain uncertain. The appointment of a new CEO, Maziar Mike Doustdar, suggests that the company is taking steps to address its challenges and restore its market position [2]. However, the road ahead is fraught with uncertainty, and investors should proceed with caution.

References:
[1] https://www.benzinga.com/markets/equities/25/07/46716995/novo-nordisk-charts-signal-weakness-amid-wegovy-warning-expert-says-couldve-played-out-very-differently-if-they-had-embraced-hims
[2] https://finance.yahoo.com/news/novo-nordisk-shares-plummet-2025-115752366.html
[3] https://ng.investing.com/news/analyst-ratings/barclays-downgrades-novo-nordisk-stock-rating-on-obesity-market-concerns-93CH-2032723