Novo Nordisk Stock Falls Over 20% on Revised Sales Forecast and Market Competition

Novo Nordisk’s (NYSE: NVO) stock plummeted over 20% in pre-market trading following a downward revision of its sales forecast for Wegovy, its flagship obesity drug. The company now expects a 14% sales increase through 2025, down from a 21% growth projection in May [1]. Over the past week, NVO shares have lost 27.6%, trading at $50 per share—its lowest price of the year compared to a 52-week average of $92.69. This sharp decline raises concerns about the company's future performance and its dominant position in the GLP-1 obesity and diabetes drug market [1].

Novo Nordisk currently holds a 62% market share in the GLP-1 treatment space, with Ozempic and Wegovy as its leading products. Ozempic is primarily used for type 2 diabetes, while Wegovy targets weight loss through appetite suppression [1]. However, Eli Lilly (NYSE: LLY) is rapidly gaining ground. In Q1, Eli Lilly’s Zepbound demonstrated a 20.2% average weight loss compared to Wegovy’s 13.7%. In terms of waist circumference reduction, Zepbound outperformed Wegovy with an 18.4 cm reduction versus 13 cm. Furthermore, Zepbound received approval for treating sleep apnea in late 2024, expanding its therapeutic appeal [1].

Compounding the challenge for Novo Nordisk is the increasing prevalence of drug compounding—a practice in which pharmacists create personalized versions of drugs when supply is low. The FDA allows this in cases of drug shortages, and Novo Nordisk’s supply chain issues since the 2021 launch of Wegovy contributed to the proliferation of compounded alternatives. It was not until February 2025 that the FDA officially declared the end of the semaglutide injection shortage [1]. This has left a regulatory gray area regarding the legality of compounding after the shortage was resolved, potentially allowing for continued use of these alternatives.

In addition to these external pressures, Novo Nordisk recently underwent a leadership change. Lars Fruergaard Jørgensen, who had led the company for over 30 years, was succeeded by Maziar Mike Doustdar, an Austrian citizen and former Executive Vice President of International Operations. Under Doustdar’s leadership, international sales grew to approximately 112 billion DKK ($17.23 billion) in 2024 [1]. Doustdar has emphasized a focus on high performance and innovation, but his lack of Danish citizenship and residence in Switzerland raises questions about his alignment with the company’s long-term cultural values.

Looking ahead, Novo Nordisk is preparing to file for approval of CagriSema in 2026. This combination drug, made of cagrilintide and semaglutide, has demonstrated a 13.7% body weight loss in clinical trials—significantly more than the 3.4% seen in the placebo group. However, the trial also reported higher gastrointestinal adverse events, with 72.5% of participants experiencing side effects compared to 34.4% in the placebo group [1]. The company is also developing Amycretin, a dual-action GLP-1 and amylin receptor agonist that has shown promising 24.3% weight loss with 60mg dosing and reported side effects similar to Wegovy. Early data also suggest that Amycretin may avoid the weight plateau issue commonly associated with Eli Lilly’s Zepbound [1].

Analyst sentiment remains mixed. While Novo Nordisk has 3 sell, 11 hold, and 16 buy recommendations, its average stock price target stands at $84, significantly above the current $48.70 [1]. However, the prevailing market mood appears bearish, with the Q2 earnings report on August 6th likely to influence investor confidence. The broader obesity drug market is highly competitive, and Novo Nordisk faces both regulatory and commercial headwinds that could impact its ability to maintain its leadership position [1].

Despite these challenges, Novo Nordisk’s strong brand recognition and ongoing innovation pipeline suggest the company is not out of the race. If its new drugs demonstrate clear advantages in efficacy and safety, the market may yet recognize their potential. For now, the recent stock plunge appears to reflect a combination of competitive pressures, supply chain challenges, and leadership uncertainty [1].

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[1] https://coinmarketcap.com/community/articles/688b83c00e7f1f47655e29a8/