Novo Nordisk Stock Plummets 21% Amid Revised Sales Projections and CEO Appointment

Novo Nordisk has experienced a significant drop in its share value, shedding more than 21% after announcing a downward revision in its full-year sales and operating profit forecasts for the second time this year. The Danish pharmaceutical company, known for its weight-loss drug Wegovy, faces increased competition in the obesity drug market, particularly from US rival Eli Lilly.

The company attributed its lowered sales outlook to weaker-than-expected growth in the United States obesity market for Wegovy, as well as for Ozempic in the US GLP-1 diabetes market. Novo Nordisk also cited slower-than-anticipated penetration for Wegovy in certain international markets. As a result, the company now projects sales growth of 8%-14% for 2025 in local currencies, a revision from its previous forecasted range of 13%-21%. Operating profit growth expectations have also been adjusted downward to 10%-16%, from an earlier estimate of 16%-24%.

Despite these revised forecasts, Novo reported an 18% year-on-year growth in sales for the second quarter and the first half of the year. The company's operating profit increased by 40% in the second quarter (April to June) and by 29% in the first half of the year.

The ongoing success of Wegovy had propelled Novo to the top of Europe's market capitalization rankings in 2024, with the company's value peaking at approximately €615 billion. However, the valuation has halved since then.

Amid these challenges, Novo Nordisk announced the appointment of Maziar Mike Doustdar as its new CEO. Doustdar is a veteran of the company, having joined in 1992, and previously served as vice-president for international operations. His appointment comes after the unexpected departure of former CEO Lars Fruergaard Jørgensen.

Doustdar's immediate task will be to enhance Novo's performance in the US, where the market for weight-loss drugs is the largest and most lucrative. Although Novo introduced Wegovy well before Eli Lilly's Zepbound, Wegovy's prescriptions have been overtaken by Zepbound's, with a deficit exceeding 100,000 prescriptions per week this year.

The appointment and strategic pivot come in a challenging global pharmaceutical landscape, further complicated by geopolitical factors, including potential tariffs on imports and demands for reduced US prescription prices led by political figures such as Donald Trump.