The Ozempic Dilemma: Can Novo Nordisk Navigate the Copycat Surge?

The obesity and diabetes market is in turmoil. Novo Nordisk, the Danish pharmaceutical giant behind the blockbuster drugs Ozempic and Wegovy, has slashed its 2025 sales and profit growth forecasts, citing "lower-than-planned penetration of branded GLP-1RA treatments in the U.S." The culprit? A surge in compounded versions of semaglutide—a cheaper, off-label alternative produced by compounding pharmacies during earlier supply shortages. This development marks a pivotal test for Novo Nordisk’s dominance in a category it once controlled outright.

The Guidance Cut: A Short-Term Hurdle or Long-Term Threat?
Novo Nordisk now expects 2025 sales growth of 13-21% (down from 16-24%) and operating profit growth of 16-24% (down from 19-27%). While Q1 2025 revenue rose 18% year-on-year to DKK78.1bn, driven by a 65% surge in obesity drug sales (Wegovy) and 11% growth in diabetes sales (Ozempic), the compounded drug issue has clearly taken a toll. Compounded semaglutide, which bypasses Novo’s patents and branding, has siphoned demand in the U.S.—the company’s largest market.

But here’s the paradox: despite the guidance cut, Novo Nordisk’s U.S. supply chain is now largely stabilized. The FDA declared an end to Ozempic/Wegovy shortages in February 2025, and the company has ramped up production, including a $6.5bn U.S. manufacturing investment. This suggests the compounded drug surge was a temporary problem, exacerbated by supply constraints. However, illegal online sales of compounded semaglutide persist, and Novo Nordisk is now waging a legal battle to shut down these operations.

The Biosimilar Looming Over 2026
While compounded drugs are a near-term issue, the real long-term threat lies in biosimilars. Hangzhou Jiuyuan Gene Engineering’s Jiyoutai—a biosimilar of semaglutide—has completed late-stage trials in China. However, its commercialization hinges on resolving patent disputes. Novo Nordisk’s U.S. and EU Ozempic patents expire in 2026, but in China, the expiry is delayed until 2026 as well.

Analysts at GlobalData estimate Wegovy’s peak sales could reach $26bn by 2031, assuming Novo can defend its patents and navigate biosimilar competition. But the company’s aggressive production investments—such as its AI-powered "Find My Meds" app to streamline patient access—suggest it’s preparing for a prolonged battle.

The Bottom Line: A Steep Hill, but Manageable?
Novo Nordisk’s guidance cut is a clear setback, but the fundamentals remain strong. The obesity market is booming, with global demand projected to grow at 12% annually through 2030. Even with compounded competition, Ozempic and Wegovy’s efficacy and regulatory approvals give them a significant edge over unbranded alternatives.

Moreover, the company’s Q1 results show resilience: diabetes and obesity care sales hit DKK73.5bn, a 17% year-on-year increase. The compounded issue appears to be a U.S.-specific speed bump, not a global crisis. Meanwhile, biosimilar threats are still years away, allowing Novo to fortify its position.

Investors should monitor two key metrics: U.S. market share recovery (post-shortage) and the timeline for Jiyoutai’s regulatory approval in major markets. If Novo can stabilize its U.S. position by 2026 and delay biosimilar competition beyond that, the stock (NNI) could rebound.

In conclusion, Novo Nordisk’s guidance cut is a necessary course correction, not a death knell. With $6.5bn in production investments, a robust pipeline (including once-monthly obesity drugs), and a still-dominant market share, the company remains the GLP-1RA leader. The path forward is fraught with competition, but the prize—a multibillion-dollar obesity market—remains worth fighting for.

Data as of Q1 2025. Always consult a financial advisor before making investment decisions.