Is Now the Time to Buy Novo Nordisk Using Options Strategies?

In the volatile world of GLP-1 therapeutics, Novo Nordisk (NVO) has faced a perfect storm of challenges in 2025. A 300% surge in its share price over three years has given way to a sharp correction, with the stock trading at $52.41 as of August 15, 2025—well below Morningstar's $71 fair value estimate. This disconnect between fundamentals and price creates a compelling case for long-term investors to consider cash-secured put strategies as a way to gain discounted exposure while generating income in a market still grappling with regulatory and competitive headwinds.

The Fundamentals: A Tale of Two Giants

Novo's struggles stem from three key factors:
1. Slower adoption of obesity drugs compared to its peak growth years.
2. Rising competition from Eli Lilly's Mounjaro/Zepbound, which captured 57% of the GLP-1 market in Q2 2025.
3. Proliferation of compounded semaglutide, a loophole allowing unapproved, cheaper versions of Novo's drug to persist in the U.S. market.

Despite these headwinds, Novo's long-term moat remains intact. Its pipeline includes a 2026 launch of oral semaglutide, which could outpace Lilly's delayed oral GLP-1 (orforglipron). Additionally, expansion into MASH and Alzheimer's trials offers new revenue streams. The company's 18% Q2 2025 top-line growth, though slower than prior years, underscores its resilience in a crowded market.

The Options Angle: Cash-Secured Puts in a Discounted Market

With NVO trading at a 26% discount to Morningstar's fair value, the question becomes: How can investors position for a potential rebound while earning income? The answer lies in cash-secured puts, a strategy that allows investors to sell put options at a strike price below the current stock price, collecting premiums while committing to buy the stock at that price if assigned.

Key Opportunities in the August 2025 Options Chain

For example, consider the $50 put option expiring August 2025:
- Premium: $0.03
- Strike Price: $50
- Current Stock Price: $52.41

By selling this put, an investor earns $0.03 per share ($30 for a contract) while committing to buy NVO at $50. If the stock stays above $50 by expiration, the investor keeps the premium—a 0.06% return on the $5,000 cash commitment. If the stock drops below $50, the investor purchases it at a 4.6% discount to the current price.

For those willing to accept a deeper discount, the $45 put offers a $0.03 premium (3.0% discount to current price) with a 0.07% return on cash. While the risk of assignment is higher, the potential reward—owning NVO at $45—aligns with Morningstar's $71 fair value thesis.

Longer-Dated Plays: September 2025 and Beyond

For investors with a longer time horizon, September 2025 puts provide additional flexibility. The $50 put here has a $0.42 premium, offering a 0.84% return on cash. This extended timeline allows Novo to navigate its 2026 oral GLP-1 launch and potential regulatory clarity on compounded drugs.

Risk and Reward: Balancing Volatility and Opportunity

The GLP-1 market is inherently volatile, with Lilly's aggressive expansion and compounded drug sales posing near-term risks. However, Novo's strong R&D pipeline and first-mover advantage in oral GLP-1s suggest a path to regaining market share. The key is to structure put strategies that balance premium income with downside protection.

For instance, selling the $50 put while holding cash for potential assignment creates a cost-averaging opportunity. If NVO rebounds to $71, the investor's effective cost basis (e.g., $49.97 after premium) would yield a 42% return. Even in a worst-case scenario where the stock drops further, the premium income offsets losses.

Strategic Entry Points for Long-Term Investors

The current environment offers a unique intersection of undervaluation, income generation, and strategic positioning:
1. Undervaluation: NVO's $52.41 price is 26% below Morningstar's $71 fair value.
2. Income: Puts like the $50 strike generate 0.06–0.84% returns on cash.
3. Growth Potential: A successful 2026 oral GLP-1 launch could unlock significant upside.

Investors should also consider diversifying strike prices to balance risk. For example, pairing the $50 put with a $55 put (lower premium, higher strike) creates a collar that limits downside while capturing income.

Final Thoughts: A Calculated Bet on a Resilient Giant

Novo Nordisk's challenges are real, but its long-term fundamentals remain robust. By leveraging cash-secured puts, investors can gain discounted exposure to a company with a $71 fair value target while earning income in a market that's pricing in uncertainty. This strategy is not without risk—GLP-1 competition is fierce—but for those with a 12–18 month time horizon, it offers a disciplined way to participate in Novo's potential rebound.

As the GLP-1 landscape evolves, patience and strategic positioning will be key. For long-term investors, the current discount and income opportunities make now an attractive time to consider NVO through options.