The Weight of Expectations: Novo Nordisk’s Revised Outlook and the Obesity Drug Market’s New Realities

The Danish pharmaceutical giant Novo Nordisk has revised its 2025 financial outlook downward, signaling a pivotal shift in the trajectory of its blockbuster weight-loss drug Wegovy. Once hailed as a transformative therapy, Wegovy’s sales growth has slowed, driven by U.S. market headwinds, compounded drug alternatives, and intensifying competition. The revision—from a revenue growth target of 16%–24% to 13%–21%—reflects not just short-term turbulence but a broader reckoning with the evolving dynamics of the GLP-1 receptor agonist (GLP-1) market.

The U.S. Market Stumble
Wegovy’s stagnation in the U.S., its largest market, has been the primary catalyst for the outlook cut. Compounded alternatives—cheaper, off-patent versions of semaglutide produced by pharmacies under an FDA drug-shortage designation—eroded demand. These alternatives, though legal until the FDA removed Wegovy from its shortage list in February 2025, accounted for an estimated 30% of U.S. prescriptions. Novo Nordisk expects compounded alternatives to fade by mid-2025, potentially unlocking a rebound in branded sales. Yet the damage to market share and patient trust may linger.

Competitive Pressures Mount
While compounded drugs created immediate friction, the longer-term threat comes from rivals like Eli Lilly. Lilly’s Mounjaro and Zepbound, which also target obesity and diabetes, have outperformed Wegovy in some regions. More critically, Lilly’s push for an oral GLP-1 drug—a potential game-changer for patients weary of weekly injections—has raised the stakes. Novo Nordisk’s response? An oral semaglutide formulation and its next-gen drug CagriSema, slated for regulatory filings in 2026.

The data underscores Wegovy’s meteoric rise: U.S. sales surged 39% year-on-year in Q1 2025, even as quarterly sales fell 13% from the prior quarter. Yet the company’s broader revenue rose 18%, highlighting Wegovy’s centrality to its growth story—and the risks of overreliance on a single product.

Executive Strategy and Skepticism
CEO Lars Fruergaard Jørgensen framed the slowdown as a temporary setback, citing “lower-than-planned branded GLP-1 penetration” due to compounded alternatives. To counter this, Novo Nordisk is expanding access via telehealth partnerships and its Novo Care program, aiming to reduce barriers to prescription. CFO Karsten Munk Knudsen, however, tempered optimism about U.S. regulatory fixes, noting that President Trump’s push to fast-track pharmaceutical plant approvals is unlikely to yield results within the next decade.

Market Optimism Amid Uncertainty
Despite the revised outlook, Novo Nordisk’s shares rose ~5.5% in premarket trading, reflecting investor confidence in a second-half recovery. Analysts point to the FDA’s May 2025 deadline for compounded pharmacies to cease sales as a catalyst, though enforcement challenges loom. Meanwhile, the company’s pipeline—bolstered by CagriSema’s promise of superior efficacy and an oral formulation—offers a path to sustained dominance.

Conclusion: Navigating the GLP-1 Crossroads
Novo Nordisk’s revised outlook is a stark reminder of the fragility of even the most promising drug franchises. While compounded drugs and competition have dented near-term growth, the company’s long-term prospects hinge on executing its pipeline strategy and maintaining regulatory leverage. Key data points reinforce this calculus:

• Market Share Recovery: If compounded alternatives fade as expected, U.S. Wegovy sales could rebound to pre-2025 growth rates by year-end.
• Pipeline Momentum: CagriSema’s potential 2026 approval offers a high-value successor to Wegovy, with trials showing superior weight loss in some cohorts.
• Competitive Landscape: Lilly’s oral GLP-1 drug, if approved, could still upend the market. Novo Nordisk’s own oral formulation must match this or cede ground.

The stock’s premarket bounce (despite the outlook cut) suggests investors are pricing in a rebound. Yet the path to sustained growth remains fraught with regulatory, competitive, and operational risks. For investors, the question is whether Novo Nordisk’s innovation and scale can outpace the headwinds—or if the GLP-1 race has already entered a new phase where no single player can dominate indefinitely.

In the end, the obesity drug market’s “weight of expectations” now falls squarely on Novo Nordisk’s ability to innovate faster than its rivals and adapt to a world where compounded alternatives are but a fleeting challenge. The next 12 months will reveal whether this Danish giant can regain its balance—or if the scales have tipped toward a new era of competition.