Novo Nordisk: Is the Ozempic Hype Train Finally Slowing Down?

Published 31/07/2025, 16:34
Updated 31/07/2025, 16:44

Yesterday, we reported that Novo Nordisk (NYSE:NVO) stock crashed over 20% in premarket trading yesterday. The main culprit is the reduced sales forecast for the company’s flagship obesity drug Wegovy, going down from May’s 21% growth projection to just a 14% sales increase throughout 2025.

Ahead of Q2 earnings scheduled for August 6th, does this suggest the Danish pharma giant is on a continued stock slide?

Over the week, NVO shares have dropped 27.6%, presently priced at $50 per share, which is its lowest yearly price point against the 52-week average of $92.69. Typically, investors would see this as a buy opportunity given the large and ever-increasing obesity market, but this time, that may not hold true.

Novo Nordisk’s Precarious Market Position

In our May coverage of the obesity giants, Novo Nordisk vs Eli Lilly (NYSE:LLY), we reported that Novo Nordisk holds the first mover advantage with a 62% market share in the GLP-1 treatment of diabetes. These flagship drugs – Ozempic and Wegovy – have become synonymous with weight loss. Specifically, Ozempic for type 2 diabetes and Wegovy for reduction of cravings.

At the same time, it is also the case that Eli Lilly is fast closing the gap with its own solutions. In fact, in Q1 earnings report, Eli Lilly reported its Zepbound drug to achieve 20.2% average weight loss compared to Novo Nordisk’s 13.7% with Wegovy. In terms of waist circumference, this translates to an 18.4 cm reduction for Zepbound, compared to just 13 cm for Wegovy.

In addition to intensifying competition, Novo Nordisk faces market saturation. Namely, the Food and Drug Administration (FDA) allows for drug copycats when the agency deems they are in short supply. This practice is called drug compounding.

“Compounding is generally a practice in which a licensed pharmacist, a licensed physician or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.”

Unfortunately, Novo Nordisk itself paved the road for this practice against Wegovy following the company’s supply chain issues since the drug’s launch in the second half of 2021. Only in February 2025 did FDA officially declare the end of semaglutide injection products (Ozempic and Wegovy) shortage.

It is now up to Novo Nordisk to clean up the momentum of drug compounding with legal action, which is likely to be a prolonged process with dubious results. In other words, it is not at all clear if drug compounding after the FDA declaration is actually illegal. Of course, this leaves more space for Eli Lilly to push the purportedly superior Zepbound, which was also approved for sleep apnea in late 2024.

Novo Nordisk’s Leadership Shift as Another Concern for Shareholders

In conjunction with cut sales forecasts for Wegovy, Novo Nordisk changed its CEO, from native Lars Fruergaard Jørgensen to Iran-born Maziar Mike Doustdar. The new CEO Doustdar has been working for the company as Executive Vice President (EVP) of International Operations since 2015.

Interestingly, unlike Jørgensen with his 34-year stint in the company, Doustdar doesn’t even have Danish citizenship but is Austrian citizen. Moreover, he lives in Switzerland together with his family, who hold Dutch citizenship. However, under his International Operations leadership, Doustdar is credited with doubling sales to around 112 billion DKK ($17.23 billion) in 2024.

“I come to this role with a sense of urgency, a laser focus on high performance, and a fierce determination for Novo Nordisk to aim higher than it’s ever done, and to deliver to many more patients the innovation they need.” Official statement from the new Novo Nordisk CEO Maziar Mike Doustdar on July 29th.

Speaking of innovation, is Novo Nordisk pipeline likely to offset its shifting market position?

Novo Nordisk Pipeline

For 2026, the company plans to file a submission for CagriSema, having already been proven to drive significant weight loss in Phase 3 trials. The name CagriSema comes from cagrilintide and aforementioned semaglutide. Cagrilintide is a long-acting peptide that mimics pancreatic hormone amylin, critical for regulating blood sugar levels and suppressing appetite.

According to the latest study published in The New England Journal of Medicine, the combination of both compounds has a 13.7% body weight loss against 3.4% loss in the placebo group. However, study participants reported gastrointestinal adverse events at 72.5% vs 34.4% in the placebo group.

To compete against its own Wegovy, Novo Nordisk is also investigating Amycretin, a unimolecular agonist of both GLP-1 and amylin receptors (regulating blood glucose and satiety among other functions). Amycretin’s late stage trials are scheduled for next year, but initial trial results show that Amycretin’s dual action leads to 24.3% weight loss with 60mg dosing.

Novo Nordisk reported that Amycretin’s gastrointestinal adverse effects are in line with the already approved Wegovy. More importantly, early studies suggest the drug’s dual action doesn’t lead to a weight plateau, something that is often reported with Eli Lilly’s Zepbound.

Current Novo Nordisk Analyst Sentiment

Unlike Eli Lilly, which has 1 sell, 3 hold and 22 analyst buy recommendations, Novo Nordisk has 3 sells, 11 holds and 16 buys, according to WSJ forecasting data. Against the current NVO price of $48.70, the average NVO price target is $84 per share, with even the lowest outlook significantly above the current price level.

Despite this, the sentiment is clearly against Novo Nordisk, which may worsen after the Q2 earnings report on August 6th.

Judging by study reports, both companies are fighting over marginal obesity drug improvements. Nonetheless, Novo Nordisk’s Amycretin looks promising if it turns out to have a lack of weight plateau combined with equal adverse effects to Wegovy.

In this light, it may be the case that the market overreacted to Novo Nordisk’s drug compounding problem. After all, if Ozempic is already a household brand, it wouldn’t be too difficult to transfer that solid branding to a better drug.

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