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Investing.com -- Novo Nordisk (NYSE:NVO)’s guidance reduction and CEO resignation represent a "double surprise" according to BMO Capital Markets analyst Evan David Seigerman.
In a note to clients, Seigerman, who maintains a market perform rating on the Danish drugmaker, identified "multifaceted headwinds" affecting the company’s performance.
The analyst highlighted lower growth expectations for Novo Nordisk’s key products in the United States - obesity drug Wegovy and diabetes medication Ozempic. International markets are also showing lower-than-expected penetration for Wegovy.
"Lower Wegovy sales expectations were specifically impacted by continued/higher-than-expected compounding in the US market and slower-than-expected market expansion in light of competition," Seigerman wrote, suggesting Eli Lilly (NYSE:LLY)’s tirzepatide as the likely competitive pressure.
The underperformance of Ozempic in the US market is "accentuated by competition," with the company’s incretin portfolio facing more pressure than management initially anticipated.
Despite these challenges, Seigerman struck a more positive note regarding the company’s leadership change, suggesting that "the global perspective of a non-Danish CEO could re-energize and refocus the struggling strategy."
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