Novo Nordisk Loses USD 50 Billion as Obesity Drug Price War Triggers Profit, Sales Warning
New Delhi: Novo Nordisk's shares tumbled on Wednesday, knocking nearly USD 50 billion in value from the Danish obesity drug giant, as it warned that "unprecedented" price pressures would lead to a sharp decline in sales and profits this year.
Wegovy maker Novo shocked the market late on Tuesday by guiding to a potential drop in profits and sales of up to 13% this year, ending years of double-digit gains, as U.S. President Donald Trump's drive to cut drug costs cranks up already fierce competition in the lucrative weight-loss sector.
"Our 2026 guidance reflects a year of unprecedented pricing pressure," CEO Doustdar told journalists on a call, adding he hoped the "painful" impact would be an "investment for our future".
The 16% share plunge, which spread to other obesity drugmakers - unravelled a promising start to the year for Novo on strong sales of its new Wegovy pill and piles pressure back on Doustdar amid a major turnaround push.
Novo has lost ground to U.S. rival Eli Lilly, which has streaked ahead in terms of U.S. prescriptions and forecast 2026 profit above Wall Street estimates on Wednesday. The pressure in the U.S. is being driven by a larger-than-expected shift toward self-paying patients and rising rebate demands from insurers, even more than by the Trump administration's "most favored nation" policy to reduce drug prices, Chief Financial Officer Karsten Munk Knudsen told Reuters in an interview.
U.S. sales are expected to fall in the "teens", Knudsen said, signalling a potentially steeper drop than the company's forecast of a 5% to 13% overall sales decline this year.
NOBODY WAS EXPECTING A DOUBLE-DIGIT DECLINE
Novo said that there were now far more companies looking to break into the obesity drug market and that it could not promise a return to the "extraordinary growth rates" of recent years.
"Novo has provided shocking guidance for 2026," said Markus Manns, a portfolio manager at Union Investment that holds Novo and Eli Lilly shares.
"Nobody had a double-digit profit decline on the agenda."
Sales rose 10% last year, and analysts had, on average, forecast a 2% decline this year, according to a company-compiled poll.
LOWER PRICES, COPYCAT THREATS
Novo is selling lower doses of its daily pill in the United States for $149 per month for self-paying patients, rising to $199 in April. Lilly plans to cap higher doses of its obesity pill, if approved, at $399 a month for repeat cash buyers.
Both companies have reduced prices of their injectables for customers not paying with health insurance. Novo began selling its Wegovy injection at $349 a month to cash payers in November.
Novo said it expects adjusted operating profit and adjusted sales at constant exchange rates both to fall between 5% and 13% this year. It blamed lower realised prices, especially in the U.S., fierce competition, and the expiry of patents on semaglutide - the active ingredient in its Wegovy and Ozempic drugs - in some markets outside the United States.
It is also facing a challenge from copycat drugs, with as many as 1.5 million Americans using compounded versions of GLP-1 weight-loss medications rather than branded products.
CFO Knudsen said Novo is "still frustrated" that "mass marketing of a product unapproved by the FDA" is continuing, and said it was up to the U.S. regulator and U.S. politicians to address this. "Predicting if and when the tide turns is really hard," Munk said, referring to the compounding market.
NEW ORAL DRUG SALES PROVIDE 'HOPE'
Novo said weekly prescriptions for oral Wegovy hit around 50,000 by January 23, well above the 20,000 per week from market tracking data that does not capture sales via cash-pay channels such as NovoCare and telehealth services.
Union Investment's Manns said the strong pill sales, with consumers seemingly willing to pay out of their own pockets, offered "a glimpse of hope".
Knudsen told reporters that so far some 90% of Wegovy pill sales in the U.S. were cash-pay, which was helping drive a new channel of demand via telehealth partners.
"The pace that telehealth partnerships are helping us is tremendous," he said.
Novo's Wegovy launch in June 2021 ignited a boom in demand for obesity drugs and meteoric growth for the Danish company. In 2024, it was Europe's most valuable listed company, worth over $600 billion. At the close on Tuesday it was $259 billion. ($1 = 0.8455 euros)
