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Health care industry

Novo Nordisk's Reversal: How a Valuable Company Lost Its Edge

Strategic Insights

— 2 min read

In a stunning reversal of fortunes, Novo Nordisk, the Danish drugmaker behind the popular diabetes drug Ozempic, has seen its share price plummet over 50% this year, pushing it out of the top ten list of Europe's most valuable companies. The company's struggles began when it failed to keep pace with competition from American drugmaker Eli Lilly and the rise of cheap copycat versions of its drugs. Despite making $24 billion in global sales in the first six months of the year, Novo Nordisk reiterated that it expects growth to slow in the rest of the year, leading to a further decline in its stock.

Key Takeaways:

  • Novo Nordisk's share price has plummeted over 50% this year, pushing it out of the top ten list of Europe's most valuable companies.
  • The company's struggles began when it failed to keep pace with competition from American drugmaker Eli Lilly and the rise of cheap copycat versions of its drugs.
  • Despite making $24 billion in global sales in the first six months of the year, Novo Nordisk reiterated that it expects growth to slow in the rest of the year.
  • The company's stress was heightened by the fact that more than one million people were still using compounded GLP-1s, eating into the company's market share.
  • Novo Nordisk has filed 14 new lawsuits against compounders, but analysts say it has been difficult to stop them.
  • Eli Lilly has caught up with Novo Nordisk by introducing a daily pill, orforglipron, which has shown promising results in late-stage clinical trials.
  • Novo Nordisk's pipeline struggles to impress, with investors and analysts particularly interested in the prospects of weight-loss pills.
  • A new leader, Maziar Mike Doustdar, took over as CEO of Novo Nordisk, but analysts say there may not be much he can do to change the company's fortunes in the short term.

Statistics:

  • Novo Nordisk's share price has plummeted over 50% this year.
  • The company made $24 billion in global sales in the first six months of the year.
  • More than one million people are still using compounded GLP-1s, eating into the company's market share.
  • Eli Lilly's Zepbound passed Wegovy in new prescriptions in the United States, according to IQVIA.
  • Eli Lilly's orforglipron tablets led to 12% weight loss, slightly less than analysts expected.
  • Novo Nordisk has filed 14 new lawsuits against compounders.

Sources:

  • "Novo Nordisk's stock tumbles as analysts doubt ability to revive prospects" by Eshe Nelson, The New York Times.
  • "Eli Lilly's weight-loss pill outperforms Novo Nordisk's" by Eshe Nelson, The New York Times.
  • "The market's got no patience for Novo" by Gareth Powell, Polar Capital.
  • "It's just the market's putting zero value on it" by Gareth Powell, Polar Capital.
  • "Novo is issuing a lot of cease-and-desist orders, but it has been very difficult to stop them" by Rajesh Kumar, HSBC.
  • "The F.D.A. said this year that the shortage was over and ordered producers and sellers of the copycat weight-loss drugs to wind down" by Eshe Nelson, The New York Times.
  • "Lilly was doing all these things, and Novo wasn't" by Emily Field, Barclays.
  • "It felt like a lot of this was one big own goal" by Emily Field, Barclays.

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