Novo Nordisk faces defining year in the obesity drug market

Novo Nordisk entered 2026 with the momentum of a historic 12 months in additional methods than one — however latest weeks have delivered extra drama than most firms may count on over a decade.

The Danish drugmaker kicked off the 12 months with the explosive launch of the first-ever GLP-1 tablet for weight problems. Its latest challenges have centered round defending its market share within the blockbuster weight reduction drug market, all whereas its inventory worth swings wildly.

This week, Novo sued upstart telehealth supplier Hims & Hers for alleged patent infringement and obtained its personal warning from the Meals and Drug Administration for what the company says is deceptive claims in promoting. That each one adopted a 2026 outlook that dissatisfied buyers and stood in stark distinction to its chief rival, Eli Lilly. 

Whereas Lilly guided to 2026 gross sales development of 25%, Novo forecast that gross sales and income may decline as a lot as 13% this 12 months. 

“Sufficient has occurred previously week to occupy a couple of volumes,” mentioned Deutsche Financial institution analyst Emmanuel Papadakis on Tuesday, as he — like a lot of his Wall Avenue friends — lowered his worth goal on the inventory following the gloomy outlook.

The fast information movement has given buyers whiplash. To this point this calendar 12 months, U.S.-listed Novo shares have traded throughout an expansion starting from $43.24 to $64.16, shedding as a lot as 14% in a single day solely to achieve 10% again in a later session. 

The newest developments add to a thorny scenario for Novo because it dangers being edged out by Lilly and cheaper compounded variations of semaglutide, that are unapproved copycats of Novo’s Wegovy jab.

CEO Mike Doustdar, who took the reins in August after the previous CEO was ousted over misjudging the U.S. market and challenges there, has a plan to steer the corporate by means of what’s been described as a “present me” 12 months. 

His agenda is intensive: cracking down on these compounded knockoffs, sustaining robust demand for its newly launched weight problems tablet, constructing prescription volumes within the U.S. and bringing new next-generation weight problems and diabetes therapies to market.  

In an interview with CNBC on Wednesday, Doustdar acknowledged the challenges forward however mentioned 2026 “can be a 12 months of development in some ways.” 

“We may have extra sufferers this 12 months than ever earlier than, we are going to produce greater than final 12 months and years earlier than that,” he mentioned. 

Doustdar mentioned round 246,000 sufferers are at the moment on the corporate’s Wegovy tablet, which launched firstly of January and is already outpacing the early rollouts of current GLP-1 injections.

“This, after all, tells me that whereas the buyers are feeling a little bit of a headwind on the pricing facet and the entire enterprise as you are alluding to, they’re hopefully getting satisfied that over a time frame that will wash out and that development will come,” Doustdar mentioned. 

Novo has repeatedly cited compounding pharmacies as a key purpose for its slowing gross sales development. The corporate estimates 1.5 million People are at the moment taking the copycat weight reduction medication provided by Hims & Hers, in addition to some wellness clinics and compounding pharmacies. 

Telehealth companies like Hims have profited massively from promoting so-called compounded variations of injectable semaglutide underneath a regulatory loophole that enables different firms to promote copycats of the medication if the branded medicines are briefly provide. Whereas branded semaglutide injections are not briefly provide after a notable demand spike, the businesses have continued to mass market cheaper variations on to shoppers, elevating authorized questions. 

“We perceive why compounding, mass compounding, received began. It was on the again of a scarcity. We actually do not perceive why it continued,” Doustdar instructed CNBC on Wednesday, noting that Novo’s opposition has nothing to do with medically vital compounding for particular person instances. 

Hims final week introduced plans to promote a compounded model of Novo’s newly launched Wegovy tablet for roughly $100 lower than Novo sells the branded model for, although it shortly backed down after Novo mentioned it could sue over patent infringement and the FDA introduced a broader crackdown on compounding. The company additionally mentioned it had referred Hims to the Division of Justice over potential violations. 

Novo moved to sue Hims on Monday over compounded variations of each injectable and oral semaglutide, including to greater than 130 lawsuits the drugmaker has filed towards pharmacies, wellness clinics and different companies unlawfully advertising these copycats. 

“The information final Thursday concerning the tablet… was seen as form of the final straw for many individuals,” Rothschild & Co Redburn analyst Simon Baker instructed CNBC. 

From the perspective of U.S. regulators, eradicating cheaper medication from the market at a time when the Trump administration has made decrease drug costs for People a precedence may not have been a simple promote, Baker mentioned. 

However, “once we received the transfer on the tablet, there was a realization that this has simply gone a little bit bit too far,” he added. “You’ll be able to’t have folks launching knock-off variations of capsules 5 weeks after the model will get launched.”

“That will destroy the business.”

If Novo can get the compounding subject underneath management, the corporate can probably win again some market share and switch issues round for gross sales projections, mentioned BMO Capital Markets analyst Evan Seigerman. 

Doustdar referred to as it “a really robust sign” that the federal government acknowledged the compounding combat with Hims and “articulated that very publicly. We welcome that.” 

After all, a authorities crackdown on compounding would not clear the way in which for Novo alone. 

Lilly’s weight problems drug Zepbound already enjoys vital market share, and the corporate is making ready to launch its personal oral model. 

The battle for U.S. market share may quantity to a must-win for Novo — the burden loss phase accounted for greater than half of its gross sales in 2025.

Lilly is estimated to have round 60% of the branded GLP-1 market globally, whereas Novo has about 39%. Novo has additionally highlighted a niche within the “choice share” for Wegovy versus Lilly’s injections. 

Lilly’s weight problems drug Zepbound has proven extra pronounced weight reduction than Wegovy and has turn out to be the popular medication amongst sufferers and prescribers, regardless of launching years after Novo’s medication. 

Within the U.S., Novo estimates that between 7 and eight sufferers out of 10 go to Lilly.

In the meantime, within the compounding market, the share of copycats for Novo’s drug far outweighs that of Lilly’s.

“It is a curious query as to why within the branded market, Lilly has a a lot larger share than Novo however within the compounded market, there’s much more of Novo’s molecule than there’s of Lilly’s,” Baker famous. “We do not know the reply.”

Novo is banking on the Wegovy tablet to assist with its eroding market share and says it is already reaching completely new sufferers. Doustdar has mentioned that 88% of individuals on the tablet are taking the bottom starter dose of the drug, signaling that many sufferers have been ready on oral choices. 

Lilly is predicted to launch its rival weight reduction tablet, orforglipron, within the second quarter of 2026. Buyers are carefully watching how that can pan out, particularly as Novo has misplaced its first-mover benefit earlier than. 

“They’re placing numerous muscle behind the advertising of [Wegovy pill], together with now a reinvigorated direct-to-consumer channel, which they have been a little bit bit late to reach at,” TD Cowen analyst Michael Nedelcovych instructed CNBC. “That appears to be paying dividends.”

Doustdar touted the tablet’s efficacy, which is on par with the Wegovy injection and superior to Lilly’s oral drug based mostly on separate medical trials. The Wegovy tablet confirmed round 16.6% weight reduction on common in comparison with roughly 12.4% on common with Lilly’s oral drug. 

“When you use these two numbers, principally you may have a 40% distinction between the efficacy of those capsules,” he mentioned. “I feel that is going to be a really major, major promoting level of the tablet.”

When Lilly finally launches orforglipron, its main advertising level will seemingly be geared toward convincing prospects that the Wegovy tablet is inconvenient due to sure meals restrictions. That makes Novo’s head begin additional vital because it affords them an opportunity to put the groundwork and persuade folks of the opposite.

Novo contends that these dietary necessities will not hinder uptake. However Leerink Companions analyst David Risinger instructed CNBC final week that it may assist Lilly’s tablet finally generate better gross sales globally.

Nonetheless, whereas gross sales of each firms’ medication might soar, costs are coming down throughout the board.

The GLP-1 market is dealing with broad worth erosion following landmark “most favored nation” offers between firms and the Trump administration. It is unclear how a lot of the value decline may be offset by quantity will increase.

“Irrespective of how effectively we do initially to meet up with the value lower … after all mathematically, [it] takes a little bit of time,” Doustdar mentioned, including the corporate is “very hopeful” and “working day and night time to speed up these quantity uptakes.” 

Analysts largely consider Novo is being deliberately cautious with its gross sales projections, baking within the anticipated pricing pressures. 

“There are a selection of pushes and pulls in 2026, some have fairly excessive visibility, some have decrease visibility… I feel Novo have added within the issues of excessive visibility greater than the issues of low visibility,” mentioned Baker.

The place there’s increased visibility is the place pricing is coming down, generics in Canada and some different markets, and restrictions on Medicaid for a few of their medication, Baker mentioned: “They have these negatives in fairly absolutely.”

“Given the issues they’d final 12 months, they do not need to overpromise and underdeliver,” he mentioned. 

Novo’s steering seemingly would not embrace any discount within the quantity of compounded medication in the marketplace, because the FDA’s announcement of its “decisive steps” to limit GLP-1 compounding got here after the steering was launched. 

However the worth sensitivity of shoppers for weight reduction medication stays an enormous unknown, which makes better volumes and extra entry factors vital. 

Novo is anticipating Medicare protection for weight reduction therapies, anticipated to start later this 12 months, to open up a 15 million-patient alternative, Doustdar instructed CNBC. 

Round 67 million People are lined by Medicare, however “while you check out particularly our merchandise and the goal group, I feel round 15 million folks could be a great quantity to focus on,” Doustdar mentioned. Although he mentioned Medicare entry to weight problems therapies will open up steadily. 

Novo can be pinning its hopes on different medication in its pipeline to assist it claw again market share. That features a increased dose – 7.2 milligrams – of Wegovy, which is ready for FDA approval and will make the drug a stronger competitor to Zepbound. 

Doustdar mentioned that increased dose helps sufferers lose round 21% of their weight, which is “very a lot on par” with the very best dose of Zepbound. Wegovy, underneath its accepted doses, has proven round 15% weight reduction on common in medical trials. 

“When that involves the market, my thought, my want, my hope is that folks will notice, OK, now we have now two merchandise with comparable efficacy,” Doustdar mentioned. 

He added that “hopefully may even change the dynamic as we go ahead,” referring to the market’s rising choice for Zepbound.

BMO’s Seigerman mentioned it is troublesome to say whether or not that would be the case, as Zepbound is already entrenched as the perfect product within the injectable market.  

Later this 12 months, Novo expects its next-generation remedy referred to as CagriSema to enter the market. That experimental weekly injection combines semaglutide with cagrilintide, which mimics one other intestine hormone referred to as amylin. 

Novo Nordisk has defended CagriSema’s trial outcomes, which dissatisfied buyers, coming in underneath the anticipated 25% weight reduction on common. 

On Wednesday, Doustdar mentioned the corporate was “penalized fairly harshly by the inventory market” for these outcomes, which confirmed round 23% weight reduction. However he mentioned the drug could be “the most effective merchandise on the market” if it have been obtainable in the present day. 

To evaluate the true efficacy of the drug, “you’ll want to take a look at all the information collectively,” he added, pointing to a few upcoming section three trials for the drug, together with one research that pits CagriSema towards Zepbound. 

When requested whether or not Novo must additional diversify away from weight problems like opponents, Doustdar argued that the corporate would not see weight problems or diabetes as a single, monolithic illness and sees extra alternative in creating a number of, specialised therapies inside the class.

Whereas the world labels thousands and thousands of sufferers merely as “overweight,” he mentioned the underlying biology and severity of the situation fluctuate broadly – from somebody who must lose a modest quantity of weight to somebody with extreme issues like fatty liver illness requiring a transplant. 

And because the market matures, Novo’s gross sales are nonetheless rising year-on-year on a relentless forex foundation, albeit at a slower tempo than earlier than. Solely time will inform when, or if, that can change.

Correction: This story has been revised to replicate that Novo Nordisk shares have traded within the vary of $43.24 to $64.16 this calendar 12 months. A earlier model misstated the time vary of the buying and selling unfold.