Novo Nordisk faces defining 12 months within the weight problems drug market

Novo Nordisk entered 2026 with the momentum of a historic 12 months in additional methods than one — however current weeks have delivered extra drama than most firms may anticipate 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 current challenges have centered round defending its market share within the blockbuster weight reduction drug market, all whereas its inventory value 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 upset 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 earnings may decline as a lot as 13% this 12 months. 

“Sufficient has occurred up to now week to occupy a couple of volumes,” stated Deutsche Financial institution analyst Emmanuel Papadakis on Tuesday, as he — like lots of his Wall Road friends — lowered his value goal on the inventory following the gloomy outlook.

The fast information circulate has given buyers whiplash. Thus far this calendar 12 months, U.S.-listed Novo shares have traded throughout a ramification 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 former CEO was ousted over misjudging the U.S. market and challenges there, has a plan to steer the corporate by what’s been described as a “present me” 12 months. 

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

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

“We may have extra sufferers this 12 months than ever earlier than, we’ll produce greater than final 12 months and years earlier than that,” he stated. 

Doustdar stated round 246,000 sufferers are presently on the corporate’s Wegovy tablet, which launched in the beginning 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 aspect 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 stated. 

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

Telehealth corporations like Hims have profited massively from promoting so-called compounded variations of injectable semaglutide beneath a regulatory loophole that enables different firms to promote copycats of the medicine if the branded medicines are in brief provide. Whereas branded semaglutide injections are now not in brief 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 informed CNBC on Wednesday, noting that Novo’s opposition has nothing to do with medically essential compounding for particular person circumstances. 

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 rapidly backed down after Novo stated it could sue over patent infringement and the FDA introduced a broader crackdown on compounding. The company additionally stated 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 in opposition to pharmacies, wellness clinics and different corporations unlawfully advertising these copycats. 

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

From the viewpoint of U.S. regulators, eradicating cheaper medicine 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 stated. 

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

“That may destroy the trade.”

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

Doustdar referred to as it “a really sturdy sign” that the federal government acknowledged the compounding struggle 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 getting ready to launch its personal oral model. 

The battle for U.S. market share may quantity to a must-win for Novo — the load 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 spot 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 develop into the popular medication amongst sufferers and prescribers, regardless of launching years after Novo’s medicine. 

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 greater 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 fully new sufferers. Doustdar has stated 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 anticipated to launch its rival weight reduction tablet, orforglipron, within the second quarter of 2026. Traders are intently 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 had been just a little bit late to reach at,” TD Cowen analyst Michael Nedelcovych informed 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 primarily based on separate scientific 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. 

“In the event you use these two numbers, principally you’ve gotten a 40% distinction between the efficacy of those capsules,” he stated. “I believe that is going to be a really important, important promoting level of the tablet.”

When Lilly ultimately launches orforglipron, its main advertising level will probably be geared toward convincing clients that the Wegovy tablet is inconvenient due to sure meals restrictions. That makes Novo’s head begin additional necessary because it gives them an opportunity to put the groundwork and persuade individuals of the opposite.

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

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

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

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

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

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

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

“Given the issues that they had final 12 months, they do not wish to overpromise and underdeliver,” he stated. 

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

However the value sensitivity of shoppers for weight reduction medicine stays a giant unknown, which makes higher volumes and extra entry factors necessary. 

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

Round 67 million People are coated by Medicare, however “whenever you check out particularly our merchandise and the goal group, I believe round 15 million individuals can be a great quantity to focus on,” Doustdar stated. Although he stated Medicare entry to weight problems remedies will open up regularly. 

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

Doustdar stated that larger dose helps sufferers lose round 21% of their weight, which is “very a lot on par” with the very best dose of Zepbound. Wegovy, beneath its permitted doses, has proven round 15% weight reduction on common in scientific trials. 

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

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

BMO’s Seigerman stated it is tough to say whether or not that would be the case, as Zepbound is already entrenched as one of the best product within the injectable market.  

Later this 12 months, Novo expects its next-generation therapy 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 upset buyers, coming in beneath the anticipated 25% weight reduction on common. 

On Wednesday, Doustdar stated the corporate was “penalized fairly harshly by the inventory market” for these outcomes, which confirmed round 23% weight reduction. However he stated the drug can be “top-of-the-line merchandise on the market” if it had been accessible immediately. 

To evaluate the actual efficacy of the drug, “it’s essential take a look at all the info collectively,” he added, pointing to a few upcoming section three trials for the drug, together with one research that pits CagriSema in opposition to Zepbound. 

When requested whether or not Novo must additional diversify away from weight problems like rivals, 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 stated the underlying biology and severity of the situation differ extensively – 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 continuing 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 mirror 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.