Shares of Novo Nordisk A/S (NVO) tumbled 6.03% in pre-market trading on Wednesday, extending the previous day's sharp decline. The Danish pharmaceutical giant is grappling with a series of challenges that have eroded investor confidence and prompted multiple analyst downgrades.
The steep drop follows Novo Nordisk's unexpected downgrade of its full-year guidance for 2025. The company now forecasts sales growth of 8-14% and operating profit growth of 10-16%, significantly lower than previous projections. This revision stems from weaker-than-anticipated demand for its blockbuster weight loss drugs Wegovy and Ozempic in the U.S. market, where the company faces mounting pressure from competitors and regulatory hurdles.
Several factors are contributing to Novo Nordisk's market headwinds. The proliferation of compounded GLP-1 drugs, which are unbranded alternatives allowed under FDA loopholes, has eroded Wegovy's market share and undermined the company's pricing power. Additionally, rival Eli Lilly's Zepbound, which has demonstrated superior efficacy in clinical trials, is intensifying competition in the obesity drug market. In response to these challenges, the company has appointed veteran insider Maziar Mike Doustdar as its new CEO, tasking him with navigating the company through this turbulent period. Despite these setbacks, Novo Nordisk maintains a strong pipeline of next-generation treatments and is actively pursuing strategies to regain market share, including litigation against compounding pharmacies and the introduction of more competitive pricing models.
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