Shares in Wegovy maker Novo Nordisk continued to slide 5% on Wednesday as analysts warned of persistent competition from copycat drugs in the U.S., a day after a profit warning and the naming of a new CEO prompted investors to wipe $70 billion off the drugmaker's value.
Novo Nordisk on Tuesday slashed its outlook for 2025 sales growth and said it had appointed veteran insider Maziar Mike Doustdar as its new CEO.
Novo, which became Europe's most valuable listed company following the launch of Wegovy in 2021, was worth as much as $615 billion at its peak in June last year. But its shares have fallen by two-thirds on concerns the drugmaker is losing ground in the obesity drug race.
Shares closed down 23% on Tuesday after trading as much as 30% lower. On Wednesday, they had fallen a further 3.1% by 0846 GMT.
Novo said the lower sales outlook reflected competition from "compounded" copycats to Wegovy - custom-made medicines that are based on the same ingredients as branded drugs - which took investors by surprise.
The company's management failed to reassure investors on a call with investors and analysts on Tuesday, when incoming CEO Doustdar stated that "we are having a fantastic growth right now with Wegovy".
"This has really become a severe credibility issue," said Barclays analyst Emily Field. "They don't view the issues that they have as severely as the market does, and that's creating a big problem."
Barclays downgraded the stock to "equal-weight" from "overweight".
Novo on Tuesday said it was intensifying its efforts to regain patients taking compounded versions, and had stepped up dialogue with the U.S. FDA to limit unlawful compounding.
JPMorgan kept its "overweight" recommendation on the stock but cut its target price to 500 crowns from 650 crowns.
Its analysts said in a research note that they expect the company to return to growth in U.S. scripts in the near term, but "would not be surprised to see investors remaining cautious pending evidence of execution against the new targets".
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