Ask Onix
Novo Nordisk stock plummets after profit warning
Shares of the Danish pharmaceutical giant Novo Nordisk fell sharply Wednesday after executives predicted a steep decline in profits and sales, citing unprecedented pricing pressures in the weight-loss drug market.
Profit forecast slashed amid price cuts
The company revealed it expects profits and sales to drop by up to 13% this year, driven by aggressive price reductions and rising competition. Chief Executive Maziar Mike Doustdar described the current environment as "unprecedented" and "painful" in remarks to investors.
Novo Nordisk attributed part of the pressure to a recent agreement with the U.S. administration to lower the cost of its weight-loss medications, Wegovy and Ozempic, for American consumers. The deal, brokered under former President Donald Trump, aims to expand access but has squeezed the company's margins.
Patent expirations add to challenges
Competition is intensifying as patents for semaglutide-the active ingredient in Ozempic and Wegovy-near expiration in key markets like India and China. Novo Nordisk's Chief Financial Officer, Karsten Munk Knudsen, told the BBC that the company anticipates a 2% hit to group sales this year due to the influx of lower-cost alternatives.
Despite the downturn, Knudsen emphasized that Novo Nordisk is not engaging in a "race to the bottom" on prices but rather seeking to grow the market responsibly. Doustdar echoed this sentiment, framing the price cuts as a long-term investment to broaden access to Wegovy.
U.S. pricing deal amplifies pressure
The Trump administration's "most favoured nation" agreement with Novo Nordisk and rival Eli Lilly has further compressed prices. Under the deal, government-backed platform TrumpRx now offers Wegovy and Eli Lilly's Zepbound for as low as $250 per month, down from over $1,000 without insurance. Medicare prices for these drugs have also been capped at $245.
Novo Nordisk acknowledged in its earnings report that the agreement, combined with patent expirations and heightened competition, had led to its revised profit guidance. The company stated that "lower realized prices linked to investments in market access" were a key factor in the downgrade.
Rival Eli Lilly outperforms amid Novo Nordisk struggles
While Novo Nordisk's shares tumbled, Eli Lilly's stock rose Wednesday after the U.S. firm reported stronger-than-expected sales and profits. Analysts attributed Lilly's resilience to its success in mitigating side effects associated with weight-loss drugs, a challenge that has weighed on Novo Nordisk.
"There is a lot of work, and it's a very slow process, but [Eli Lilly] just seems to be coming out of it very well,"
Dan Coatsworth, Analyst at AJ Bell
Coatsworth noted that investors have shown greater confidence in Eli Lilly, which has avoided the succession of negative headlines that have dogged Novo Nordisk since its leadership transition last summer and subsequent job cuts announced in September.
CEO urges patience amid market turbulence
Doustdar, who took the helm in mid-2025, urged investors to brace for further volatility. Speaking to CNBC's Early Edition Europe, he warned that the company's share price would likely "go down before it comes back up."
The weight-loss drug market has exploded in recent years, with Novo Nordisk's Ozempic and Wegovy and Eli Lilly's Zepbound and Mounjaro dominating sales. However, the rapid growth has attracted copycat drugs, some of which have raised safety concerns, adding another layer of complexity to the competitive landscape.
