Novo Nordisk Shares Plummet Amid Revised Forecasts and U.S. Competition

Novo Nordisk’s stock dropped over 20% on Tuesday, erasing more than €60 billion from its market value, after the company issued significantly lower sales and profit forecasts for the year. The Danish pharmaceutical giant, best known for its weight-loss and diabetes drugs Ozempic and Wegovy, cited growing competition in the U.S. as a key factor.

The company now anticipates full-year sales growth of 8–14%, a sharp downgrade from its previous projection of 13–21%. Profit growth expectations were also reduced, from a prior range of 16–24% down to 10–16%.

By early afternoon in European trading, Novo’s shares had declined roughly 21%, a dramatic fall that coincided with the announcement of a new CEO.

Novo Nordisk attributed the revised guidance largely to pressure from both rival Eli Lilly and the continued prevalence of “compounded” — or copycat — versions of its drugs in the U.S. market. These unofficial versions gained traction during past shortages of Wegovy and Ozempic and have proven difficult to eliminate, even after the U.S. Food and Drug Administration withdrew emergency permissions for their production.

“For Wegovy in the U.S., the updated outlook is due to continued use of compounded alternatives, slower market expansion than expected, and intensified competition,” the company stated.

The outlook was further dampened by weaker projections for Ozempic in the U.S. diabetes market and for Wegovy in selected international markets.

Despite the challenges, Novo reported that sales for the first half of the year rose 18% (excluding currency impacts), with operating profit up 29%.

In a leadership change, Novo announced that Maziar Mike Doustdar, currently the Executive Vice President of International Operations, will become CEO next week, succeeding Lars Fruergaard Jørgensen. Jørgensen is stepping down following a period during which Novo’s stock lost over half its value within a year.

Doustdar, an Austrian-Iranian national, will be the first non-Dane to lead the company. His appointment is seen as a strategic move to strengthen Novo’s commercial position in the critical U.S. market, where analysts say it lags behind Eli Lilly in marketing prowess. Doustdar has spent his career at Novo and currently oversees all markets outside the U.S.

Novo has also taken legal action to curb the ongoing distribution of compounded versions of its weight-loss drugs. “Unsafe and unlawful mass compounding remains widespread,” the company said, adding that it is actively pursuing litigation to “protect patients” from unauthorized alternatives.

Last month, Novo ended its partnership with U.S. telehealth firm Hims & Hers, accusing it of promoting copycat versions of Wegovy. The telehealth company pushed back, claiming Novo was attempting to stifle competition with “anti-competitive demands.”

The post Novo Nordisk Shares Plummet Amid Revised Forecasts and U.S. Competition appeared first on European Business & Finance Magazine.