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Novo Nordisk, creator of the blockbuster weight-loss drug Wegovy, is losing something else: market share.
Novo’s stock plunged over 21% today after the Danish pharma giant slashed its full year guidance: It now projects full-year sales growth between 8% and 14%, a steep drop from its prior estimate of 16% to 24%. The company also lowered its operating profit growth forecast to between 10% and 16%, below the previous target of 16% to 24%.
Novo blamed weaker sales in the US for its two main GLP-1 medications, Ozempic and Wegovy.
The company also named a new CEO today, Maziar Mike Doustdar. Former CEO Lars Fruergaard Jørgensen was removed in May after the company missed sales expectations for Q1. Clearly investors aren’t in love with the new pick, perhaps because Doustdar has been at Novo since 1992 and they want some fresh blood. .
Zoom out: Two years ago, surging sales of Wegovy and Ozempic ballooned Novo’s market cap to surpass the entire GDP of Denmark and made it the most valuable company in Europe. But in the past year, shares have plummeted as it’s lost ground to an American rival.
Novo vs. Eli Lilly
Novo Nordisk’s most formidable competition is Indianapolis-based Eli Lilly, which developed its own GLP-1 shots, Mounjaro and Zepbound, in 2022 and 2023, respectively. And despite being behind early, prescriptions for Lilly’s Zepbound in the US are now outpacing those for Novo’s Wegovy.
Among Novo’s biggest fumbles is underestimating sky-high demand for Wegovy when the drug first hit the market four years ago, according to the WSJ. Because Novo didn’t have the manufacturing capacity to make enough of it, the FDA added Wegovy to its official shortage list, which allowed telehealth pharmacies such as Hims & Hers to start producing cheaper knockoff versions of the drug, adding more competition that Novo blamed today for its lowered forecast.
Looking ahead…Novo’s new CEO will need to turn things around quickly, because Lilly’s playing offense. It’s seen early clinical-trial success for a new weight-loss pill, which could bring in consumers who are wary of the shot.—LB