Novo Nordisk's stock tumbles as doubts persist about Ozempic maker's strategy

By Jaimy Lee

The Danish drug company revealed its new strategy at a capital-markets day that did little to alleviate concerns about its future

Novo Nordisk CEO Mike Doustdar poses for a photo at Novo Nordisk's headquarters in Bagsvaerd, Denmark, in August. The stock tumbled on Monday after the drug company set out its 2030 ambitions.

Novo Nordisk's stock closed lower on Monday as the weight-loss-drug giant failed to reassure investors about its strategy going ahead.

At an investor event on Monday, Novo set out its 2030 ambitions, saying it plans to launch at least five multiblockbuster drugs, deliver compound annual revenue growth in line with industry peers, focus more on its oral GLP-1 drugs and serve 60 million patients globally.

It also expects that more of its business will come from drugs designed to treat obesity-adjacent disease areas affecting the liver or the heart, as well as unnamed over-the-counter products and new medicines for blood and endocrine disorders, a category in which Novo has expertise. Yet many of those assets are in Phase 1 development, meaning they are years away from potential approval and launch.

"The burden of proof remains," BMO Capital Markets analyst Evan David Seigerman told investors on Monday morning.

Its U.S.-listed stock (NVO) (DK:NOVO.B) closed 8.0% lower on Monday. Novo's stock price is not even one-third of its 2024 peak.

Don't miss: How Ozempic maker Novo Nordisk blew its lead in GLP-1 weight-loss drugs

Under CEO Mike Doustdar, Novo has undergone a wide-reaching restructuring over the last year, and analysts have been eager to understand what's next for the company.

Sales are still growing for the company's semaglutide franchise, which includes Ozempic for Type 2 diabetes and the Wegovy injection and pill for weight loss. But there is concern that sales of these therapies aren't growing as fast as they used to, and Novo is too dependent on semaglutide - even CagriSema, its next-generation weight-loss drug, which could be approved later this year, includes semaglutide.

"This is the opportunity for CEO Doustdar to take control of the narrative and tell us how he intends to right the ship," Seigerman wrote in an investor note on Thursday. "The launch of the Wegovy pill has been strong, but one asset does not a company make (at least one the size of Novo)."

The drug manufacturer made several announcements last week, saying it had dropped "Nordisk" from its name but not formally, that it has a new set of corporate principles focused on speed and competitiveness, and that it inked two small deals with biotechnology companies - both of which are developing obesity drugs - and another with Anthropic.

In a note to investors last week, Goldman Sachs analysts described the lead-up to the Novo capital-markets day as "stale at best."

Novo's restructuring

It's been a tumultuous year for Novo. At this event last year, new CEO Doustdar announced that Novo would let go of 11.5% of its workers in what would be the largest corporate layoff in Denmark's history. In the following weeks and months, former workers tagged social-media posts about their departures with #Club9000, indicating the roughly 9,000 workers laid off globally, or #Club5000, for those let go in Denmark. About 13,000 full-time workers ended up leaving the company over the last year, according to the presentation.

That wasn't all that happened. Much of Novo's board resigned last fall, and influential leaders like Lotte Bjerre Knudsen, who led development of semaglutide, have since stepped down.

Under Doustdar's attempt to right-size Novo and regain its lead in the weight-loss market from Eli Lilly (LLY), the company is now leaner and much more focused on speed as it tries to better compete against the American pharmaceutical giant and the dozens of companies developing new weight-loss therapies.

"We're trying to simplify the company," said Doustdar at Monday's event, according to an AlphaSense transcript, citing an intent to reduce committees and "do more work and do it with a sense of urgency."

Analysts and former employees have said that Novo's culture emphasized consensus rather than quick decisions, putting it at odds with Lilly, a powerhouse drug company that brought to market Prozac in the 1980s and the erectile-dysfunction pill Cialis 15 years later. In the quickly evolving market for weight-loss drugs, that has been a challenge for Novo.

"Who would have thought just a few years back that 90% of our Wegovy pill sales will go through a cash channel in U.S.?" Doustdar said. "It is very different than before."

Novo is now more aggressive than it used to be - it filed several high-profile lawsuits this year, including one that was later dropped against Hims & Hers Health (HIMS) and another over Lilly's ads. Much of the year's high points are due to the Wegovy pill, which has been a resounding success. The pill had about $839 million in sales in the first half of the year and remains the preferred option over Lilly's GLP-1 pill since Foundayo launched in April. About 7 million people have received a prescription for the Wegovy pill since its launch in January, according to Novo.

A year into Doustdar's tenure as CEO, analysts still have questions about the broader strategy for the company, which is best known for making insulin and other products for Type 2 diabetes patients. The company's U.S.-listed shares are down 34.4% over the past year.

-Jaimy Lee

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09-21-26 1623ET

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