Novo Nordisk Shares Fall Amid Concerns Over Pricing, Patent Expiry & M&A
Novo Nordisk Faces Market Challenges and Strategic Questions
By Patrick Wingrove
LONDON, Sept 21 (Reuters) - Novo Nordisk shares slid as much as 9% on Monday as executives faced tough questions from analysts over the drugmaker's pricing power and dealmaking strategy ahead of looming patent expiries.
Novo aims to launch more than five blockbuster drugs by 2030 and deliver more than 150 billion Danish crowns ($23 billion) in pipeline sales in 2035, CEO Mike Doustdar said at the drugmaker's capital markets day in London.
The company is racing to reassure markets that it can navigate patent expirations for semaglutide — the active ingredient in its blockbuster anti-obesity drug Wegovy and diabetes medicine Ozempic — in the early 2030s.
The Danish drugmaker's fortunes have reversed sharply since the 2021 arrival of Wegovy propelled its valuation above $600 billion. Novo shares have tumbled more than 70% from their record highs in the face of stiff competition from US rival Eli Lilly.
Competitive Pressures and Patent Expiry
Novo Faces Pressure from Generics and New Rivals
Lilly’s competing injection, Zepbound, is on track to outsell Wegovy by upwards of $7 billion this year, according to LSEG data.
Seeking to soothe market jitters, Novo last year started a cost-cutting drive, disclosing on Monday that staff departures have reached 13,000 following an initial 9,000 layoffs and 4,000 subsequent exits.
Analyst and Investor Reactions
However, analysts on Monday pressed management on their pricing assumptions, questioning whether next-generation drugs can sustain premium price points once semaglutide loses exclusivity.
Both investors and analysts labeled the new targets as underwhelming. Markus Manns, a portfolio manager at Union Investment, told Reuters that Novo's 2030 sales outlook and stable margins failed to impress.
BMO analyst Evan Seigerman said in a note that the guided 3.6% revenue growth was already priced in by the market, leaving the "burden of proof" on management to demonstrate execution.
"They (also) did not say much in terms of how to tackle the semaglutide patent expiration in 2032," said Manns, though he added that the company made a credible case for its next-generation obesity drugs and broad early pipeline.
Novo shares recovered some early losses and were down just under 4.4% by 1246 GMT.
Strategic Focus on M&A and Pipeline Expansion
Focus on M&A Deals to Bolster Pipeline
Novo executives said the drugmaker's balance sheet can support larger acquisitions rather than just small bolt-on deals, and clarified that its more than 150 billion crown target is based on internal, risk-adjusted assets and excludes any future M&A.
Pipeline Rollout and Product Launches
Management on Monday also detailed a multi-year rollout for the drugmaker's next-generation obesity injectables, targeting a launch of its CagriSema combination early next year, followed by standalone cagrilintide and high-dose CagriSema in 2028, before advancing zenagamtide.
Chief Scientific Officer Martin Holst Lange said Novo now plans to launch oral and injectable zenagamtide simultaneously, rather than rolling out the shot first.
Doustdar said Novo aims to reach more than 60 million patients globally by 2030 and scale up manufacturing tenfold to supply 15 million patients with oral obesity therapies by the end of the decade.
Consumer-Facing Model and Oral Portfolio Expansion
Highlighting a pivot toward a more consumer-facing model, a Novo executive said out-of-pocket, self-pay channels now account for 50% of the entire Wegovy franchise, with direct cash purchases making up 90% of demand for the Wegovy pill.
Novo is also accelerating expansion of its portfolio of pills and aims to have at least five oral assets in clinical trials before the end of this year.
Doustdar said Novo's oral Wegovy pill has achieved a record 7 million prescriptions in the US to date.
($1 = 6.5096 Danish crowns)
(Reporting by Patrick Wingrove; Writing by Louise Rasmussen; Editing by Barbara Lewis, Susan Fenton and Jan Harvey)