BMO's Evan David Seigerman: Novo Nordisk CEO departure reflects disparity with Eli Lilly
Evan David Seigerman, BMO Capital Markets head of healthcare research, joins CNBC's 'Money Movers' to discuss reactions to the departure of Novo Nordisk's CEO, what is means for the company's trajectory, and more.
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Yahoo
an hour ago
- Yahoo
Novo Nordisk Stock: Is It Still a Smart Buy?
This one-time weight-loss drug leader has suffered several setbacks lately. It isn't wise to count out this veteran pharmaceutical company, however. 10 stocks we like better than Novo Nordisk › Much like the long-term users of its most popular product, Novo Nordisk's (NYSE: NVO) stock has slimmed down considerably of late. Share prices of the company, which developed and sells weight loss drug Wegovy, have fallen nearly 18% in price since the start of this year. Popularity attracts competition, and investors are growing concerned that the Danish pharmaceutical giant won't be able to compete. I've been a Novo Nordisk bull for quite some time now, and I wouldn't be as spooked by the situation. Here's why. Novo Nordisk got a two-year-plus head start in the white-hot obesity drugs market, when Wegovy became the first GLP-1 drug specifically approved by the Food and Drug Administration (FDA) for that indication in mid-2021. Novo Nordisk's Ozempic was first, but it was used off-label as a weight-loss drug, and had only initially been approved as a diabetes treatment and kidney disease treatment. It's easy to believe in a company when it's riding high and unopposed. But late in 2023, a new entrant was approved -- mighty American pharmaceutical company Eli Lilly (NYSE: LLY) with its own GLP-1 treatment, Zepbound -- giving Novo Nordisk one of the strongest competitors imaginable. Almost certainly, this won't continue to be a two-car race for long. Other companies, both large and small, in the healthcare field are pushing hard to develop their own obesity drugs, with varying degrees of success. Eli Lilly alone is an intimidating presence. A mainstay on the American pharmaceutical scene, it's grown to a massive size, to the point where it's the most valuable pharmaceutical company in the world by market cap. It can leverage its vast resources to develop and market any kind of medicine it wants, and in the obesity segment, it was already nearly there with Zepbound's FDA-approved-for-diabetes sibling drug, Mounjaro. Since then, it seems Zepbound has carved out a significant market share from Wegovy. Precise figures are hard to come by, but according to a Goldman Sachs analysis recently reported by Barron's, Novo Nordisk is clinging to a 51% share of the roughly $28 billion market. Eli Lilly holds the rest. Like other pharmaceutical industry pundits, Goldman Sachs is predicting that once other obesity drugs are developed successfully and approved, the market will fragment. That's a wholly believable prediction given the zeal and urgency behind many of those efforts. Meanwhile, Novo Nordisk has taken a series of competitive blows that reduced its lead. A shortage of semaglutide -- the main ingredient of Wegovy -- led the FDA to allow compounding pharmacies to make copies of the molecule, essentially producing new competition. Although the shortage is officially over, it showed that Novo Nordisk would be vulnerable if such a situation reoccurred. Another of the numerous fresh setbacks was a head-to-head clinical trial conducted by Eli Lilly, pitting Zepbound against Wegovy. Last December, the results of the study indicated notably more significant weight loss for participants using Wegovy. One internal development also dented investor sentiment on Novo Nordisk, and that was the company's announcement in mid-May that long-serving CEO Lars Fruergaard Jørgensen was stepping down. When enterprises are humming along pleasantly, they rarely experience a top leader's departure. Novo Nordisk isn't just absorbing hurtful blows, though; it's been busy shoring up its defenses. As 2024 came to a close, it scooped up contract drug manufacturer Catalent, bringing Wegovy production more under its direct control. That $16.5 billion deal wasn't cheap by any yardstick, but if the new asset is managed well, it should be more than worth the cost ultimately. Novo Nordisk is also keeping up the pace with its own development activities, attempting to succeed with new medications and/or other indications for Wegovy. Its next-generation obesity treatment CagriSema was essentially a flop. However, the company has already had success winning FDA approval for the versatile Wegovy to treat liver disorder metabolic dysfunction-associated steatohepatitis (MASH), and it's developing the drug for a clutch of other ailments. It also has other medications for different disorders in its pipeline. Meanwhile, a score of researchers modeling the future of the obesity market feel that sales of such drugs will blast through the roof. Projections vary, but a typical one is the latest from Morgan Stanley. In May, the veteran investment bank upped its estimate for the market's peak (predicted to occur in 2035) to $150 billion, well up from its previous assumption of $105 billion. The former number is more than 6 times the $24 billion estimated sales of 2024. The very encouraging news for Novo Nordisk bulls like myself is that even if the market gets highly fragmented with numerous competing products and loses significantly more share -- unlikely, given its first-mover prominence and the strength of the Wegovy brand name -- it'll still be a player in a huge market. Yes, competition can be tough. There are a lot of prizes in this game, and more players are entering it. But I think this original player will manage to hold on and thrive, and I continue to consider Novo Nordisk stock a buy. Before you buy stock in Novo Nordisk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Novo Nordisk wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Novo Nordisk Stock: Is It Still a Smart Buy? was originally published by The Motley Fool
Yahoo
11 hours ago
- Yahoo
The Trump-Musk feud could be one of the catalysts for a coming 10% stock correction, former JPMorgan strategist says
Marko Kolanovic predicts a stock market pullback could be in the cards. Kolanovic thinks Tesla's decline on the Trump-Musk feud could be among the catalysts that spark a decline. Other problems he sees for the market include high valuations and economic uncertainty. Former JPMorgan chief market strategist Marko Kolanovic sees a stock market pullback in the cards, and the Trump-Musk feud could be one of the triggers that sets off a decline. Speaking on CNBC on Thursday, Kolanovic predicted a coming correction of 5%-10% that could be set off by a drop in Tesla's stock price. "It's a little bit of a sideshow. It's important for certain companies, and it can spill over," Kolanovic said of the president's fallout with Musk. "Tesla is one of the biggest holdings of retail investors. There's a little ecosystem of stocks around it. I think it could be a little bit of a catalyst." In a post on X on Thursday, Kolanovic pointed to popular retail stocks such as Tesla, Palantir, and Super Micro as potential triggers of a momentum crash. Tesla stock plunged 14% on Thursday as Trump responded to Musk's criticisms of the big GOP tax and budget bill. However, Kolanovic also noted that the Trump-Musk fight would be one possible catalyst for a market pullback among many. Uncertainty in the economy and the trade war are also looming problems. "We're close to all-time highs, but we still have all the problems," Kolanovic said. "We have a trade war, we have signs of an economic slowdown." Valuations are stretched, he said, with the Nasdaq close to record highs even as rates remain elevated, and Kolanovic sees warning signs in the bond market. The risk-reward tradeoff for stocks versus bonds looks unattractive, as the 10-year Treasury yield hovers around 4.4%. That means equity investors aren't getting a great return in excess of the risk-free rate. There's also the lingering concern about Fed independence, with Trump repeatedly pressuring Powell to cut interest rates. Macro risks are mounting as well. Kolanovic pointed to the weak ADP jobs report earlier this week, which reported 37,000 new jobs compared to economists' expectations of 110,000. While the May jobs report showed higher-than-expected job growth, April and March numbers saw significant downward revisions. A correction could present a potential buying opportunity, but that's only if recession risks dissipate, Kolanovic said. Read the original article on Business Insider
CNBC
12 hours ago
- CNBC
Tesla Optimus robotics vice president Milan Kovac is leaving the company
Tesla's vice president of Optimus robotics, Milan Kovac, said on Friday that he's leaving the company. In a post on X, Kovac thanked Tesla CEO Elon Musk and reminisced about his tenure, which began in 2016. "I want to thank @elonmusk from the bottom of my heart for his trust and teachings over the decade we've worked together," Kovac wrote. "Elon, you've taught me to discern signal from noise, hardcore resilience, and many fundamental principles of engineering. I am forever grateful. Tesla will win, I guarantee you that." Tesla is developing Optimus with the aim of someday selling it as a bipedal, intelligent robot capable of everything from factory work to babysitting. In a first-quarter shareholder deck, Tesla said it was on target for "builds of Optimus on our Fremont pilot production line in 2025, with wider deployment of bots doing useful work across our factories." During Tesla's 2024 annual shareholder meeting, Musk characterized himself as "pathologically optimistic," then claimed the humanoid robots would lift the company's market cap to $25 trillion at an unspecified future date. In recent weeks, Musk told CNBC's David Faber that Tesla is now training its Optimus systems to do "primitive tasks," like picking up objects, open a door or throw a ball. Competitors in the space include Boston Dynamics, Agility Robotics, Apptronik, 1X and Figure. Kovac had previously served as the company's director of Autopilot software engineering. He rose to lead the company's Optimus unit as vice president in 2022. Musk personally thanked Kovac for his "outstanding contributions" to the business. Tesla didn't respond to a request for comment.
