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Yahoo
3 days ago
- Business
- Yahoo
Novo Nordisk's 52% Plunge: Is the Company Fumbling Its Leadership in the $150 Billion Weight Loss Market?
Novo Nordisk's upcoming weight loss drugs could struggle to stand out among an increasingly competitive field. Investors should be careful not to assume anything. The pharmaceutical industry is unpredictable. Novo Nordisk is still the industry leader, and its lower share price offsets a lot of the risks investors see today. 10 stocks we like better than Novo Nordisk › Nothing attracts competition like the opportunity for profits, and the weight loss drug market has become arguably the healthcare industry's hottest opportunity in recent memory. Novo Nordisk (NYSE: NVO) has enjoyed tremendous success with semaglutide, the proprietary drug in Ozempic and Wegovy. However, competition is picking up with multiple next-generation drugs working through clinical testing. The market is worried about Novo Nordisk's grip on the weight loss market, evidenced by the stock plummeting over 52% from its mid-2024 high. Does Wall Street have it wrong, or is Novo Nordisk fumbling a generational growth opportunity? Here is what you need to know. Research by Morgan Stanley estimates the weight loss market could grow from roughly $15 billion last year to approximately $150 billion by 2035. GLP-1 agonists are currently the drug of choice, which slow digestion and suppress the patient's appetite. Novo Nordisk has an estimated 62% market share of the GLP-1 agonist market, with archrival Eli Lilly accounting for another 35%. Investors are looking ahead to next-generation drugs that could deliver better results with fewer side effects. That includes next-generation injectable treatments and pill-form drugs, which most patients probably prefer to a needle. Novo Nordisk hopes to receive regulatory approval to market and sell its semaglutide weight loss drug Wegovy in pill form by year-end. Meanwhile, CagriSema, currently in phase 3 clinical trials, is the company's next-generation injectable drug. However, it has struggled to stand out from existing treatments in late-stage clinical tests. Will these products maintain Novo Nordisk's weight loss leadership? It's hard to tell. Eli Lilly's orforglipron has performed well in its initial phase 3 clinical testing. It's an oral pill and the first small-molecule GLP-1 agonist to pass a phase 3 study, which is potentially significant because small-molecule drugs are generally easier and cheaper to manufacture. There are dozens of weight loss drugs in various development stages across the industry, so competition is coming. Novo Nordisk's competitors were never going to stand and watch it dominate a $150 billion opportunity, but that doesn't necessarily mean Novo Nordisk will lose its crown. Investors have grown afraid of competition, but the drug development process is extremely daunting. Far more drugs fail the regulatory process than reach the market. Pfizer, a fellow pharmaceutical heavyweight, had hopes to crack the weight loss market with its oral GLP-1 agonist danuglipron, but it abandoned development in April after it potentially caused a liver injury in a patient during clinical tests. Several factors ultimately decide which treatments patients choose, including efficacy, price, and side effects. In other words, it's probably unfair to conclude what will happen until these new and upcoming drugs have been on the market for a while. Novo Nordisk and Eli Lilly may continue to dominate market share, though they could trade blows, and the balance between them could shift. Still, investors and the market have assumed that Novo Nordisk will ultimately cede market share. Analysts have dramatically lowered their long-term earnings growth estimates for Novo Nordisk. But here is the good news -- the stock already reflects these lower expectations. Novo Nordisk trades at a price-to-earnings (P/E) ratio of 20 today, down from roughly 50 over the summer. Even if the market is correct and Novo Nordisk grows by an average of 14% annually, today's valuation is still attractive for that growth. That wouldn't be the case at 50 times earnings, but its current PEG ratio of 1.4 is an attractive price tag for an industry leader in a high-growth industry like this. There are always risks in the pharmaceutical business. Novo Nordisk could suffer an unexpected setback or drug failure, or a competitive drug could be so good that it tilts the balance of the weight loss market away from Novo Nordisk. Still, Novo Nordisk is a proven industry leader and probably deserves some more faith until proven otherwise. Barring a worst-case scenario, the stock has a good shot to work out well for long-term investors from these discounted prices. 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 $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% 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 May 19, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Novo Nordisk's 52% Plunge: Is the Company Fumbling Its Leadership in the $150 Billion Weight Loss Market? was originally published by The Motley Fool Effettua l'accesso per consultare il tuo portafoglio
Yahoo
20-05-2025
- Business
- Yahoo
Novo Nordisk Places Bet on CEO Shake-Up to Reclaim Edge in Weight Loss Drug Race
As its obesity medication Wegovy loses a sizable portion of the market to Eli Lilly and Company (NYSE:LLY)'s competing medicine, Zepbound, the Danish pharmaceutical behemoth Novo Nordisk A/S (NYSE:NVO) abruptly announced the resignation of veteran CEO Lars Fruergaard Jørgensenm last week. The stock has dropped by over 49% in the past year, wiping out over $300 billion, whereas Eli Lilly's stock has shot up by around 800% since Dave Ricks, the company's current CEO, took over in January 2017. An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products. After Wegovy's debut, Eli Lilly and Company (NYSE:LLY)'s Zepbound quickly gained popularity, topping Wegovy prescriptions in the United States by March 2024 and gaining an estimated 40% of the market for weight reduction medications by August. According to Bernstein analyst Courtney Breen, Zepbound is preferred by physicians as well as patients since it has been shown in clinical trials to provide higher weight loss than Wegovy. Investors were disappointed when Novo Nordisk A/S (NYSE:NVO)'s next-generation obesity medication, CagriSema, which was supposed to emerge in 2026, failed to achieve the weight loss goals they had hoped for. The firm also has to deal with the Trump administration's proposed tariffs on imported drugs, Medicare drug price debates, growing generic competition, and the upcoming patent expirations for Wegovy. The latest licensing agreements for early-stage candidates like Amycretin and others bought from Septerna and United Laboratories International show the company's transition away from peptide-based medications and toward oral small-molecule obesity therapies. Analysts continue to exercise caution regardless of these attempts. According to Evan Seigerman of BMO Capital Markets, Novo Nordisk A/S (NYSE:NVO)'s future is uncertain in the absence of a significant strategic shift. To regain its leadership in the obesity treatment market, the business's unannounced new CEO will need to speed drug introductions, bridge the gap with Eli Lilly, and negotiate changing regulatory and competitive landscapes. While we acknowledge the potential of NVO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVO and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Mayor
17-05-2025
- Business
- Business Mayor
Novo Nordisk ousts CEO as Wegovy maker faces growing competition
Global Economy May 16, 2025 Novo Nordisk CEO Lars Jorgensen testifies before a Senate Health, Education, Labor, and Pensions Committee hearing on U.S. prices for the weight loss drugs Ozempic and Wegovy, on Capitol Hill in Washington, U.S., September 24, 2024. Piroschka Van De Wouw | Reuters Novo Nordisk said Friday that CEO Lars Fruergaard Jørgensen is stepping down as the Wegovy maker seeks to revive its ailing fortunes amid increasing competition. The Danish pharmaceutical giant said Jørgensen, who was at the helm for eight years, would remain in his post 'for a period to support a smooth transition to new leadership.' It added that the search for a successor was ongoing and an announcement would be made in due course. Novo Nordisk shares closed 1.8% lower Friday. Meanwhile, shares of rival obesity drug maker Eli Lilly were 1.7% higher following the announcement. The decision comes as Novo Nordisk's stock price has taken a battering over the past year amid increased competition in the ballooning obesity drug market and disappointing trial results for its next-generation treatments. The company's share price is currently down by more than 50% since the middle of 2024. Board Chairman Helge Lund said discussions to replace Jørgensen had been ongoing for the past several weeks between Novo Nordisk and the Novo Nordisk Foundation, which controls the firm, according to Reuters. Reuters separately reported Jørgensen as telling Danish broadcaster TV2 that he was only informed very recently and that he did not see the decision coming. 'Novo Nordisk's strategy remains unchanged, and the Board is confident in the company's current business plans and its ability to execute on the plans,' Lund said in a statement announcing the decision. 'The changes are, however, made in light of the recent market challenges Novo Nordisk has been facing, and the development of the company's share price since mid-2024,' the company said in a statement. In connection with the change, the company said that Lars Rebien Sørensen, former Novo CEO and current chair of the Novo Nordisk Foundation, will join Novo Nordisk's board, initially as an observer. Novo last week reported lower-than-expected first-quarter sales of its flagship Wegovy obesity drug and trimmed its full-year sales growth forecast amid increased competition from compounded drug markets in the U.S. 'Compounders took a part of our business away,' Jørgensen told CNBC's Charlotte Reed. The company nevertheless said that it expected sales to improve in the second half of the year as the availability of copycat compounded drugs is phased out after the Food and Drug Administration ended its drug shortage ruling. Novo has meanwhile struggled to shake negative sentiment following a series of disappointing trial results for its next-generation obesity drug candidate CagriSema. Jørgensen previously said he was 'very optimistic' about the prospects for the treatment. 'From the data we have, CagriSema is the best product that has been tested out or is on the market, and we believe we can get those data even better.' READ SOURCE
Express Tribune
17-05-2025
- Business
- Express Tribune
Novo Nordisk CEO steps down amid obesity drug market setbacks
[1/2]Novo Nordisk?s Chief Executive Lars Fruergaard Jorgensen talks to a journalist at the company's offices on the outskirts of Copenhagen, Denmark, March 8, 2024. PHOTO:REUTER Listen to article Novo Nordisk CEO Lars Fruergaard Jørgensen will step down after eight years at the helm, as the Danish pharmaceutical giant battles intensifying competition in the global obesity drug market. The decision, announced Friday, follows a dramatic 50% drop in the company's share price since mid-2024. The maker of blockbuster drugs Wegovy and Ozempic cited ongoing market challenges and disappointing trial results for its next-generation treatment CagriSema as key reasons for the leadership change. The board said the move was made 'per mutual agreement' and that Jørgensen would remain temporarily to ensure a smooth transition. Novo Nordisk's chairman Helge Lund said the company's strategy remains unchanged, and it is confident in its current business plans. The search for a successor is underway. Meanwhile, former CEO and current chair of the Novo Nordisk Foundation, Lars Rebien Sørensen, will join the company's board as an observer. Shares fell 1.8% Friday following the announcement, while rival Eli Lilly gained 1.7%. Novo recently cut its full-year growth forecast after lower-than-expected Q1 sales of Wegovy, citing competition from compounded versions of obesity drugs in the US. The company expects improvement later this year as the FDA phases out compounded alternatives. Jørgensen, who has been with Novo since 1991, expressed surprise at the decision, telling Danish broadcaster TV2 he had not expected it. His departure follows that of Camilla Sylvest, the company's former head of commercial strategy, last month.
Yahoo
16-05-2025
- Business
- Yahoo
Ozempic boss sacked after falling behind in weight-loss race
The boss of the drugs giant Novo Nordisk has been sacked after falling behind in the global race to develop weight-loss medication. Lars Fruergaard Jørgensen said he was 'surprised' that the Ozempic-maker's largest shareholder, the Novo Nordisk Foundation, had decided to remove him. 'I did not see this coming,' he told told Danish broadcaster TV2. Under Mr Jørgensen's leadership, Novo Nordisk for a time became Europe's most valuable company amid sky-rocketing sales of its treatments, which include Wegovy. Its fast-paced growth also saw it give a significant boost to Denmark's gross domestic product (GDP). However, shares in the business have fallen more than 50pc over the past year, wiping around 2.2 trillion Danish krone (£244bn) off its market valuation, amid intensifying competition in the obesity drug market. Shares fell as much as 4.6pc on Friday after the announcement of Mr Jørgensen's impending departure. This embedded content is not available in your region. The company said: 'Considering the recent market challenges, the share price decline, and the wish from the Novo Nordisk Foundation, the Novo Nordisk board and Lars Fruergaard Jørgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders.' Mr Jørgensen will continue in the job to 'support a smooth transition to new leadership', with the search for a successor under way. Lukas Leu, portfolio manager at Novo shareholder Bellevue Asset Management, said the chief executive's departure was 'unexpected and not too good'. Evan Seigerman, an analyst at BMO Capital Markets, said he was 'not surprised' by the move after the decline in Novo's share prices but warned it was 'less clear on how a new CEO will be able to address these challenges'. Novo Nordisk has been rocked by a series of setbacks in recent months, including underwhelming results in a trial for its next-generation obesity drug. It emerged in December that a late-stage trial for its CagriSema drug showed lower-than-expected weight loss, dealing a blow to its attempts to release a more effective successor to its Wegovy weight-loss jab. Meanwhile, on Sunday US rival Eli Lilly revealed its drug Zepbound was superior to Wegovy across five weight-loss targets such as reducing waist circumference, following a head-to-head trial. Zepbound helped nearly 25pc more participants lose more than 15pc of their weight compared to Wegovy, Lilly said. Novo Nordisk responded by saying 'obesity is about more than just a number on a scale', adding that Wegovy is the only medicine in its class that is approved to prevent major cardiovascular events such as heart attack. The obesity drug market is estimated to reach more than $150bn (£113bn) annually by the next decade. Mr Jørgensen first joined Novo Nordisk as a graduate in 1991 before being made chief executive in January 2017. Novo Nordisk initially developed semaglutide, the active ingredient in both Ozempic and Wegovy, as a treatment for diabetes, before discovering its effectiveness as a weight-loss drug. It came as Denmark's business minister warned of the effect of Donald Trump's attempts to force down US pharmaceutical prices on drug companies. Morten Bodskov said: 'There is no doubt that what Donald Trump has said about pharmaceuticals is just another step in the wrong direction. 'It creates more uncertainty, it creates new barriers to our trade and it is in every way the wrong way to go.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
