Latest news with #obesitydrugs
Globe and Mail
4 days ago
- Business
- Globe and Mail
Novo Nordisk Stock: Is It Still a Smart Buy?
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. An increasingly crowded field 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. Fragmentation and setbacks 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. Fighting back 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. Should you invest $1,000 in Novo Nordisk right now? Before you buy stock in Novo Nordisk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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. 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Irish Times
26-05-2025
- Business
- Irish Times
Ousted Novo Nordisk CEO pays for investors' inflated hopes
The sudden departure of Novo Nordisk chief executive Lars Fruergaard Jørgensen comes not amid scandal or strategic calamity, but a less fashionable misstep: disappointing the stock market. Once Europe's most valuable firm, Novo's shares have halved since last summer. Investor expectations, it seems, are harder to manage than blood sugar. Jørgensen was the architect of Novo's transformation from a diabetes stalwart into a world leader in obesity drugs. READ MORE Sales of Wegovy , its blockbuster weight-loss injection, soared. So did the company's valuation: by June 2024, Novo was worth over $600 billion and traded on 56 times earnings. Such altitude brings thinner air. Any stumble, and gravity does the rest. And stumble it did. Competition from Eli Lilly intensified. Cheaper, compounded versions of GLP-1 drugs proliferated in the United States. Clinical trials for Novo's next generation of treatments disappointed heady expectations. None of these are fatal, but they are enough to turn a growth fairytale into a more familiar pharmaceutical plotline: one of pricing pressures, pipeline uncertainty, and restive shareholders. Jørgensen was surprised by his ousting, as were analysts and investors. There was no hint of change during Novo's earnings call just a week earlier. Whatever his mistakes, it is hard to pin Novo's malaise solely on his leadership. When euphoria untethers a stock, a bloodletting often follows. That Jørgensen became the fall guy may say more about investor nerves than executive negligence.
Reuters
16-05-2025
- Business
- Reuters
From insulin to Ozempic, history of Novo Nordisk's CEOs
May 16 (Reuters) - Ozempic-maker Novo Nordisk ( opens new tab on Friday ousted its CEO Lars Fruergaard Jorgensen over concerns the company is losing its first-mover advantage in the competitive obesity drug market to American rival Eli Lilly (LLY.N), opens new tab. The company has had five CEOs in its more than 100 years of history. Jorgensen, who joined in 2017, has had the shortest tenure of all. Here is a timeline of the company with respect to its CEOs: - 1920s-2000 Danish couple August and Marie Krogh founded Nordsik Insulinlaboratorium in 1923 and commercialized the production of insulin. The company competed with Novo Terapeutisk Laboratorium, which was founded by brothers Harald and Thorvald Pedersen, until the two merged in 1989. Knud Hallas Molle was Novo's second CEO from 1961 to 1981. During that time, both companies pursued and developed techniques to produce pharmaceutical products using fermentation. Mads Ovlisen served as CEO of Novo and Novo Nordisk after its merger from 1981 to 2000. In 1982, Novo marketed Human Monocomponent Insulin, and in 1987, the first human insulin products were made using genetically engineered yeast cells. Novo launched the NovoPen - the first insulin pen device in 1985. Lars Rebien Sorensen becomes CEO after serving as the head of Novo's healthcare business. The company's enzymes business was spun off as a separate company, Novozymes A/S in 2000. In 2004, Levemir – a long-acting modern insulin – was launched. Under Sorensen, the company develops its first GLP-1 drug, a precursor to Ozempic and Wegovy. Liraglutide, a GLP-1 product for treatment of type 2 diabetes, enters phase 3 trials. Novo Nordisk launches its first GLP-1 product, liraglutide, branded as Victoza in 2009 in Europe and in 2010 in the U.S. In 2013, Novo Nordisk's semaglutide starts global phase 3 trials. In December 2016, it files semaglutide for regulatory approval in the U.S. and the EU, based on the results from the six trials. 2017-present In January 2017, Lars Fruergaard Jorgensen became CEO decades after joining the company as a graduate. In December 2017, Ozempic, also known as semaglutide, gets approved in the U.S. for diabetes, the first once-weekly GLP-1 drug. Wegovy, which uses the same active ingredient as Ozempic, gets approved in the U.S. as a treatment for obesity in June 2021. In November 2023, U.S. and UK regulators approved Eli Lilly's rival weight-loss treatment Zepbound, after the company's diabetes drug was launched in 2022. In December 2024, Novo Nordisk's next-generation obesity drug shows lower-than-expected weight loss in a late-stage study, dealing a blow to its ambitions for a successor to Wegovy that is more powerful than rival Lilly's Zepbound. On May 16, Novo Nordisk says Jorgensen will step down, citing recent market challenges and a slide in the stock since mid-2024. Jorgensen says in an interview with Danish broadcaster TV2 that he did not see the decision coming and was only informed very recently.
Zawya
16-05-2025
- Business
- Zawya
Obesity drug maker Novo Nordisk's CEO to step down amid market struggle
Novo Nordisk said on Friday its CEO Lars Fruergaard Jorgensen will step down following a plunge in the company's share price amid intensifying competition in the obesity drug market. "The changes are 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," Novo said in a statement. Under his leadership, Novo Nordisk became a first-mover in the obesity and diabetes drug market, with sky-rocketing sales of its Wegovy and Ozempic treatments. Investors have however been concerned that Novo's first-to-market obesity drug is losing its lead to Eli Lilly , whose U.S. prescriptions for its Zepbound obesity shot have surpassed Wegovy since mid-March. Novo Nordisk's share price fell 2.2% by 1116 GMT. It is down 32% year-to-date. Jorgensen, who joined Novo Nordisk in 1991 and has been CEO since 2017, will continue as CEO for a transition period and a search for his successor is ongoing, it added. (Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen, editing by Terje Solsvik)
