From CNBC · Elsa Ohlen · · 2m
Novo's growth plan fails to impress investors
The Danish drugmaker's strategy to diversify beyond weight-loss drugs disappoints the market as patent expiry looms.
In brief
The Danish drugmaker's strategy to diversify beyond weight-loss drugs disappoints the market as patent expiry looms. Novo Nordisk shares fell seven point seven percent after the company unveiled a long-term growth strategy that failed to address investor concerns about losing patent protection for its blockbuster…
Novo shares plunge on strategy
Novo Nordisk shares fell seven point seven percent on Monday after the Danish drugmaker unveiled long-term growth plans that failed to ease investor concerns.
The patent cliff looming
CEO Mike Doustdar told investors the real problem is semaglutide, the active ingredient in Wegovy and Ozempic, loses patent protection in twenty thirty-two in the U.S., which accounts for over half of Novo's sales.
“The elephant in the room was that semaglutide will lose key patent exclusivity starting early next decade.”
Novo faces fierce competition
Eli Lilly has grabbed majority market share in injectable GLP-1 drugs with Mounjaro and Zepbound despite launching years after Novo. Lilly shares gained fifty-two percent over the past year while Novo fell twenty-seven percent.
Doustdar's diversification plan
Novo aims to launch more than five drugs with multi-blockbuster potential by twenty thirty and generate over twenty three billion dollars in risk-adjusted pipeline sales by twenty thirty-five.
Expanding beyond obesity
Doustdar said Novo will build out its portfolio around blood and endocrine disorders, liver disease, and cardiovascular disease while keeping obesity and diabetes as its foundation.
“We plan to come on the other side of the loss of exclusivity as a bigger company than we are today and a much more diversified version of it.”
Investors wanted more ambition
Investment strategist Jacob Pedersen said Novo's target for growth in line with industry peers suggests slower expansion than investors historically expected from the company.
“The investors, they are very particular in what they want from Novo, and this doesn't add up to it.”
A strategic reversal
Doustdar's diversification marks a shift from his strategy last year when Novo sharpened focus on obesity and diabetes. Novo also announced a rebrand from Novo Nordisk to Novo and a culture revamp to meet Lilly's competition.
What happens next
Novo will be more active in business development and expects adjusted sales and operating profit to be down six percent to flat in twenty twenty-six at constant exchange rates.
The key point
Novo Nordisk shares fell seven point seven percent after the company unveiled a long-term growth strategy that failed to address investor concerns about losing patent protection for its blockbuster obesity drug semaglutide in twenty thirty-two.
