Novo Nordisk Faces a Harder Sell as Forecasts, Trials and Rivalry All Tighten

Novo Nordisk may have delivered a quarter that looked respectable on paper, but the market’s verdict was harsher. In a week that combined better-than-expected sales, a higher outlook, fresh legal breathing room and another clinical disappointment, the dánish drugmaker found itself under pressure from several directions at once.

The second-quarter numbers were not the problem. Revenue rose to 78.49 billion kroner, up 3 percent at constant exchange rates and 7 percent on an adjusted basis. CEO Mike Doustdar also pointed to a milestone for the company’s oral Wegovy pill, which has already surpassed 5 million prescriptions since its January launch. Even so, the stock came under selling pressure in the US after Novo said it expects sales of GLP-1 injections in the US to decline, hit by tougher competition and lower Medicaid reimbursement for obesity drugs.

That concern was only amplified by the company’s latest pipeline setback. In late July, Ziltivekimab failed to reduce cardiovascular events in the phase-3 ZEUS trial, which enrolled more than 6,300 participants. The hazard ratio of 0.99 indicated virtually no benefit versus placebo. Novo had already lifted its full-year guidance to adjusted revenue growth of between minus 6 percent and flat at constant exchange rates, but that was not enough to calm nerves.

At the same time, the company is fighting a much bigger battle against Eli Lilly. Novo’s once-comfortable lead in the obesity market looks less assured after CagriSema failed to beat tirzepatide in the REDEFINE-4 study. The candidate did not achieve non-inferiority, neither under ideal conditions with perfect adherence nor in a more real-world setting. That has stripped away the assumption that Novo’s next-generation therapy would automatically outrun Lilly’s franchise.

Should investors sell immediately? Or is it worth buying Novo Nordisk?

The legal picture, by contrast, improved. A US federal judge dismissed a cartel lawsuit brought by Strive Specialties, which had accused Novo Nordisk and Eli Lilly of using exclusive telehealth partnerships to block access to compounded versions of their medicines. The court ruled that compounded products and branded drugs do not belong to the same market. Novo also took aim at Lilly in a separate advertising dispute, filing suit over allegedly misleading marketing.

The stock, however, has not rewarded the mixed bag of developments. Novo shares closed Friday at 40.99 euro, up 2.69 percent on the day, but still down 6.88 percent since the start of the year. They are also 25.27 percent below the 52-week high of 54.86 euro. The shares ended exactly at their 50-day average, a sign of indecision rather than momentum.

Novo Nordisk’s market value now stands at around 182 billion euro, and that scale is no longer enough to guarantee easy gains. The company is being judged study by study, quarter by quarter, and courtroom by courtroom. With CagriSema data still to come and the fight with Lilly far from settled, investors are waiting for evidence that the company can defend its position in the obesity-drug market rather than simply assume it.