"The Weight Loss Miracle Drug" Myth Shattered, How Novo Nordisk Fell from Grace?

A year ago, Novo Nordisk was at its peak.

Its "weight loss miracle drugs" Wegovy and Ozempic ignited the global market, and "GLP-1" once became a buzzword in the pharmaceutical and capital markets. The company's market value soared, making it the largest listed company in Europe, hailed as "the Apple of Europe."

But a year later, the plot took a sharp turn.

On July 29, Novo Nordisk issued a severe profit warning, expecting both revenue and profit to decline in 2025. The stock price plummeted by 24%, and the market value evaporated by over €60 billion, with the CEO announcing a change.

How did the once-miraculous drug creator end up in this situation?

1. From "King of the Windfall" to "Stock Price Halved"

Novo Nordisk's profit warning did not come as a surprise, but it was heavy enough.

According to Goldman Sachs' interpretation, the company lowered its full-year sales growth expectation for 2025 from 13%-21% to 8%-14%, and the operating profit expectation from 16%-24% to 10%-16%, while also facing adverse currency effects (sales -4%, profit -7%).

This means that the market needs to adjust Novo Nordisk's 2025 sales and profit downwards by about 7%-10%.

However, the market's reaction was far more intense than the financial data; Novo Nordisk's stock price fell by as much as 24% on that day. More importantly, investors no longer viewed it as the undisputed leader in GLP-1 weight loss drugs. Over the past year, Novo Nordisk's stock price has cumulatively plummeted by over 58%.

The evaporation of market value is not just about future profits but also confidence.

The Biggest Competitor Eli Lilly Quietly Surpasses

The core of the profit downgrade is not the overall market weakness but rather that Novo Nordisk's proud "weight loss miracle drug" has lost its dominance.

Once, Novo Nordisk was a pioneer in the weight loss drug sector.

Ozempic was approved for diabetes treatment in 2017, and Wegovy was approved for obesity treatment in 2021. In marketing, the company rode on Elon Musk's "endorsement" and rapidly expanded production capacity in the supply chain, once dominating the market share against all competitors.

However, in the past year, the situation has reversed, with intensified competition in the U.S. market, slow progress in health insurance, and an increasing substitution rate of compounded GLP-1s, all compressing the growth space for branded drugs.

Meanwhile, Eli Lilly has caught up:

• According to IQVIA data, Eli Lilly's Mounjaro has surpassed Ozempic in U.S. prescriptions;

• Zepbound has also quickly overtaken Wegovy;

• Doctors generally report that Eli Lilly's products have better weight loss effects and fewer side effects.

In the rapidly changing innovative drug market, if the first-mover advantage cannot be maintained, it will quickly turn into "paying the price for being first."

Three Strategic Misjudgments Have Caused Novo Nordisk to Lose the Initiative

Novo Nordisk's business execution "has not met expectations," and the following issues are continuously dragging down the company's performance: 1) Capacity Forecasting Errors

Novo Nordisk initially based its capacity planning on the market response to the old drug Saxenda, significantly underestimating the demand for Wegovy and Ozempic, leading to multiple supply shortages. Once doctors and patients "turn to Eli Lilly," it is difficult to return.

Eli Lilly also faced supply tightness but recovered faster, quickly regaining market share.

2) Slower Commercialization Pace than Competitors

Eli Lilly launched its direct sales platform LillyDirect as early as the beginning of 2024 to capture cash-paying users; Novo Nordisk did not launch NovoCare until March of that year.

In addition, Novo Nordisk is accustomed to a physician-led academic promotion approach, which appears conservative and lagging in the more "consumerized" obesity market.

Barclays analysts bluntly stated: "Novo Nordisk relies too much on the efficacy of the drug itself and lacks strong promotional means."

3) Multi-line Expansion Weakens Core Resource Allocation

Novo Nordisk is trying to expand insurance coverage in the U.S. while simultaneously advancing new drug launches in multiple countries. In contrast, Eli Lilly is more focused—concentrating resources to capture the largest piece of the U.S. market.

Goldman Sachs believes that Novo Nordisk's commercial penetration in the U.S. market is "slow," and new user acquisition has not met expectations.

New Drugs Underperforming, Oral Medications Failing to Create New Momentum

Novo Nordisk pins its future hopes on the new generation injectable drug CagriSema. The company originally expected it to achieve a 25% average weight loss rate, but trial data shows only 23%.

Goldman Sachs pointed out that the market reacted "disappointedly" to this result and believes the company was overly confident in its target setting and failed to adequately highlight risks. Although CagriSema still has potential, the unmet expectations have significantly impacted investor confidence.

Meanwhile, Eli Lilly is advancing its oral GLP-1 drug Orforglipron, which is expected to be launched as early as 2026. If its side effects are manageable, it could pose a serious challenge to injectable drugs in terms of convenience.

New CEO Takes Office, How to "Turn the Big Ship"?

While issuing a profit warning, Novo Nordisk announced that Mike Doustdar, head of international business, will take over as CEO, with the appointment effective August 7.

Goldman Sachs believes his three main priority tasks after taking office are as follows:

1. Repair the U.S. Market Fundamentals: Especially accelerate the resolution of the compound drug impact issue;

2. Improve Channel Coverage Efficiency: Promote insurance negotiations and optimize out-of-pocket platform strategies;

3. Accelerate Pipeline Advancement and M&A Layout: After CagriSema, the next generation of weight loss drugs remains unclear.

Doustdar responded:

"I don't like the current stock price—whether as an employee, CEO, or shareholder. But what determines a company's fate is never the setbacks themselves, but how we respond."

Novo Nordisk Faces a "Repricing" Moment

Novo Nordisk has not lost the entire game. It remains one of the most brand-influential companies in the global GLP-1 market, with competitive manufacturing capabilities, R&D pipelines, and global channels Goldman Sachs maintains a "Buy" rating on Novo Nordisk, believing that its long-term innovation and asset quality in the fields of obesity and diabetes remain outstanding. The firm has set a 12-month target price of 745 Danish kroner for the company, indicating a 65% upside potential from the current stock price.

However, when the "weight loss miracle drug" shifts from a medical topic to a consumer trend, the rules have changed. This is not only a contest of efficacy but also a competition of speed, user experience, and business strategy; the identity of the leader comes not only from innovation but also from a precise grasp of market rhythm.

Goldman Sachs states it very directly: This is the moment when Novo Nordisk's market is being "re-priced."