A weaker outlook for Novo Nordisk – a buying opportunity or not?
Last week the Danish pharmaceutical giant Novo Nordisk slashed their full-year sales guidance, resulting in a steep drop in the share price. In one day, the stock ended down more than 23% on the Copenhagen stock exchange. This happened primarily due to weakening sales of their GLP-1 drugs Ozempic and Wegovy. The company now expects a full-year sales growth of between 8% and 14% which is a significant drop from the previous range of 13% to 21%.
The drugs Wegovy and Ozempic have been absolute blockbusters for the Danish company, turning it into the most valuable company in Europe before competitors marketing their own versions of the drug significantly impacted sales. Fierce competition from cheaper copies in the US especially affected the sales. The stock is down over 63% over the last year from the highest noted price of above 900 DKK, to a current price of slightly above 300 DKK. Looking back slightly further the Danish giant was trading at above 1000 DKK per share.
Last week President Donald J. Trump sent letters to the leading pharmaceutical manufacturers outlining the steps they must take to bring down the prices of prescription drugs in the United States. Novo Nordisk was one of the 17 recipients. The letters informed the manufacturers that if they “don’t step up”, the federal government “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices”. The trade deal announced on the 27th of July 2025 places a 15% tariff on most imported goods from the EU, including pharmaceuticals. While this is well below the 200% tariffs Trump had threatened earlier, it will still have an impact on the prices.
In May it was announced that the sitting CEO Lars Fruergaard Jørgensen will resign on the 7th of August 2025. Maziar Mike Doustdar, who is currently responsible for the company’s international operations, will take over as the new CEO on the same date. Challenges in the market, a dropping share price and the wish of the Novo Nordisk foundation has been presented as reasoning behind the change in executive management.
Is this an opportunity for long-term investors to get in at a cheaper price? The stock is currently trading at one of the lowest price-to-earnings ratios in nearly 30 years and lowest in at least five years, but the company has significant challenges to overcome to change its trajectory. The increased competition they are experiencing in the United States along with orders from President Trump to cut prices does not indicate the brightest future, especially considering that the United States is their largest market.
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