Novo Nordisk, the Danish pharmaceutical giant behind the popular diabetes drug Ozempic, has seen a sharp decline in sales growth for its diabetes medications. The company reported that sales of drugs like Ozempic, which mimic the GLP-1 gut hormone to regulate blood sugar levels and appetite, grew by only 8% in the first half of the year. This is a significant drop from the 21% growth seen last year.
Novo Nordisk has faced intense competition from US rival Eli Lilly’s Mounjaro, which has proven to be more effective. Cheaper generic versions have also impacted the company’s sales. US compounding pharmacies, which prepare medications from basic ingredients, have been selling copycat versions of Wegovy at much lower prices despite recent regulatory efforts to curb the practice.
Outgoing CEO Lars Fruergaard Jørgensen highlighted the significant competition from the compounded market. Finance Chief Karsten Munk Knudsen mentioned that the company is pursuing lawsuits against these pharmacies and expanding its direct-to-consumer platform, NovoCare.
Novo Nordisk battles surging competition
The possibility of “cash sales” directly to patients is also being explored. Jørgensen stated that further cost-cutting measures are underway to improve commercial execution and ensure efficiency. While layoffs are likely, the final decision will be left to Maziar Mike Doustdar, who takes over as CEO.
Novo Nordisk has adjusted its sales growth forecast for 2025 to between 8% and 14%, down from a previous estimate of 13% to 21%. The company has also scrapped several weight-loss drugs in development due to portfolio considerations. The pharmaceutical giant is facing a class action lawsuit in the US, with investors claiming they were misled by overly optimistic growth forecasts in the weight-loss market.
UBS analyst Matthew Weston commented, “We expect GLP-1 compounders to remain in the US, limiting cash-pay uptake and leaving an uncertain outlook for US Wegovy.”
Derren Nathan, head of equity research at Hargreaves Lansdown, said, “Tariffs and drug pricing policies are another threat Mike Doustdar will need to tackle if Novo Nordisk is to regain its position as Europe’s most valuable company. The 15% blanket rate on EU imports could lead to further levies of up to 250% on pharmaceutical imports under another investigation.”
The pharmaceutical industry will be closely watching how Novo Nordisk navigates these challenges in the coming months as it seeks to regain its footing in the highly competitive diabetes and obesity treatment market.