London – Novo Nordisk, the maker of the blockbuster weight‑loss medication Wegovy, will face intense investor scrutiny on Monday as CEO Mike Doustdar is asked to detail how the company intends to sustain growth beyond its flagship product.
Investor concerns over competition and patent cliffs
Since launching Wegovy in 2021, Novo Nordisk rode a wave of demand that helped it become Europe’s most valuable listed firm in 2023, with a market capitalisation exceeding $600 billion. However, the company’s share price has fallen more than 70 % from its peak, while rival Eli Lilly’s stock has surged.
Lilly’s competing obesity treatment Zepbound is projected to outpace Wegovy this year by over $7 billion, according to LSEG data. In addition, the active ingredient semaglutide – used in both Wegovy and the diabetes drug Ozempic – faces patent expiries in the early 2030s, raising further concerns about long‑term revenue streams.
Calls for a “third leg” of growth
Markus Manns, a portfolio manager at Union Investment, which holds shares in both Novo and Lilly, said the company needs to work harder on building a “third leg” because “in diabetes and obesity, they won’t find enough growth opportunities.” He suggested Novo diversify into therapeutic areas such as cardiovascular or rare diseases.
Doustdar, appointed just over a year ago, has already taken steps to tighten costs, discontinue lagging clinical programmes, and pursue targeted acquisitions and partnerships to bolster a thinning late‑stage pipeline.
Recent setbacks and market pressure
Earlier this year, Novo halted trials of its experimental heart drug ziltivekimab, a setback that compounded worries about long‑term sales growth. Sydbank analyst Soren Lontoft Hansen warned that convincing the market of Novo’s strength will be “a very tough task” given Lilly’s competition, price pressure, and the upcoming semaglutide patent expiry.
In February, Novo’s shares tumbled after a trial setback for its next‑generation obesity drug CagriSema, which the company had hoped would succeed Wegovy and keep pace with Lilly in the $100 billion‑plus weight‑loss market projected for the early 2030s.
Financial targets and strategic options
In August, Novo raised its sales and operating‑profit growth targets to a range of zero to minus 6 % at constant exchange rates versus 2025, up from a prior outlook of minus 4 % to minus 12 %.
Investors are now urging Novo to set concrete medium‑term financial targets, pointing to rivals such as AstraZeneca, which forecasts $80 billion in annual group revenue by 2030.
Analysts expect the company to signal a greater appetite for bolt‑on acquisitions or licensing deals, noting that internal research and development alone may not bridge the looming revenue gap.
Potential focus on early‑pipeline candidates
Morningstar analyst Karen Andersen recommended that Novo concentrate on the promising early‑pipeline candidate zenagamtide rather than continue heavy investment in CagriSema. Manns echoed this view, stating, “They absolutely need to acquire something – I don’t think they have enough power to do this all by their own. I’m not a big fan of tripling down in obesity … they should buy something in other diseases.”
While Novo declined to comment on the specific strategic directions investors are seeking, the upcoming investor meeting will be a key moment for the company to outline how it plans to diversify its portfolio and sustain growth amid intensifying competition and upcoming patent expiries.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
