Novo Nordisk (CPH: NOVO-B): It’s not all smooth sailing for the US$180bn company behind obesity drug Ozempic

Not many 100-year old healthcare stocks see a sudden 30% jump in sales in one year and become the largest capitalised company on their entire continent but Novo Nordisk (CPH: NOVO-B) is one such stock that did just that.

Its a Danish drug maker that is behind weight loss drugs Ozempic and Wegovy. For much of its history, it had a focus on treating diabetes and still produces half the world’s insulin. But obesity is a much bigger market – over 40% of adults in the USA, and now it is targeting this market.

There is an enormous opportunity ahead of the company, yet there are also a lot of risks that need to be overcome. So, while this could be one of the biggest global winners this decade, and perhaps the first ever US$1tn health company, it is no guarantee that it will happen.

But…look at its share price, and its been all downhill in 18 months. We first published this article in March 2024 when the company had nearly peaked. We update it now to see why the company fell and what the future holds.

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History of Novo Nordisk

Novo Nordisk’s history is intertwined with that of insulin. August Krogh, a Danish physiologist married to a doctor living with diabetes, secured the rights to produce the drug in Denmark in 1922 and founded the company a year later, then Nordisk Insulinlaboratorium.

It was only another two years later (in 1925) that rival Novo Terpeutisk Laboratorium was founded by a chemist that had been fired from Nordisk and was consequently disgruntled. The companies competed for 6 decades before merging in 1989 and becoming the world’s largest producer of insulin. By that time, it was far easier to administer insulin, with an ‘insulin pen injection’ introduced in 1985.

At the same time, the company (and its predecessors) were working on treatments for other diseases, but none could be as prominent as insulin. Everything changed in 2017 when the FDA approved Ozempic for the treatment of Type 2 diabetes.

And good timing, because that year had been very turbulant with signs the market for insulin was under strain – the company issued three separate profit warnings in one year. The company gained nearly 500% in the first 6 years from when Ozempic was first FDA-approved. Wegovy was approved 4 years later, technically a separate drug, but it uses the same active ingredient.

Since then, Ozempic gained further approval in 2020 to reduce the risk of major cardiovascular events (i.e. heart attacks, stroke and death) in adults with type 2 diabetes and established heart disease. January 2025 saw the approval to reduce the risk of kidney disease worsening, kidney failure and cardiovascular death in adults with type 2 diabetes and chronic kidney disease.

What is Ozempic?

Ozempic is an injection that regulates blood sugar levels and weight loss is a side effect of this. Basically it helps the pancreas release insulin after meals. It tells the liver to produce less sugar, slow digestion (so you help feel full longer) and signals the brain to reduce hunger.

At first it was only diabetics who took it. But non-diabetics began embracing it as word of mouth spread about how good it was. Sure, it had no regulatory approval for non-diabetics, but just as we saw with Uber, when a business’ product or service has that compelling an impact, people will go to the point of defying the law in favour of it. And regulators can only keep flipping the bird for so long before they realise their efforts are all in vain.

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— Michael Smerconish (@smerconish) December 7, 2023

2023 was a pivotal year because the company became most valuable in Europe, having surpassed LVMH and even boosted Denmark’s GDP by 1.8% each. Ozempic took off with popularity because many celebrities claimed to use it, led by Elon Musk and Jimmy Kimmel. In the US alone, over 40 million people were prescribed it in 2023.

In 2023, company made DKK232.3bn (US$33.7bn) in sales, a figure up 31% in Danish kroner and 36% at constant exchange rates. Its profit was DKK102.6bn, up 37% in kroner and 44% at constant exchange rates. There was also the impact on other healthcare companies as investors queried whether or not reducing obesity on such a scale would reduce problems that made companies money. We’ve addressed this question elsewhere, this article is about Ozempic from Novo Nordisk’s perspective.

2024 another good year, but its been a tough 18 months

In 2024, Novo Nordisk delivered exceptional financial results. Full-year sales increased by approximately 25–26 percent at constant exchange rates, reaching roughly DKK 290 billion. This growth was overwhelmingly driven by the Diabetes and Obesity Care segment, where GLP-1 therapies continued to see explosive demand. Obesity care, led by Wegovy, grew by more than 50 percent year on year, while Ozempic and Rybelsus continued to perform strongly in type 2 diabetes.

Operating profit rose at a similar pace, reflecting Novo’s historically strong margins and pricing power. At this stage, investor sentiment remained highly positive, and the market largely viewed Novo as the dominant long-term winner in what was increasingly seen as a once-in-a-generation metabolic health market.

But its been a more difficult 18 months. In 2025, Novo Nordisk’s absolute sales continued to grow, but the pace of growth slowed meaningfully compared with the extraordinary expansion seen in 2023 and 2024. This shift marked a turning point in investor perception. Markets began to price Novo not as a company still accelerating, but as one transitioning into a more mature phase of growth.

Realities are catching up with investors

Competition was strong and this was particularly the case from Eli Lilly, which sells Mounjaro for diabetes and Zepbound for weight loss. And now there is the risk of other players entering the market, potentially with stronger drugs and/or drugs that can be administered more easily (i.e. through oral capsules rather than DIY abdominal injections).

Investors also stomached the extensive investments needed to keep up. It spent DKK129bn (US$18-19bn) in 2024 into capex and acquisitions (i.e. buying new sites, expanding existing plants and building new facilities). Within this, US$11bn was into expanding API productions including a new facility in Denmark. It has comitted US$4bn to build a new plant in North Carolina (on the outskirts of Raleigh). Other investments include in Brazil and France.

Another major consideration is cost and reimbursement. Historic list prices exceeded US$1,000 per month but this was not likely to last. In late 2025, the US government announced an initiative to reduce the cost of these drugs and a deal was struck with Novo Nordisk to reduce prices to US$349 per month with US$199 for new patients. Another potential factor is for insurers in the US to remove coverage which will require patients to cough up their own money to stay on them. The positive is that Medicare Part D plans might cover it from this year with beneficiary copay of $50/month.

There is also the risk of potential side effects that might become more prominent as tens (or even hundreds) of millions of people take it. From a patent perspective, they don’t expire until 2032 and Novo is working on new treatments, including a potential oral tablet.

What 2026 holds

As of January 5, 2026, the company was at DJJ330.25 per share, and the consensus price is DKK393.04. Full-year results have not been reported but modest growth is expected – 6% revenue growth and 2% profit growth as per 2025 consensus. For 2026, a 2% top-line retreat and 6% bottom-line retreat, although a 2027 recovery is called for with 7% top and bottom-line growth. These estimates put the company at 14.5x P/E and 1.7x PEG for 2026.

The company’s results for 2025 are expected in early February and it has been indicated that there will be specific guidance for 2026. Novo Nordisk has stated that lower GLP‑1 prices and broader coverage initiatives (including U.S. Medicare programs) will expand access but may have a modest, low‑single‑digit negative impact on global sales growth in 2026 as pricing evolves. Management and analysts expect the company to provide formal figures alongside its results.

Of course, a lot of this is predicated on factors that could change during the year including potential pricing and reimbursement policy changes as well as the approval of any competing products. Hypothetically, if a big pharmaceutical received approval for an oral formulaiton with superior efficacy, we’d imagine big intraday hit.

Two further things should be watched for in 2026. Firstly, to address slower growth rates and competitive pressures, Novo Nordisk initiated a company‑wide restructuring program in 2025 that is expected to generate annualised cost savings of around DKK 8 billion by the end of 2026 through workforce reductions and efficiency improvements. The second is launch of new products or at least the progression to a launch, including CagriSema.

Conclusion

One thing that’s certain about Novo Nordisk is that it is one to keep an eye on, even if you’re not an investor. Although the company has some issues it needs to keep an eye on, the company has seen extraordinary growth that seems set to continue for some time, off the back of a drug that appears to be effective in ways that many predecessor drugs were not, to the point where consumers are ignoring regulators and (in some instances) even their doctors to take it.

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