Novo Nordisk Faces Challenges Amidst Rising Competition in Weight-Loss Drug Market
Published 29 July 2025
Highlights
- Novo Nordisk has reduced its full-year sales and profit forecasts, citing increased competition from rival weight-loss drugs.
- The company's shares dropped by over 20% following the announcement of the revised financial outlook.
- Maziar Mike Doustdar will replace Lars Fruergaard Jørgensen as CEO, effective August 7, amid strategic shifts.
- Novo Nordisk is pursuing legal actions against "unsafe and unlawful" knock-off semaglutide drugs.
- Analysts highlight the need for Novo Nordisk to better capture the self-pay obesity market to regain competitive edge.
Novo Nordisk, the Danish pharmaceutical giant known for its weight-loss drug Wegovy, has announced a downward revision of its full-year sales and profit forecasts, attributing the change to heightened competition from rival products. This announcement has led to a significant drop in the company's share price, which fell by more than 20%.
Leadership Transition Amid Strategic Shifts
The company is undergoing a leadership transition, with Maziar Mike Doustdar set to take over as CEO on August 7, following the unexpected departure of Lars Fruergaard Jørgensen in May. Doustdar, a long-time Novo Nordisk executive, is tasked with steering the company through a challenging period marked by increased competition in the obesity drug market, particularly from US rival Eli Lilly.
Financial Forecasts and Market Dynamics
Novo Nordisk has adjusted its sales growth expectations for 2025 to between 8% and 14%, down from the previous forecast of 13% to 21%. Similarly, the operating profit growth estimate has been lowered to 10%-16% from an earlier range of 16%-24%. The company attributes these changes to slower-than-expected growth for Wegovy in the US and international markets, as well as for Ozempic in the US diabetes market.
Despite these challenges, Novo Nordisk reported an 18% year-on-year increase in sales for the second quarter, with operating profits rising by 40% in the April-June period. However, the company's market value, which once peaked at €615 billion, has since halved.
Legal Actions and Market Strategy
In response to the proliferation of "unsafe and unlawful" knock-off semaglutide drugs, Novo Nordisk is pursuing legal strategies to protect its market share. The company has been criticized for being slow to capitalize on the self-pay obesity market, a segment that analysts believe is crucial for future growth.
Markus Manns, a portfolio manager at Union Investment, emphasized the need for Novo Nordisk to focus more on this important patient segment. "Novo has underestimated the self-pay market in obesity and just recently started to focus on this important patient segment," Manns stated.
What this might mean
Looking ahead, Novo Nordisk's ability to navigate the competitive landscape of the weight-loss drug market will be crucial. The appointment of Maziar Mike Doustdar as CEO signals a potential shift in strategy, with a focus on revitalizing the company's performance in the US, the largest and most profitable market for weight-loss drugs. Legal actions against knock-off drugs may also play a role in safeguarding Novo Nordisk's market position.
The broader pharmaceutical industry faces additional challenges, including potential tariffs and calls for lower US prescription prices. How Novo Nordisk adapts to these external pressures, alongside its internal strategic adjustments, will likely determine its future trajectory in the global market.
