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Novo Nordisk Stock Rises 6% in a Week: What Should Investors Do?
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Key Takeaways
NVO stock rises amid amycretin's phase III plans and stake buildup by Parvus Asset Management.
Novo Nordisk eyes semaglutide label expansions as it ramps up next-generation obesity pipeline efforts.
Competition from Lilly, Amgen, and VKTX puts pressure on NVO's lead in the obesity drug space.
Novo Nordisk (NVO - Free Report) shares have gained 5.8% in a week. The uptrend in the stock price was driven by reports of an activist hedge fund, Parvus Asset Management, building a stake in the company, as well as a positive pipeline update from the development program of one of NVO’s next-generation obesity candidates, amycretin.
Novo Nordisk announced that it plans to advance amycretin for weight management into late-stage development. Amycretin is being developed for subcutaneous and oral administration. NVO decided to advance the candidate into phase III based on feedback received from regulatory authorities following end-of-phase II interactions for subcutaneous and oral amycretin in weight management. The phase III program on amycretin is planned to be initiated during the first quarter of 2026.
Novo Nordisk is expanding its obesity pipeline to defend its lead in the U.S. market amid rising competition from Eli Lilly’s (LLY - Free Report) Mounjaro for type II diabetes (T2D) and Zepbound for obesity.
Meanwhile, CVS Caremark, a major pharmacy benefit manager, announced that it would make Novo Nordisk’s popular weight-loss drug, Wegovy, its preferred GLP-1 therapy for weight loss, effective July 1. NVO also announced partnerships with telehealth providers Hims & Hers Health to offer Wegovy at a discounted price to cash-paying patients. These are likely to give the company a commercial advantage over Lilly in the obesity market.
However, investors are advised not to jump to conclusions regarding acquiring/retaining the stock in their portfolio without considering the full spectrum of information available on Novo Nordisk. The company has faced several pipeline setbacks in the recent past. The competition in the obesity marketplace has also heated up significantly in the past couple of years, which threatens NVO’s prowess in the market. Let’s dig deeper and understand the company’s strengths and weaknesses to better understand how to play the stock after the recent price rise.
Semaglutide - NVO’s Growth Engine
NVO’s success in the past few years is underscored by its marketed semaglutide (GLP-1 agonist) medicines.
The company has a strong presence in the Diabetes care market, with one of the broadest diabetes portfolios in the industry. Its global diabetes value market share as of March-end stands at 33.3%, fueled by Rybelsus, Ozempic and Victoza, putting up a strong performance. Novo Nordisk continues to be the global market leader in the GLP-1 segment, with around 54% value market share as of the end of the first quarter of 2025.
Wegovy is a significant contributor to Novo Nordisk's revenues. Wegovy revenues surged 83% to DKK 17.4 billion in first-quarter 2025 due to strong prescription growth, driving higher revenues and profits. Additionally, Ozempic sales are also contributing positively to overall revenues. The company has also been investing heavily to expand its manufacturing capacity as part of its strategic move to entrench its diabetes and obesity care market leadership for its GLP-1 products.
Novo Nordisk is expanding the reach of semaglutide through new indications, seeking label expansions for Wegovy in cardiovascular disease and Ozempic in T2D patients with chronic kidney disease. The FDA is reviewing NVO’s application for a 25 mg oral semaglutide for obesity, with a decision expected by year-end. Oral pills could boost adherence over injections. It has also filed to use Rybelsus for preventing cardiac events in T2D patients and is exploring semaglutide in liver disease. Beyond this, Novo is diversifying into rare diseases, with regulatory plans for Mim8 (hemophilia A) and recent EU approval of Alhemo (hemophilia A/B with inhibitors).
NVO Focuses on Next-Generation Drugs for Obesity
NVO is now developing several next-generation obesity candidates in its pipeline, especially targeting the lucrative U.S. market. The most advanced weight loss candidate in Novo Nordisk’s pipeline is CagriSema, a fixed-dose combination of a long-acting amylin analogue and Wegovy. CagriSema met the primary endpoint of statistically significant weight loss in two late-stage studies. The company is already planning its regulatory submission in 2026.
Novo Nordisk is also developing a small-molecule oral CB1 inverse agonist, monlunabant, in a mid-stage study. Recently, Novo Nordisk signed a $2.2 billion deal with Septerna for developing and commercializing oral small-molecule medicines for treating obesity, T2D and other cardiometabolic diseases.
Recent Pipeline and Regulatory Setbacks
Despite NVO’s recent stock price recovery, pipeline and regulatory setbacks have resulted in the stock crashing 26.1% in the past six months.
The company reported disappointing data from two late-stage studies for CagriSema. In these studies, CagriSema demonstrated a lower-than-expected reduction in body weight despite meeting study goals.
Earlier, Medicare announced that it will not cover costly weight-loss drugs, such as NVO’s Wegovy (semaglutide) and Lilly’s Zepbound (tirzepatide), as obesity remains unclassified as a disease. Consequently, these medications, often viewed as cosmetic, may become less accessible to patients.
Competition Heating Up in the Obesity Space
Competition in the obesity market is heating up as the obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs.
Lilly has also been taking significant strides in the development of oral therapies for obesity, like the first phase III success for its oral GLP-1 candidate, orforglipron, effectively putting pressure on Novo Nordisk.
Several other companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Amgen has begun a broad phase III program on its dual GIPR/GLP-1 receptor agonist, MariTide, across obesity, obesity-related conditions and T2D, with the first two phase III studies initiated in March. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Phase III studies with the subcutaneous formulation of VK2735 are on track to begin soon.
NVO’s Stock Price, Valuation, Estimates
Year to date, Novo Nordisk shares have lost 7.2% compared with the industry’s 2.5% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below. The stock is currently trading above its 50-day moving average, but below its 200-day moving average.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Image Source: Zacks Investment Research
Novo Nordisk is trading at a premium to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 18.99 forward earnings, which is higher than 15.64 for the industry. However, the stock is trading much below its five-year mean of 29.25.
NVO Stock Valuation
Image Source: Zacks Investment Research
Earnings estimates for 2025 have improved from $3.80 to $3.84 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have improved from $4.60 to $4.64.
NVO Estimate Movement
Image Source: Zacks Investment Research
The stock’s return on equity on a trailing 12-month basis is 80.95%, which is higher than 33.56% for the large drugmaker industry, as seen in the chart below.
NVO Return on Equity
Image Source: Zacks Investment Research
Here’s How to Play NVO Stock
Novo Nordisk, currently carrying a Zacks Rank #3 (Hold), has the potential to boost shareholders’ wealth in the future. Despite past pipeline and regulatory setbacks, we remain confident that NVO is a good stock to retain. The company operates in a lucrative market that is rapidly expanding. Its strong year-over-year revenues and profits, fueled by rising demand for Wegovy and Ozempic, suggest long-term potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company is actively working to expand the approved uses of its key semaglutide products, Wegovy, Ozempic, and Rybelsus, which could significantly increase the eligible patient pool and drive future revenues.
However, Eli Lilly remains a formidable adversary in the obesity market space, which threatens NVO’s market share.
Hence, we can conclude that the recent uptrend in the stock price can be interpreted as an improvement in conditions for Novo Nordisk, as is supported by the upward estimate movements. Investors who already own the stock should hold their position for long-term gains. Short-term investors are, however, advised to steer clear of the stock to avoid near-term volatility.
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Novo Nordisk Stock Rises 6% in a Week: What Should Investors Do?
Key Takeaways
Novo Nordisk (NVO - Free Report) shares have gained 5.8% in a week. The uptrend in the stock price was driven by reports of an activist hedge fund, Parvus Asset Management, building a stake in the company, as well as a positive pipeline update from the development program of one of NVO’s next-generation obesity candidates, amycretin.
Novo Nordisk announced that it plans to advance amycretin for weight management into late-stage development. Amycretin is being developed for subcutaneous and oral administration. NVO decided to advance the candidate into phase III based on feedback received from regulatory authorities following end-of-phase II interactions for subcutaneous and oral amycretin in weight management. The phase III program on amycretin is planned to be initiated during the first quarter of 2026.
Novo Nordisk is expanding its obesity pipeline to defend its lead in the U.S. market amid rising competition from Eli Lilly’s (LLY - Free Report) Mounjaro for type II diabetes (T2D) and Zepbound for obesity.
Meanwhile, CVS Caremark, a major pharmacy benefit manager, announced that it would make Novo Nordisk’s popular weight-loss drug, Wegovy, its preferred GLP-1 therapy for weight loss, effective July 1. NVO also announced partnerships with telehealth providers Hims & Hers Health to offer Wegovy at a discounted price to cash-paying patients. These are likely to give the company a commercial advantage over Lilly in the obesity market.
However, investors are advised not to jump to conclusions regarding acquiring/retaining the stock in their portfolio without considering the full spectrum of information available on Novo Nordisk. The company has faced several pipeline setbacks in the recent past. The competition in the obesity marketplace has also heated up significantly in the past couple of years, which threatens NVO’s prowess in the market. Let’s dig deeper and understand the company’s strengths and weaknesses to better understand how to play the stock after the recent price rise.
Semaglutide - NVO’s Growth Engine
NVO’s success in the past few years is underscored by its marketed semaglutide (GLP-1 agonist) medicines.
The company has a strong presence in the Diabetes care market, with one of the broadest diabetes portfolios in the industry. Its global diabetes value market share as of March-end stands at 33.3%, fueled by Rybelsus, Ozempic and Victoza, putting up a strong performance. Novo Nordisk continues to be the global market leader in the GLP-1 segment, with around 54% value market share as of the end of the first quarter of 2025.
Wegovy is a significant contributor to Novo Nordisk's revenues. Wegovy revenues surged 83% to DKK 17.4 billion in first-quarter 2025 due to strong prescription growth, driving higher revenues and profits. Additionally, Ozempic sales are also contributing positively to overall revenues. The company has also been investing heavily to expand its manufacturing capacity as part of its strategic move to entrench its diabetes and obesity care market leadership for its GLP-1 products.
Novo Nordisk is expanding the reach of semaglutide through new indications, seeking label expansions for Wegovy in cardiovascular disease and Ozempic in T2D patients with chronic kidney disease. The FDA is reviewing NVO’s application for a 25 mg oral semaglutide for obesity, with a decision expected by year-end. Oral pills could boost adherence over injections. It has also filed to use Rybelsus for preventing cardiac events in T2D patients and is exploring semaglutide in liver disease. Beyond this, Novo is diversifying into rare diseases, with regulatory plans for Mim8 (hemophilia A) and recent EU approval of Alhemo (hemophilia A/B with inhibitors).
NVO Focuses on Next-Generation Drugs for Obesity
NVO is now developing several next-generation obesity candidates in its pipeline, especially targeting the lucrative U.S. market. The most advanced weight loss candidate in Novo Nordisk’s pipeline is CagriSema, a fixed-dose combination of a long-acting amylin analogue and Wegovy. CagriSema met the primary endpoint of statistically significant weight loss in two late-stage studies. The company is already planning its regulatory submission in 2026.
Novo Nordisk is also developing a small-molecule oral CB1 inverse agonist, monlunabant, in a mid-stage study. Recently, Novo Nordisk signed a $2.2 billion deal with Septerna for developing and commercializing oral small-molecule medicines for treating obesity, T2D and other cardiometabolic diseases.
Recent Pipeline and Regulatory Setbacks
Despite NVO’s recent stock price recovery, pipeline and regulatory setbacks have resulted in the stock crashing 26.1% in the past six months.
The company reported disappointing data from two late-stage studies for CagriSema. In these studies, CagriSema demonstrated a lower-than-expected reduction in body weight despite meeting study goals.
Earlier, Medicare announced that it will not cover costly weight-loss drugs, such as NVO’s Wegovy (semaglutide) and Lilly’s Zepbound (tirzepatide), as obesity remains unclassified as a disease. Consequently, these medications, often viewed as cosmetic, may become less accessible to patients.
Competition Heating Up in the Obesity Space
Competition in the obesity market is heating up as the obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs.
Lilly has also been taking significant strides in the development of oral therapies for obesity, like the first phase III success for its oral GLP-1 candidate, orforglipron, effectively putting pressure on Novo Nordisk.
Several other companies like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Amgen has begun a broad phase III program on its dual GIPR/GLP-1 receptor agonist, MariTide, across obesity, obesity-related conditions and T2D, with the first two phase III studies initiated in March. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Phase III studies with the subcutaneous formulation of VK2735 are on track to begin soon.
NVO’s Stock Price, Valuation, Estimates
Year to date, Novo Nordisk shares have lost 7.2% compared with the industry’s 2.5% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below. The stock is currently trading above its 50-day moving average, but below its 200-day moving average.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Novo Nordisk is trading at a premium to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 18.99 forward earnings, which is higher than 15.64 for the industry. However, the stock is trading much below its five-year mean of 29.25.
NVO Stock Valuation
Earnings estimates for 2025 have improved from $3.80 to $3.84 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have improved from $4.60 to $4.64.
NVO Estimate Movement
The stock’s return on equity on a trailing 12-month basis is 80.95%, which is higher than 33.56% for the large drugmaker industry, as seen in the chart below.
NVO Return on Equity
Here’s How to Play NVO Stock
Novo Nordisk, currently carrying a Zacks Rank #3 (Hold), has the potential to boost shareholders’ wealth in the future. Despite past pipeline and regulatory setbacks, we remain confident that NVO is a good stock to retain. The company operates in a lucrative market that is rapidly expanding. Its strong year-over-year revenues and profits, fueled by rising demand for Wegovy and Ozempic, suggest long-term potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company is actively working to expand the approved uses of its key semaglutide products, Wegovy, Ozempic, and Rybelsus, which could significantly increase the eligible patient pool and drive future revenues.
However, Eli Lilly remains a formidable adversary in the obesity market space, which threatens NVO’s market share.
Hence, we can conclude that the recent uptrend in the stock price can be interpreted as an improvement in conditions for Novo Nordisk, as is supported by the upward estimate movements. Investors who already own the stock should hold their position for long-term gains. Short-term investors are, however, advised to steer clear of the stock to avoid near-term volatility.