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Can Novo Nordisk Offset GLP-1 Pressures With Rare Disease Wins?
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Key Takeaways
Novo Nordisk cuts 2025 outlook, primarily due to weaker uptake of Wegovy in obesity markets.
Alhemo wins EU approval for hemophilia A and B with inhibitors, adding to NVO's rare disease portfolio.
Wegovy gains FDA nod for MASH, becoming the first GLP-1 therapy approved for liver disease treatment.
Novo Nordisk (NVO - Free Report) suffered a major setback in July after slashing its 2025 sales and profit outlook, triggering a decline in its share price. The downgrade reflects slower-than-expected momentum for its semaglutide-based drugs — Wegovy and Ozempic — particularly in the U.S. obesity market, where uptake is being disrupted by persistent illegal compounded versions despite the FDA’s crackdown. Adoption of Wegovy has lagged across both cash-pay and insured channels, while international launches are experiencing uneven uptake across obesity markets. Adding to the pressure, Eli Lilly’s (LLY - Free Report) rival GLP-1 therapies, Mounjaro and Zepbound, have quickly gained traction and are outpacing Wegovy and Ozempic in both diabetes and obesity care, intensifying competitive headwinds for Novo Nordisk.
Given these challenges, Novo Nordisk has been working to lessen its reliance on GLP-1 drugs as its primary revenue driver. In recent months, the company has secured notable milestones that reinforce the growth and strength of its Rare Disease franchise to contribute significantly to the top line. NVO is advancing regulatory plans for Mim8 in hemophilia A and has secured EU approval for Alhemo to treat hemophilia A and B with inhibitors. Alhemo is also under EU review for patients without inhibitors. In the United States, the therapy is already approved for both hemophilia A and B, with or without inhibitors.
Recently, the FDA also granted accelerated approval to Wegovy for a new indication. The regulatory body in the United States has now approved Wegovy for the treatment of noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) in adults with moderate-to-advanced liver fibrosis (consistent with stages F2 to F3 fibrosis) in combination with a reduced-calorie diet and increased physical activity. Per management, Wegovy has now become the first and only GLP-1 therapy approved for MASH, marking a major milestone in liver care. The treatment not only halts disease activity but also helps reverse liver damage, giving patients a much-needed new treatment option.
NVO's Competition for Wegovy in the Obesity Space
Eli Lilly is Novo Nordisk’s fierce competitor in the obesity space, which markets its tirzepatide medicines as Mounjaro for diabetes and Zepbound for obesity. Despite being on the market for less than three years, both drugs have become LLY’s key top-line drivers. In the first half of 2025, they generated combined sales of $14.7 billion, accounting for 52% of Eli Lilly’s total revenues. Following strong second-quarter results, Eli Lilly raised its full-year sales guidance to $60-$62 billion from its prior expectation of $58-$61 billion in 2025.
Several other companies, like Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Recently, Viking Therapeutics started two late-stage studies evaluating the subcutaneous formulation of its investigational obesity drug, VK2735. A mid-stage study is currently ongoing, evaluating an oral version of this obesity drug, with a data readout expected later this year.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 34.5% compared with the industry’s 0.3% decline. 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 below its 50- and 200-day moving averages.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Image Source: Zacks Investment Research
Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 14.07 forward earnings, which is lower than 14.85 for the industry. 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 declined from $3.98 to $3.84 per share over the past 30 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have deteriorated from $4.56 to $4.09.
NVO Estimate Movement
Image Source: Zacks Investment Research
The stock’s return on equity on a trailing 12-month basis is 78.64%, which is higher than 34.32% for the large drugmaker industry, as seen in the chart below.
NVO Return on Equity
Image Source: Zacks Investment Research
Novo Nordisk currently carries a Zacks Rank #5 (Strong Sell).
Image: Shutterstock
Can Novo Nordisk Offset GLP-1 Pressures With Rare Disease Wins?
Key Takeaways
Novo Nordisk (NVO - Free Report) suffered a major setback in July after slashing its 2025 sales and profit outlook, triggering a decline in its share price. The downgrade reflects slower-than-expected momentum for its semaglutide-based drugs — Wegovy and Ozempic — particularly in the U.S. obesity market, where uptake is being disrupted by persistent illegal compounded versions despite the FDA’s crackdown. Adoption of Wegovy has lagged across both cash-pay and insured channels, while international launches are experiencing uneven uptake across obesity markets. Adding to the pressure, Eli Lilly’s (LLY - Free Report) rival GLP-1 therapies, Mounjaro and Zepbound, have quickly gained traction and are outpacing Wegovy and Ozempic in both diabetes and obesity care, intensifying competitive headwinds for Novo Nordisk.
Given these challenges, Novo Nordisk has been working to lessen its reliance on GLP-1 drugs as its primary revenue driver. In recent months, the company has secured notable milestones that reinforce the growth and strength of its Rare Disease franchise to contribute significantly to the top line. NVO is advancing regulatory plans for Mim8 in hemophilia A and has secured EU approval for Alhemo to treat hemophilia A and B with inhibitors. Alhemo is also under EU review for patients without inhibitors. In the United States, the therapy is already approved for both hemophilia A and B, with or without inhibitors.
Recently, the FDA also granted accelerated approval to Wegovy for a new indication. The regulatory body in the United States has now approved Wegovy for the treatment of noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) in adults with moderate-to-advanced liver fibrosis (consistent with stages F2 to F3 fibrosis) in combination with a reduced-calorie diet and increased physical activity. Per management, Wegovy has now become the first and only GLP-1 therapy approved for MASH, marking a major milestone in liver care. The treatment not only halts disease activity but also helps reverse liver damage, giving patients a much-needed new treatment option.
NVO's Competition for Wegovy in the Obesity Space
Eli Lilly is Novo Nordisk’s fierce competitor in the obesity space, which markets its tirzepatide medicines as Mounjaro for diabetes and Zepbound for obesity. Despite being on the market for less than three years, both drugs have become LLY’s key top-line drivers. In the first half of 2025, they generated combined sales of $14.7 billion, accounting for 52% of Eli Lilly’s total revenues. Following strong second-quarter results, Eli Lilly raised its full-year sales guidance to $60-$62 billion from its prior expectation of $58-$61 billion in 2025.
Several other companies, like Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Recently, Viking Therapeutics started two late-stage studies evaluating the subcutaneous formulation of its investigational obesity drug, VK2735. A mid-stage study is currently ongoing, evaluating an oral version of this obesity drug, with a data readout expected later this year.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 34.5% compared with the industry’s 0.3% decline. 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 below its 50- and 200-day moving averages.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 14.07 forward earnings, which is lower than 14.85 for the industry. The stock is trading much below its five-year mean of 29.25.
NVO Stock Valuation
Earnings estimates for 2025 have declined from $3.98 to $3.84 per share over the past 30 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have deteriorated from $4.56 to $4.09.
NVO Estimate Movement
The stock’s return on equity on a trailing 12-month basis is 78.64%, which is higher than 34.32% for the large drugmaker industry, as seen in the chart below.
NVO Return on Equity
Novo Nordisk currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.