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Can Novo's Rare Disease Pipeline Add a New Growth Pillar Beyond GLP-1?
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Key Takeaways
NVO's Frehemgo wins a positive CHMP opinion for hemophilia A in the EU, with launches expected from late 2026.
Sogroya could become the first EU-approved growth hormone treatment for idiopathic short stature.
Rare Disease sales reached DKK 9.1 billion in first-half 2026, supported by Sogroya and other products.
Novo (NVO - Free Report) announced two important regulatory updates in Europe late last week, putting its Rare Disease portfolio back in focus. The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommended approval of denecimig, under the brand name Frehemgo, for hemophilia A in adults and children, with or without inhibitors. The CHMP also issued a positive opinion recommending once-weekly Sogroya (somapacitan) for children with idiopathic short stature (ISS) or unexplained shortness. While both decisions still require final European Commission (EC) action, they could strengthen Novo’s growth prospects beyond its core cardiometabolic franchise.
Frehemgo could add a differentiated product to Novo’s hemophilia portfolio. It is the first factor VIIIa mimetic offering monthly, every-two-weeks and weekly prophylaxis through a single-use prefilled pen. Novo expects to launch the drug in the first European countries in the fourth quarter of 2026, followed by broader EU availability in early 2027. Denecimig is also under FDA review for the same hemophilia A indication as a once-weekly, once-every-two-weeks or once-monthly prophylaxis.
Sogroya, meanwhile, could expand Novo’s rare endocrine franchise. The once-weekly growth hormone therapy is already approved in the EU for treating growth hormone deficiency in adults and children aged three years and older. The latest CHMP recommendation to approve Sogroya for children with ISS follows a May 2026 CHMP recommendation for the drug in children with short stature born small for gestational age (SGA) and those with Noonan syndrome (NS). The EC’s pending decision will cover all three indications — ISS, SGA and NS. If approved, Sogroya would become the first and only growth hormone treatment authorized for ISS in the EU, further expanding the commercial reach of the established therapy.
Novo generated DKK 9.1 billion in adjusted Rare Disease sales in the first half of 2026, with growth supported by Sogroya, particularly in international markets. Outside the EU, Sogroya is approved for growth hormone deficiency in the United States, Japan and China. Its U.S. label was expanded in 2026 to include the SGA, NS and ISS indications. Alhemo also contributes to Novo’s Rare Disease portfolio. It is approved in the United States, Europe, Japan and Australia for routine prophylaxis in patients aged 12 years and older with hemophilia A or B, with or without inhibitors.
Etavopivat is another potential growth driver in Novo’s Rare Disease pipeline, with phase III development completed in sickle cell disease and phase II development completed in thalassemia. The segment could therefore become increasingly important as Novo seeks to diversify revenues at a time when its GLP-1 portfolio faces intensifying competitive pressure across diabetes and obesity care.
Novo Faces Rising Competition From Eli Lilly in GLP-1 Market
Competition from Eli Lilly (LLY - Free Report) continues to weigh on Novo’s core growth outlook. Lilly’s Mounjaro (for type II diabetes [T2D]) generated $18.6 billion in first-half 2026 sales, up 106% year over year, while Zepbound (for obesity) sales rose 60% to $9.1 billion. The two products therefore generated roughly $27.7 billion combined, far outpacing the growth of Novo’s established GLP-1 brands, Ozempic and Wegovy injections for the same indications, respectively. In comparison, first-half Ozempic sales declined 2% at constant exchange rates, while Wegovy product sales increased 7%.
Lilly is also expanding the competitive challenge beyond injectable therapies. Foundayo (orforglipron), its once-daily oral GLP-1 for obesity, offers administration without food or water restrictions and is already competing with Novo’s oral obesity treatment, Wegovy pill. Lilly has also reported positive phase III data for Foundayo in T2D and is advancing retatrutide, with plans to seek U.S. approval for obesity in 2027. As these therapies broaden, Rare Disease’s steady commercial base and advancing pipeline could give Novo an increasingly valuable source of diversification alongside its efforts to defend the GLP-1 franchise.
While Novo and Eli Lilly currently dominate this space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also advancing GLP-1–based therapies for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 RA, VK2735, is being developed in both oral and subcutaneous formulations for the treatment of obesity. Viking recently reported positive topline results from a subcutaneous maintenance study, with patients maintaining up to 97% of their prior weight loss on every-other-week dosing and up to 90% on monthly dosing over the 12-week maintenance period. Viking plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.
Structure Therapeutics’ phase II ACCESS program on its orally administered small molecule GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Based on such encouraging results, Structure Therapeutics has initiated dosing patients in its late-stage ACCOMPLISHprogram to evaluate aleniglipron for chronic weight management.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo shares have lost 22.5% against the industry’s 12.4% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Image Source: Zacks Investment Research
Novo 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 11.51 forward earnings, which is lower than 18.19 for the industry. The stock is trading much below its five-year mean of 28.98.
NVO Stock Valuation
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased from $3.41 to $3.53 over the past 30 days. During the same time frame, Novo’s 2027 earnings estimates have increased from $3.37 to $3.38.
View the Zacks #1 Rank List
Image: Shutterstock
Can Novo's Rare Disease Pipeline Add a New Growth Pillar Beyond GLP-1?
Key Takeaways
Novo (NVO - Free Report) announced two important regulatory updates in Europe late last week, putting its Rare Disease portfolio back in focus. The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommended approval of denecimig, under the brand name Frehemgo, for hemophilia A in adults and children, with or without inhibitors. The CHMP also issued a positive opinion recommending once-weekly Sogroya (somapacitan) for children with idiopathic short stature (ISS) or unexplained shortness. While both decisions still require final European Commission (EC) action, they could strengthen Novo’s growth prospects beyond its core cardiometabolic franchise.
Frehemgo could add a differentiated product to Novo’s hemophilia portfolio. It is the first factor VIIIa mimetic offering monthly, every-two-weeks and weekly prophylaxis through a single-use prefilled pen. Novo expects to launch the drug in the first European countries in the fourth quarter of 2026, followed by broader EU availability in early 2027. Denecimig is also under FDA review for the same hemophilia A indication as a once-weekly, once-every-two-weeks or once-monthly prophylaxis.
Sogroya, meanwhile, could expand Novo’s rare endocrine franchise. The once-weekly growth hormone therapy is already approved in the EU for treating growth hormone deficiency in adults and children aged three years and older. The latest CHMP recommendation to approve Sogroya for children with ISS follows a May 2026 CHMP recommendation for the drug in children with short stature born small for gestational age (SGA) and those with Noonan syndrome (NS). The EC’s pending decision will cover all three indications — ISS, SGA and NS. If approved, Sogroya would become the first and only growth hormone treatment authorized for ISS in the EU, further expanding the commercial reach of the established therapy.
Novo generated DKK 9.1 billion in adjusted Rare Disease sales in the first half of 2026, with growth supported by Sogroya, particularly in international markets. Outside the EU, Sogroya is approved for growth hormone deficiency in the United States, Japan and China. Its U.S. label was expanded in 2026 to include the SGA, NS and ISS indications. Alhemo also contributes to Novo’s Rare Disease portfolio. It is approved in the United States, Europe, Japan and Australia for routine prophylaxis in patients aged 12 years and older with hemophilia A or B, with or without inhibitors.
Etavopivat is another potential growth driver in Novo’s Rare Disease pipeline, with phase III development completed in sickle cell disease and phase II development completed in thalassemia. The segment could therefore become increasingly important as Novo seeks to diversify revenues at a time when its GLP-1 portfolio faces intensifying competitive pressure across diabetes and obesity care.
Novo Faces Rising Competition From Eli Lilly in GLP-1 Market
Competition from Eli Lilly (LLY - Free Report) continues to weigh on Novo’s core growth outlook. Lilly’s Mounjaro (for type II diabetes [T2D]) generated $18.6 billion in first-half 2026 sales, up 106% year over year, while Zepbound (for obesity) sales rose 60% to $9.1 billion. The two products therefore generated roughly $27.7 billion combined, far outpacing the growth of Novo’s established GLP-1 brands, Ozempic and Wegovy injections for the same indications, respectively. In comparison, first-half Ozempic sales declined 2% at constant exchange rates, while Wegovy product sales increased 7%.
Lilly is also expanding the competitive challenge beyond injectable therapies. Foundayo (orforglipron), its once-daily oral GLP-1 for obesity, offers administration without food or water restrictions and is already competing with Novo’s oral obesity treatment, Wegovy pill. Lilly has also reported positive phase III data for Foundayo in T2D and is advancing retatrutide, with plans to seek U.S. approval for obesity in 2027. As these therapies broaden, Rare Disease’s steady commercial base and advancing pipeline could give Novo an increasingly valuable source of diversification alongside its efforts to defend the GLP-1 franchise.
Smaller Biotechs Intensify NVO’s GLP-1 Competitive Pressure
While Novo and Eli Lilly currently dominate this space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also advancing GLP-1–based therapies for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 RA, VK2735, is being developed in both oral and subcutaneous formulations for the treatment of obesity. Viking recently reported positive topline results from a subcutaneous maintenance study, with patients maintaining up to 97% of their prior weight loss on every-other-week dosing and up to 90% on monthly dosing over the 12-week maintenance period. Viking plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.
Structure Therapeutics’ phase II ACCESS program on its orally administered small molecule GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Based on such encouraging results, Structure Therapeutics has initiated dosing patients in its late-stage ACCOMPLISHprogram to evaluate aleniglipron for chronic weight management.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo shares have lost 22.5% against the industry’s 12.4% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
NVO Stock Underperforms the Industry, Sector & the S&P 500
Novo 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 11.51 forward earnings, which is lower than 18.19 for the industry. The stock is trading much below its five-year mean of 28.98.
NVO Stock Valuation
Earnings estimates for 2026 have increased from $3.41 to $3.53 over the past 30 days. During the same time frame, Novo’s 2027 earnings estimates have increased from $3.37 to $3.38.
NVO Estimate Movement
Novo currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.