Buyers wiped $70 billion off Novo Nordisk’s market worth on Tuesday after the maker of weight-loss drug Wegovy issued a revenue warning and named a brand new CEO, because it battles rising competitors within the weight problems drug market.
Novo named Maziar Mike Doustdar as its new chief government, turning to a veteran insider to revive gross sales and reassure buyers rattled by fears the Danish drugmaker is dropping floor within the weight problems drug race it began.
Doustdar’s appointment didn’t stem a inventory market rout sparked by Novo slashing its outlook for 2025 gross sales development to between 8% and 14%, from between 13% and 21% beforehand. Its shares plunged almost 30% earlier than paring some losses to commerce down over 20% by mid-afternoon. The shares at the moment are down 44% this yr.
“The magnitude of the guidance cut is a shocker,” Markus Manns, a portfolio supervisor at mutual fund agency Union Funding, a Novo shareholder, informed Reuters, including that Novo’s points went deeper than “compounded” copycats to Wegovy.
Compounded medication are custom-made medicines which can be based mostly on the identical components as branded medication.
Novo has been hit by copycats of its GLP-1 medication Wegovy for weight-loss and Ozempic for diabetes. US regulation bars pharmacies from replicating accepted medication, however has allowed ‘compounding’ for sufferers needing {custom} doses or formulations.
The corporate stated in an announcement that it lower its 2025 gross sales outlook on account of decrease development expectations within the second half within the US, each for Wegovy and Ozempic within the GLP-1 diabetes market.
The drugmaker, which grew to become Europe’s most useful listed firm following the launch of Wegovy in 2021, is now dealing with a reckoning because it seems to show issues round after the abrupt removing in Might of CEO Lars Fruergaard Jorgensen.
At its peak in June 2024, Novo was value as a lot as $615 billion, however its shares have plunged on investor issues in regards to the firm’s experimental drug pipeline and its skill to navigate challenges within the US market.
“The stock has gone from being a market darling to one of its biggest letdowns,” stated Angelo Meda, portfolio supervisor and head of equities at Banor SIM in Milan, which has a small Novo stake. “The biggest concern is the illegal channel siphoning away market share – something that’s hard to quantify. Rebuilding trust will take time.”
New CEO an insider
Doustdar, an Iranian-born, Austrian nationwide, who grew up in the USA, joined Novo in 1992 and can tackle the brand new position on August 7.
He at the moment serves as vice chairman for worldwide operations, a task he took after main the corporate’s companies first within the Center East after which in Southeast Asia, Novo stated.
“We need to increase the sense of urgency and execute differently,” Doustdar informed buyers and analysts on a name. “The fact that my announcement comes right after the guidance update, just makes the mandate ahead even more clear.”
Some analysts and buyers had argued that Novo ought to choose an American, or an individual with in depth expertise working in the USA as its subsequent CEO. Novo has misplaced its first-mover benefit in the USA this yr to rival Eli Lilly.
The brand new chief government’s most pressing problem, based on buyers and analysts, is to revive Novo’s efficiency in the USA, the biggest market by far for weight-loss medication and the place they’re most worthwhile.
Novo launched its weight-loss drug Wegovy almost two and a half years earlier than Eli Lilly’s Zepbound. However Zepbound prescriptions surpassed these of Wegovy this yr by greater than 100,000 per week.
In Might, Novo stated it anticipated most of the roughly a million US sufferers utilizing compounded GLP-1 medication to change to branded therapies after a Meals and Drug Administration ban on compounded copies of Wegovy took impact on Might 22.
“Unfortunately, our latest market research indicates that has not happened,” Chief Monetary Officer Karsten Munk Knudsen stated on a name with analysts on Tuesday. A million or extra US sufferers are nonetheless utilizing compounded GLP-1s, he stated.
Novo has stepped up its dialog with the US FDA to restrict illegal compounding of its medication, the pinnacle of US operations David Moore added on the decision. “Compounding continues to be an issue that we have to address,” Moore stated.
