From Ozempic's miracle to its downfall: The Danish pharmaceutical giant that is faltering

CopenhagenIt wasn't so long ago that Novo Nordisk was the most valuable company in Europe thanks to sales of the drugs Ozempic and Wegovy, which proved to be miracle weight-loss injections. At the beginning of summer 2024, the Danish pharmaceutical company was worth more than the companies of the French luxury conglomerate LVMH and the Dutch chip manufacturer ASML. In fact, Novo Nordisk earned so much money that the Novo Foundation, which owns part of the company, became one of the largest philanthropic foundations in the world, on par with the Bill & Melinda Gates Foundation, created by the founder of Microsoft. Given this boom, the pharmaceutical company's decline over the last two years is all the more striking. This fall is clearly reflected on the stock market, where on June 25, 2024, the company's shares reached a peak of €113, but now their price has dropped by almost 70%. The Danish pharmaceutical company suffered its latest stock market setback last week when its shares plummeted 18% in a single day, coinciding with the release of its 2025 financial results and sales forecasts for this year. According to the company's results, Novo Nordisk continues to be very profitable (€13.7 billion, up 1.4% year-on-year, and sales of €41 billion, a 6.4% increase). The problem deepening its crisis lies in its future outlook, which anticipates a revenue decline of between 5% and 13% by 2026. This drop represents the first decrease in annual sales since 2017, before the company began selling the drug Ozempic. In response to this announcement, Chief Financial Officer Karsten Munk Knudsen admitted that it was a "very disappointing" forecast. Thus, the year has not started well for the company. The company had invested heavily earlier this year in launching a weight-loss pill with the same active ingredient, semaglutide, as the popular drug Wegovy, which, however, is injected. But less than two days later, a pharmaceutical imitation of this drug, manufactured by the American company Hims & Hers Health, appeared on the market, priced at $49 for the first month and $99 for subsequent months, while the drug manufactured by Novo Nordisk sells for $149.

The Danish firm threatened to file a lawsuit, considering the drug an illegal copy, and ultimately Hims & Hers Health withdrew the pill from the market, a decision that boosted Novo Nordisk's shares after their drop a week earlier.

Loss of leadership

However, the pessimistic forecasts for this year for Novo Nordisk have further deepened the challenges facing the chief executive appointed in the summer, Mike Doustdar, who has come to lead the company with the aim of cutting jobs (has carried out the dismissal of 9,000 workersand to instill a more performance-oriented culture after the Danish firm lost its initial leadership in the market for revolutionary weight-loss drugs.

Novo Nordisk's problems with cheaper drug copies are not new and date back to 2022, when the company experienced a shortage in its supply chain that opened the door for other competitors to copy its patented drugs in the US market. At the same time, Novo Nordisk has also fallen behind its main competitor, the US pharmaceutical company Eli Lilly, both in current sales figures and in its expectations for developing new drugs. Its drug, Zepbound, already accounts for more than 70% of weight-loss prescriptions issued in the United States, while the company is also preparing to launch an oral version of the drug.

In addition, companies like Pfizer, AstraZeneca, and Roche also plan to launch their own versions, making it increasingly difficult for Novo Nordisk to gain market share: "Where we once enjoyed clear market leadership, now virtually every major pharmaceutical company is attractive," acknowledged Novo's CEO, Mike Doustdar, in a statement.

But despite the competition, if Novo Nordisk's revenue is expected to decline this year, it is primarily due to the pressure exerted by US President Donald Trump on pharmaceutical companies to lower drug prices in the US market. This agreement significantly affects the drugs Wegovy and Ozempic, and the Danish company had previously acknowledged the difficulties and tense atmosphere in negotiations with the White House.

As if that weren't enough, the patent allowing the manufacture of the drugs Ozempic and Wegoby expires this year in India and China, so experts predict "a flood of this product" with the entry of manufacturers from Asian countries, as CNN explained. For Novo Nordisk, this means having completely new rivals in the boxing ring, so investors believe that the era of Novo Nordisk's incredible growth that dazzled all of Europe is over.