Novo Nordisk is facing growing challenges in the obesity treatment market, with its stock down over 50% in the past year. The decline reflects rising competition, unmet expectations for new drugs, and regulatory uncertainty.
U.S. based Eli Lilly has gained ground with its drug Zepbound, which shows greater average weight loss than Novo Nordisk’s Wegovy. While Novo Nordisk argues that comparisons are misleading due to dosage differences and patient profiles, the market has responded more favorably to Eli Lilly’s results. Novo Nordisk’s experimental drug CagriSema showed promise, with patients losing up to 22% of body weight. However, only 40% reached the 25% target investors had hoped for, leading to disappointment.
The company also struggled with unauthorized compounded versions of its drugs in the U.S., sold at a fraction of the price during supply shortages. Although regulators have moved to limit these practices, some pharmacies continue to offer them. Adding to the pressure, a new U.S. policy aims to align drug prices with those in other developed countries. This could hurt European exporters like Novo Nordisk more than domestic U.S. firms.