Novo Nordisk’s stocks experienced the sharpest monthly decline since July 2002 due to growing competition and several disappointing trial results. However, analysts remain optimistic about the shares, forecasting a potential price upside of up to 60% over the next 12 months.
Europe’s largest pharmaceutical firm, Novo Nordisk, saw its stocks tumble 27% in March, marking their worst monthly performance since July 2002. As of market close on 31 March, the Danish firm’s share price had fallen to 469.8 Danish Krone (€63), its lowest level since February 2023. The stock has now declined 54% from its all-time high in June 2024, losing its position as Europe’s most valuable company to LVMH and SAP.
Eli Lilly posts growing threat to Novo Nordisk’s market share
Investors sold off Novo Nordisk’s shares due to growing competition from its US rival Eli Lilly. Eli Lilly’s weight-loss drugs, Zepbound and Mounjaro, directly rival Novo Nordisk’s Wegovy and Ozempic, intensifying the competitive landscape. Year-to-date, Novo’s shares have dropped 25%, while Eli’s stock has gained 4.6%.
The recent US weekly prescription data showed signs that Novo Nordisk may be losing market share to Eli Lilly, leading to a 0.9% drop in Novo’s stock and a 0.4% gain in Eli Lilly’s shares on the final trading day of March.
Novo Nordisk’s net profit margin declined to 34.8% in 2024, down from 36% in 2023. Additionally, the company provided softer guidance for 2025, forecasting revenue growth of 16% to 24% at constant currency—the mid-point marking the slowest pace in three years. Analysts at Bank of America expect further downward revisions to its 2025 growth outlook when the company reports quarterly earnings in May.
Investor concerns have also been heightened by US President Donald Trump’s announcement to impose tariffs on pharmaceutical products, which could erode profit margins.
Disappointing trial results weigh on shares
A series of disappointing trial results for Novo Nordisk’s next-generation weight-loss drugs has exacerbated investor concerns about its competitiveness. In December 2024, the company announced phase 3 trial results for its new obesity drug, CagriSema, revealing a weight loss of 22.7% after 68 weeks—short of the projected 25%. The announcement triggered a 20% single-day drop in Novo’s share price, the sharpest in its history.
In early March, the company released updated trial data showing that CagriSema only achieved a 15.7% weight reduction over 68 weeks, prompting an 8% decline in its share price.
Meanwhile, Eli Lilly is expected to release trial results for its latest weight-loss drug, retatrutide, later this year. Preliminary results published in September showed that patients who took retatrutide experienced a 24% weight reduction after 68 weeks. Both CagriSema and retatrutide are set to seek regulatory approval in the first quarter of 2026.
Price cuts in the most popular weight-loss drug
Despite recent setbacks, Novo Nordisk’s latest price cuts for its leading weight-loss drug, Wegovy, have been viewed as a strategic move to strengthen its US market share. Following the US Food and Drug Administration’s announcement that shortages of Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy had ended, both companies launched online pharmacies offering lower-cost, reduced-dosage vials for weight-loss treatments. Novo Nordisk now provides cash-paying customers with a 50% discount on Wegovy, a move seen as a bid to regain market share.
Many analysts remain bullish on Novo Nordisk’s long-term growth prospects. According to consensus estimates from Markets Insider and Bloomberg, the stock could see an average of 57% to 60% upside potential over the next 12 months.
