Novo Nordisk's shares slumped as much as 20% early on Wednesday as the Danish obesity drug giant warned it would face "unprecedented" price pressures this year, shocking the market with guidance for a sharp sales decline this year.
Wegovy maker Novo warned late on Tuesday that profits and sales could drop as much as 13% this year, the first declines in years, as U.S. President Donald Trump's drive to cut drug costs adds to pressure from fierce competition in the weight-loss market.
"Our 2026 guidance reflects a year of unprecedented pricing pressure," CEO Mike Doustdar told journalists on a call, adding he hoped that the "painful" impact on Novo's finances in the short-term would hopefully be an "investment for our future."
Novo said that there were now far more companies looking to break into the obesity drug market and that it could not promise a return to the "extraordinary growth rates" of recent years.
The share price plunge, which sparked a wider slide in other obesity drugmakers, took Novo's stock to the lowest level since early December, overturning a promising start to the year as it had rallied on strong sales of the new Wegovy pill.
"Novo has provided shocking guidance for 2026," said Markus Manns, a portfolio manager at Union Investment that holds Novo and Eli Lilly shares, adding most investors had expected a mid-single-digit decline in sales and profit.
"Nobody had a double-digit profit decline on the agenda."
Novo is selling lower doses of its daily pill in the U.S. for $149 per month for self-paying patients, rising to $199 in April. Lilly plans to cap higher doses of its obesity pill, if approved, at $399 a month for repeat cash buyers.
Both companies have reduced prices of their injectables for customers paying in cash rather than using health insurance. Novo began selling its Wegovy injection at $349 a month to cash payers in November.
Novo said it expects adjusted operating profit and adjusted sales at constant exchange rates to both fall by between 5% and 13% this year. Sales rose 10% last year, and analysts had, on average, forecast a 2% decline this year, according to a poll gathered by the company.
The firm said its outlook was hit by lower realised prices, especially in the U.S., fierce competition, and the expiry of patents on semaglutide – the active ingredient in its Wegovy and Ozempic drugs – in some markets outside the United States.
It is also facing a challenge from the so-called compounding of copycat drugs, with as many as 1.5 million Americans using compounded versions of GLP-1 weight-loss medications.
Barclays said in a note that the guidance was worse than expected, which would hit the shares "significantly" on Wednesday, although they could gain some reprieve if investors consider the guidance "conservative."
"We expect bulls to suggest this NOVOB guide is a 'kitchen sink' that will be beaten, though we note the same was said last year, and this proved not to be the case," Barclays said, adding the other key positive was the performance of the Wegovy pill.
Novo said weekly prescriptions for oral Wegovy hit around 50,000 by Jan. 23, well above the 20,000 per week from market tracking data that does not capture sales via cash-pay channels such as NovoCare and telehealth services.
Union Investment's Manns agreed that the strong pill sales, with consumers seemingly willing to pay out of their own pockets, offered "a glimpse of hope."
Novo's warning ends a yearslong run of double-digit percentage gains in profits and sales since the launch of Wegovy in June 2021, which ignited a boom in demand for obesity drugs and meteoric growth for the Danish company.
In 2024, it was Europe's most valuable listed company, worth $600 billion. On Wednesday, it was valued at around $259 billion.
