By Stine Jacobsen and Maggie Fick
COPENHAGEN, Aug 5 (Reuters) – Novo Nordisk CEO Mike Doustdar sought to reassure investors on Wednesday that the drugmaker can strengthen its pipeline, pledging faster research and bolt-on acquisitions after an upgraded 2026 outlook failed to lift sentiment.
The Danish drugmaker raised its full-year profit and sales outlook, but investors focused instead on slightly weaker-than-expected sales for its new Wegovy pill and another setback for next-generation obesity drug CagriSema.
Novo is under pressure after losing ground to U.S. rival Eli Lilly in the obesity drug market that analysts expect will be worth over $100 billion a year by 2030. Its new pill and pipeline of new drugs are a key focus for investors.
Novo’s stock was down over 4% while Lilly’s rose more than 7% after it delivered strong earnings.
“Because of the setback, we need to have more shots at goal. We need to be faster and we need to learn from the failures and reinvent ourselves again,” Doustdar said, referring to recent trial results.
NOVO NEEDS A STRONG PIPELINE AS PATENT CLIFFS LOOM
Doustdar, a year into the top job, is trying to convince investors Novo can find new blockbuster obesity drugs before semaglutide, the active ingredient in its Wegovy and Ozempic treatments, loses patent protections by early next decade.
A string of late-stage trial setbacks has intensified investor calls for deals and put scrutiny on Novo’s R&D.
“They need to have a strong pipeline to withstand the pressure when semaglutide hits the patent gap,” said Morten Gregersen, chief portfolio manager at Danish asset manager and Novo shareholder Formuepleje.
“There is another disappointment from CagriSema, and it probably underlines the biggest strategic problem for Novo.”
Novo’s Copenhagen-listed stock has recovered some 30% from a March low but remains at less than a third of its 2024 peak, when Novo temporarily became Europe’s most valuable listed company.
Doustdar said the Wegovy pill, launched this year in the U.S., Britain and the United Arab Emirates, had captured around 90% of the oral obesity market despite competition from Lilly’s pill. He said Novo planned to launch the drug in Germany “soon”.
Chief Financial Officer Karsten Munk Knudsen said the upgraded outlook was driven by stronger GLP-1 sales and growth outside the U.S., while Novo still expects U.S. sales to decline this year. He said pricing of the pill was “in the right place”, though it would depend on competition and consumer behaviour.
LIFE BEYOND WEGOVY AND OZEMPIC?
The failure of cardiovascular drug ziltivekimab and recent setbacks for obesity and diabetes drug CagriSema would prompt Novo to move faster rather than changing course, Doustdar said.
Novo would accelerate research, pursue bolt-on acquisitions and broaden its focus beyond obesity and diabetes, he said.
One of Doustdar’s first moves as CEO was to combine Novo’s R&D units under a single executive rather than two, which has sped up decision-making and development timelines, he told Reuters in an interview.
Doustdar said Novo would reveal more early-stage projects at its September investor day, acknowledging that investors remained sceptical because many programmes had yet to be disclosed.
Novo is also looking beyond diabetes and obesity. Doustdar said the biology behind GLP-1 medicines could unlock treatments for conditions including addiction and skin diseases. Novo would “follow the science,” he said.
For now though, investors remain focused on the disappointing trial results for CagriSema, a drug Novo still plans to launch next year.
“This puts the spotlight on Novo Nordisk’s pipeline and its robustness,” AL Sydbank said in a note to clients, adding that while Novo’s earnings should have prompted a sigh of relief from investors, the latest data and impairment charges had dented sentiment.
(Reporting by Stine Jacobsen, Maggie Fick, Louise Rasmussen, Bhanvi Satija; Editing by Adam Jourdan, Rashmi Aich, Mark Potter, Elaine Hardcastle)
Comments