Novo Shares fell sharply on Monday after the company’s new long-term goals failed to allay investors’ concerns about whether it can compete in the increasingly crowded weight-loss market it helped pioneer.
The Danish drugmaker said it aims to launch five or more potentially “multi-blockbuster” medicines by 2030 and generate more than 150 billion Danish kroner ($23 billion) in risk-adjusted pipeline sales, including liquid assets, by 2035.
Although the company did not provide details, it expects its revenue growth rate from 2026 to 2030 to be similar to that of other companies in the industry.
Copenhagen-listed shares fell as much as 7%, but have since pared some losses and were trading 5.4% lower as of 12:30pm local time.
“Investors were hoping for a ‘miracle’ of projects to turn momentum around in the short term,” Per Hansen, savings economist at Nordnet, told CNBC. “There are no miracles for obvious reasons.”
“The elephant in the room”
CEO Mike Doosder told investors at the company’s Capital Markets Day in London that the “elephant in the room” is that semaglutide, the active ingredient in weight loss and diabetes drugs, will lose key patent exclusivity starting early next decade. Semaglutide’s patent expires in 2032 in the U.S. market, which accounted for more than half of Novo’s overall sales last year.
This loss of exclusivity is “something that most people are concerned about, and rightly so,” Dusdahl said.
“We’ve created an incredibly attractive market, and now almost every pharmaceutical company, large and small, is trying to compete with us. We need to be prepared for that,” he added.
Dusdahl also revealed the company’s diversification plans, adding that the company is not “downplaying” the “challenges” associated with “loss of exclusivity” and associated pricing pressures.
“We’re going to come out on the other side of LOE as a larger company and a more diversified version of LOE than we are today,” he said.
Eli Lilly stock has far outperformed Novo ADR over the past year.
Ahead of Monday’s opening bell, Novo’s share price has fallen 27% in the past 12 months, while its biggest rival Eli Lilly The stock price rose 52% during the same period.
Lilly, along with Munjaro and Zepbound, has managed to capture a majority market share in the injectable GLP-1 space, despite launching the drug years after Novo’s.
Novos launched Wigovy tablets in the U.S. with great success earlier this year, but investors remain cautious about the company’s prospects for regaining ground. The company has begun rolling out Wegovy tablets in other markets, but they still account for a small portion of total sales.
A series of clinical setbacks and leadership turmoil over the past year have further heightened investor concerns.
Novo announced last week that it would change its brand name from Novo Nordisk to Novo and revamp its corporate culture. Dusdar told CNBC that the rebrand and culture refresh are “part of the same package” to counter fierce competition from Lilly.
Investors wanted more
Jacob Pedersen, investment strategist at Danish bank Middelfart Sparekasse, told CNBC that Monday’s announcement lacked the financial ambition that the market had expected, despite Novo’s stable operating margins.
“Investors are very particular about what they want from Novo, and this is not the case,” Pedersen said, adding that Novo’s growth targets, consistent with the broader pharmaceutical peer group, suggest slower growth than investors have historically expected from the company.
In August, Novo said it expected adjusted sales and operating profit to both decline 6% to be flat in 2026, constant currency fluctuations.
Analysts and investors are divided on whether Novo should significantly expand its portfolio or focus on its existing therapeutic areas.
“It’s been a while since the company wanted to focus more, and now they want to expand even further,” Pedersen said.
The diversification efforts mark a shift in strategy Novo launched after becoming CEO last year, when Novo increased its focus on its core obesity and diabetes business and moved away from expanding into new areas.
Novo said Monday that the company is now working beyond its core areas of obesity and diabetes. Dusdahl said that while these remain Novo’s foundation, the company now wants to build a portfolio around hematology, endocrine, liver and cardiovascular diseases.
He also said Novo will be more aggressive in business development, which is not included in its 2030 sales targets.
-CNBC’s Charlotte Reed and Mike Considine contributed to this report.
