Novo Nordisk - Europe's most valuable company?

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Grok vastasi näin kysymykseen bull vai Bear:

The news release from Novo Nordisk, accessible via the provided URL (News Details), presents a mixed outlook for the company’s stock, making it neither clearly bullish nor bearish but rather a nuanced situation with both positive and negative elements.

Bullish Factors

Novo Nordisk has recently showcased robust financial performance, which supports a positive view of its stock:

  • Strong Sales Growth: In 2024, the company reported a 25% increase in sales in Danish kroner and a 26% increase at constant exchange rates, reaching DKK 290.4 billion.
  • Profit Gains: Operating profit for the same period grew by 25% in Danish kroner and 26% at constant exchange rates to DKK 128.3 billion, driven by favorable gross-to-net sales adjustments in the U.S. market.
  • Clinical Success: The company’s diabetes and obesity treatment, Rybelsus®, demonstrated a 14% reduction in major adverse cardiovascular events in a clinical trial, reinforcing its leadership in these growing therapeutic areas.
  • Q1 2025 Performance: Early 2025 earnings indicated a profit beat, with operating profit exceeding analyst forecasts, highlighting operational strength.

These achievements reflect Novo Nordisk’s dominant position in the expanding markets of diabetes and obesity care, suggesting long-term growth potential that could appeal to optimistic investors.

Bearish Factors

However, several challenges introduce uncertainty and potential downside risks:

  • Lowered 2025 Outlook: Novo Nordisk recently revised its 2025 sales and profit guidance downward—from an expected sales growth of 16-25% to 13-21% at constant exchange rates—due to weaker penetration of its branded GLP-1 treatments in the U.S., partly linked to competition from compounded GLP-1 alternatives.
  • Counterfeit Issues: Reports of counterfeit Ozempic® injections circulating in the U.S. could erode consumer trust and affect sales of this key product.
  • Market Challenges: Despite the Q1 2025 profit beat, the market’s reaction has been muted due to the lowered outlook and competitive pressures, indicating investor concerns about future performance.

Conclusion

The news release encapsulates a dual narrative for Novo Nordisk. On one hand, its strong financial results and advancements in high-demand treatment areas are encouraging signs of resilience and growth. On the other hand, the downward revision of its 2025 outlook, counterfeit product issues, and competitive headwinds signal potential risks that could weigh on the stock. Whether this is bullish or bearish depends on your perspective as an investor. If you prioritize current performance and long-term market leadership, you might lean bullish. If you’re more cautious about the lowered guidance and market uncertainties, you might see it as bearish. Ultimately, it’s a balanced situation that warrants careful consideration of your own investment strategy and risk tolerance.

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Now, considering that Trump might again make a fuss about drug tariffs, in the short term, the question in my opinion is whether the 450-day course can already be considered to have fallen enough? Technically, it’s probably still in a downtrend.

I asked Grok to answer more briefly and in Finnish and to choose a side. My own opinion is that in the long term, there’s nothing to worry about. In the shorter term, I wouldn’t be surprised if we dipped below 400 again to gain momentum.

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Growth is slowing down; that truly solvent Western market is starting to saturate. Even if the situation were that the obese / capacity is 100:1, growth will inevitably come with lower margins in the future… What is the strategy for reaching these billion obese people? Moving into new markets significantly increases Opex at least… I see pressure on margins. Novo is also making large investments to increase capacity now; digesting these will be in the future…

Looking at future drugs, there’s a tablet semaglutide coming, to which Ozempic/Wegovy users will surely switch, and the tablet is presumably more profitable than injectables, but then again, Lilly’s Orfoglipron is right behind and seems better..?

Novo is a great company but not an obvious buying opportunity yet..? TTM P/E now 450DKK / (4.49+6.12+6.34+6.53) =~ 19

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In my opinion, one must consider the company’s results, guidance, and years of track record and compare these to the share price development, e.g., over the last 3 years. The share price has been stagnant for 3 years, but has the company’s business operations been stagnant? No, absolutely not; the company has grown tremendously and very profitably.

There was certainly an overshoot in the share price upwards when it was at 1000 DKK, but there has certainly also been an overshoot downwards when considering how well the company performs. If one looks at the company’s growth, earning power, and returns on capital, it’s hard to make a bad investment case at these prices. And then, if one considers how, for example, Eli Lilly is priced, then in my opinion, there is good upside here with very little risk. The markets are absolutely massive, and Novo has always performed well regardless of the circumstances. Now that those compounding drugs are brought under control, it further reduces the risk.

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Doesn’t it usually go that the share price, in the long run, follows the company’s earnings development? Here’s a pretty good chart from X showing a rather sharp overshoot downwards in the share price.

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Below is a lot of very good information regarding the fundamentals of the case.

NOVO NORDISK: EXTENDED STUDIES FOR THE OBESITY CANDIDATE CAGRISEMA

STOCKHOLM (Nyhetsbyrån Direkt) The Danish pharmaceutical company Novo Nordisk is broadening, after last year’s study failure in December, the studies on the obesity drug candidate cagrisema.

This was stated by Novo Nordisk CEO Lars Fruergaard Jørgensen during a telephone conference on Wednesday.

This involves an evaluation of cagrisema during an extended treatment period - 80 weeks instead of 68 weeks - and to determine whether dose increases can provide improved weight loss. In addition, a change is being made in the comparative study between cagrisema and competitor Eli Lilly’s obesity drug Zepbound (tirzepatid). The study period in the comparative study is being extended to 84 weeks.

The study, called Redefine 11, with an extended study period and dose increases, is expected to begin in the second quarter of 2025.

Results from the comparative study Redefine 4 are now expected to be read out in 2026. The study will also have a flexible protocol and will now last for 84 weeks instead of the previous information of a 72-week treatment period. According to the previous assessment, the study would have a primary completion (primary completion) at the end of August 2025 followed by an estimated completion (study completion) in early October 2025.

Novo Nordisk is following its plan to submit an application for marketing approval for cagrisema in the first quarter of 2026.

Just before Christmas 2024, Novo Nordisk presented overall results for cagrisema in phase 3. Although the primary goal of the study was achieved with an average weight loss of almost 23 percent after 68 weeks of treatment, the weight loss was still less than expected. Both analysts and Novo Nordisk themselves had spoken of weight reductions of at least 25 percent before the study. The study miss caused Novo Nordisk’s share price to plummet by 21 percent on December 20, 2024.

Novo shares defy downgrade: JPMorgan sees price weakness as buying opportunity

With a rise of 5.2 percent to DKK 464, Novo Nordisk on Wednesday defied a rather weak financial report measured by sales in the important weight loss business and a downward revision of expectations.

The pharmaceutical giant has lowered its expectations for sales and operating income, citing lower-than-expected growth in sales of GLP-1 drugs in the US due to sales of copycat products from so-called “compounders” who make imitations and their own versions of Novo’s drugs.

The shares have been under severe pressure since their peak of over DKK 1,000 in June last year, and analyst Richard Vosser from JPMorgan also believes that the downward revision was already factored into the price.

JPMorgan’s analyst, who has a positive “overweight” recommendation on the stock, sees any weakness in the share price today as a buying opportunity “ahead of the potential to improve sales growth of the weight loss treatment Wegovy as the so-called “compounders” exit the US market.”

Novo Nordisk’s sales of weight loss drugs rose by 67 percent in the first quarter measured in DKK, but analysts had turned up their noses after an increase of as much as 81 percent.

Novo lowers expectations and now sees growth in sales in local currencies of 13-21 percent compared to previously expected 16-24 percent, while operating profit is expected to increase by 16-24 percent compared to previously expected 19-27 percent.

NOVO NORDISK: CVS HEALTH ANNOUNCEMENT NOT LINKED TO PRICE - CEO

STOCKHOLM (Nyhetsbyrån Direkt) The decision by the American pharmacy chain CVS Health to remove Eli Lilly’s obesity drug Zepbound as the preferred option in favor of the Danish pharmaceutical company Novo Nordisk’s drugs Wegovy and Saxenda is not about a price issue.

“It is not a price decision because we did not give any exclusive offer based on a low price,” said Novo Nordisk CEO Lars Fruergaard Jørgensen during a conference call on Wednesday.

The decision was also not made on Novo Nordisk’s initiative.

“We did not ask for exclusive access at CVS,” said Lars Fruergaard Jørgensen, adding that the decision was made by CVS Health.

The Novo Nordisk boss assumes that CVS Health’s decision is instead based on the properties of the drug Wegovy with “a strong cardiovascular protective profile.”

Furthermore, the ongoing evaluation of Wegovy in the treatment of fatty liver, so-called MASH, is believed to have played a role in the decision, according to Lars Fruergaard Jørgensen.

Given that Novo Nordisk has so far only reached a small part of the obesity market, it is about growing the market rather than taking market share in the short term, according to the Novo Nordisk CEO.

NOVO NORDISK: SEMAGLUTIDE IS ON THE WAY TO BE THE FIRST ORAL GLP-1 TREATMENT IN THE USA

STOCKHOLM (Nyhetsbyrån Direkt) The Danish pharmaceutical company Novo Nordisk estimates that semaglutide will be the first to enter the US market for oral obesity treatments in the GLP-1 drug class.

Novo Nordisk CEO Lars Fruergaard Jørgensen said this during a conference call on Wednesday.

In February 2025, the company submitted a marketing application in the US to the US Food and Drug Administration (FDA).

Novo Nordisk CEO emphasizes that the manufacturing of the drug will take place in the US, both in terms of the active ingredient, tablets and packaging.

In the Oasis 4 study, oral semaglutide showed an average weight loss of almost 17 percent. The corresponding weight loss for patients who received placebo was just under 3 percent.

The conference call presentation also shows that approximately 30 percent of patients in the study in question achieved a weight loss of more than 20 percent.

In the secondary objectives of the aforementioned study, oral semaglutide showed benefits in terms of cardiovascular risk factors (cardiometabolic risk) as well as physical function.

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NOVO NORDISK: ANNOUNCEMENT ON AMYCRETIN IN THE COMING MONTHS - R&D CHIEF

STOCKHOLM (Nyhetsbyrån Direkt) The Danish pharmaceutical company Novo Nordisk expects an announcement from regulatory health authorities in the coming months on whether the drug candidate amycretin for obesity can go directly into phase 3 studies.

This was stated by Novo Nordisk’s Chief Research Officer Martin Holst Lange during a conference call on Wednesday in connection with the report for the first quarter of 2025.

Amycretin refers to a combination of a long-acting substance in the drug class GLP-1 and an amylin receptor. The development is taking place for both subcutaneous and oral administration.

In connection with Novo Nordisk’s Capital Markets Day in March 2024, the company’s Martin Holst Lange expressed great enthusiasm for amylin in particular.

Novo Nordisk has previously shown results for amycretin in phase 1/2a, where the weight loss in the highest dose of amycretin was 22.0 percent after 36 weeks of treatment. The level of this weight loss is just below the outcome for the combination preparation cagrisema of 22.7 percent in the Redefine study program. However, in the first phase 3 study from the Redefine program, the treatment period was 68 weeks.

As always, when comparing different studies, caution should be exercised. Not least given that the inclusion criteria for patients may differ between different studies, as well as the study design regarding dosing, etc.

Prescriptions in the United States, its biggest market, have not grown since February despite Novo having increased supplies.

“Growth is expected to pick up in the second-half of the year,” CEO Lars Fruergaard Jorgensen said on a call with journalists.

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Here are some highlights from Novo’s results; some of these have already been repeated above, but repetition is the beginner’s lesson. :slight_smile:

The company currently “serves” nearly 46 million patients with diabetes and obesity treatments, which is significantly more compared to the previous year. Sales of obesity drugs, in particular, grew strongly, driven by international markets.

Sales of GLP-1 drugs for diabetes rose steadily, and demand for obesity treatment grew exceptionally fast. It was also stated that Novo Nordisk is progressing in the development of new treatments, such as the clinical trials for the CagriSema drug and the approval process for oral Wegovy in the United States.

However, the company lowered its full-year outlook because the use of branded GLP-1 drugs in the United States remained lower than anticipated due to the increasing prevalence of US generic alternatives. Despite this, strong growth is still expected in both sales and operating profit.

https://x.com/TheRayMyers/status/1920011655766814909
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Novo’s stock movements are peculiar. Was the drop in guidance not yet priced into the stock, after all, or are Trump’s statements from yesterday about drug pricing now negatively affecting the stock? By the way, where can one best see Novo’s latest analyst updates on the stock?

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Of course, if any new recipe data has emerged, that too can have an effect. It’s a bit difficult for small investors to access, as has been discussed in this thread from time to time.

A few percent here and there seems to be quite a basic fluctuation for Novo.

You can see the monthly changes in those recommendations in the Nordnet application.

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Here’s another visualization of Novo’s numbers; for many, these kinds of visualizations work well, which is why I included them. :slight_smile:

https://x.com/Mayhem4Markets/status/1921253324298272973
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Press release coming: Novo Nordisk A/S: Once-weekly Sogroya® (somapacitan) is an efficacious and well-tolerated long-acting growth hormone in children with growth disorders: results from REAL8 phase 3 basket study presented at the joint Congress of ESPE and ESE | Kauppalehti

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This might also negatively impact Novo’s businesses in America

Trump:

”For many years the World has wondered why Prescription Drugs and Pharmaceuticals in the United States States of America were SO MUCH HIGHER IN PRICE THAN THEY WERE IN ANY OTHER NATION, SOMETIMES BEING FIVE TO TEN TIMES MORE EXPENSIVE THAN THE SAME DRUG, MANUFACTURED IN THE EXACT SAME LABORATORY OR PLANT, BY THE SAME COMPANY??? It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer. The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the “suckers” of America, ALONE. Campaign Contributions can do wonders, but not with me, and not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years. Therefore, I am pleased to announce that Tomorrow morning, in the White House, at 9:00 A.M., I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%. They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA! I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World. Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before. Additionally, on top of everything else, the United States will save TRILLIONS OF DOLLARS. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!

From Donald Trump Truth Social 05/11/25 5:22 PM”

https://x.com/trumpdailyposts/status/1921697332820578362?s=46&t=RA-He6vRSpVmSxhbv1Auvw

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Here are some questions in the air:

  • Will the proposal pass?
  • Will it be limited to the Medicare program? How will it affect GLP-1 medications? Medications acquired through insurance companies? etc.

It’s worth following the comments of analysts familiar with the matter / the company this week

edit.
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Berkshire Novo Hims | Blomster Viljanen | #negotiator 330. Berkshire Hathaway’s Investments and Current State with Jesse Viljanen and Henri Blomster. Hims & Hers stock has generated a staggering +700% for Sami since Henri’s last visit. Novo Nordisk and Eli Lilly’s obesity drugs are critically analyzed from the perspective of production bottlenecks and investor psychology. Investment strategies in a Trumpian world, the significance of dividend streams/buybacks, and choices for growth companies.

00:00 Warren Buffett, Jesse “Dividend Engineer” Viljanen and Henri Blomster, Asilo Asset Management
26:20 Novo Nordisk’s results and position relative to Eli Lilly
28:08 Efficacy differences and production issues of obesity drugs
29:58 Critique of momentum investing, Novo’s production outsourcing
31:40 Royalty issue and reduction of Compounder risk from H2 onwards
33:40 New drug forms: long-acting and oral
35:19 Experimental natural science, thought models and investment psychology
37:43 Hims & Hers’ solutions to everyday problems, hard mints and telehealth compartmentalization

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Novo not hardest hit by Trump’s price decree on the pharmaceutical sector, assesses British major bank

US President Donald Trump’s decree on Monday on lower drug prices will hit several of Novo Nordisk’s colleagues harder than it will hit Novo Nordisk. This is assessed by British major bank HSBC in a note.

It points out that the middlemen, or so-called PBMs, who negotiate prices and decide on drug coverage on behalf of private health insurance funds, may also be hit hard.

The decree requires the US Department of Health and Human Services to initiate negotiations with drug manufacturers within 30 days with a view to achieving lower prices.

This is done based on the principle that the US must pay the same low prices as the country in the world that pays the least.

In addition, the decree sets a goal, among other things, to establish a mechanism that enables American patients to buy drugs directly from manufacturers and thereby bypass intermediaries.

For pharmaceutical companies, the rules will probably hurt those with the greatest exposure to public procurement channels the most, HSBC estimates.

Based on the pharmaceutical portfolios, we estimate that companies with the greatest risk exposure in order are Merck & Co, Bristol Myers, Roche and Amgen; medium risk exposure includes Pfizer, AstraZeneca, Gilead, Novartis, Sanofi and GSK, and despite the headlines about GLP prices, Novo, Lilly and Abbvie have the lowest risk exposure from exposure to public channels, writes HSBC.

The bank also sees a definite structural risk in the medium term for intermediaries.

It estimates, based on a back-of-the-envelope calculation, that the price decree could lead to price reductions in the order of 20 percent via public procurement channels.

Novo sees early protection against cardiovascular events with Wegovy

Novo Nordisk’s weight loss drug Wegovy protects against serious cardiovascular events early in the treatment course.

This is shown by an analysis of the large cardiovascular study, Select, from which Novo presented the main conclusions back in November 2023.

A subsequent analysis, which will be presented at a European congress this week, shows that the risk reduction in relation to serious cardiovascular events, such as blood clots, strokes or death, could be seen already during the first three months of treatment.

In relation to the risk of death, the risk was reduced during six months of treatment, Novo said in a press release.

A total of 17,604 overweight adults with established cardiovascular disease but without diabetes participated in the Select study.

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This point raises questions. To what extent are drug prices lowered in countries with weaker economies, or is such a practice not common at all? Some high-margin products are significantly cheaper, for example, in Turkey compared to European price levels. Do pharmaceutical companies have to raise prices elsewhere so that margins don’t completely collapse in the United States?

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Novo already sells a lot with a DTC model. This applies more to cases where, for example, an Epipen costs 35 euros in a Finnish pharmacy and 750 USD in the US. In my opinion, for good reason, as their healthcare system skims off an awful lot: insurance companies and pharmaceutical companies have their own deals, etc.

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Novo today announced a $2.2 billion licensing deal with Septerna for the development of a small-molecule weight loss drug. A quick glance at Septerna shows it’s only in the discovery phase, meaning this aims far, far into the future (Novo likely has more information on this than what public sources reveal). Septerna just stopped developing its own small-molecule thyroid drug, so they probably have a lot of red ink on the balance sheet and long periods of losses behind them. I didn’t bother digging too deep, as this is looking 5+ years ahead anyway.

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Novo’s CEO is leaving. I don’t know what to think about this: on the one hand, it’s good because the business and stock performance haven’t quite been what was perhaps promised, but on the other hand, it raises concerns about whether all problems are behind us. Novo has performed well even during the last year, but CEO positions in public companies are quite precarious if the stock price development is not pleasing.

https://ml-eu.globenewswire.com/Resource/Download/e1399917-d47b-4c41-81ad-3660b86ba2fa

Edit: here’s the Kauppalehti article:

Edit2: this is also quite interesting food for thought:

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That stock price is indeed the weirdest justification, when they should just buy back their own shares and, in the long run, the stock price reflects cash flows. Of course, the CEO is responsible for communication and such, but my own alarm bells are ringing loudly now.

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