Novo Nordisk's shock 2026 guidance points to obesity battle heating up

Danish obesity drug giant Novo Nordisk NOVOb.CO is set to be punished by investors on Wednesday after it gave a far bleaker-than-expected outlook for 2026 and flagged a tough weight-loss market battle ahead as prices come under pressure.

Wegovy maker Novo warned on Tuesday that profits and sales could drop as much as 13% this year, the first declines in years, as heavy price pressure from U.S. President Donald Trump adds to fierce competition in the weight-loss market.

The warning, which hit unexpectedly after the market close in Europe, dragged down Novo's U.S.-listed depository receipts nearly 15%, overturning a promising start to the year as the shares 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 LLY.N 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."

Shares of U.S.-listed obesity drug rival Eli Lilly and other developers also slid, as investors worried about intensifying competition in the blockbuster weight-loss market.

"Where we once enjoyed clear market leadership in obesity treatment, virtually every major pharmaceutical company now recognises this as an attractive market," Novo's CEO Mike Doustdar and chairman Lars Rebien Sorensen said in a statement.

They added the company could not promise a return to the "extraordinary growth rates" of recent years and needed to find new ways to reach more patients because market conditions had changed and "competition has intensified".

WEGOVY PILL SALES OFFER A 'GLIMPSE OF HOPE'

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.

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 so-called compounding of copycat drugs, with as many as 1.5 million Americans using compounded versions of GLP-1 weight-loss medications.

Barclays in a note after the results said that the guidance was worse than expected which would see the main Denmark-listed shares "open significantly down" 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 on Tuesday that weekly prescriptions for oral Wegovy hit around 50,000 by January 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 the strong pill sales, with consumers seemingly willing to pay out of pocket, offered "a glimpse of hope".

Novo's warning ends a years-long 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.

-Maggie Fick and Jacob Gronholt-Pedersen/Reuters