Can NVO's Ozempic, Wegovy Sales Improve in 2026 After a Subdued Q3?

Core Insights - Novo Nordisk (NVO) is a leading player in the cardiometabolic market, primarily through its semaglutide-based drugs, Ozempic and Wegovy, which generated DKK 152.5 billion in the first nine months of 2025, with DKK 51.1 billion in Q3 [2][3] Sales Performance - Sales of Ozempic and Wegovy were weaker than expected, contributing to disappointing Q3 results, with earnings and revenues missing estimates due to increased competition from Eli Lilly (LLY) and the widespread use of compounded semaglutide in the U.S. [3][9] - Novo Nordisk's global diabetes market share has decreased to 31.6% as competition from Eli Lilly intensifies [3] Financial Outlook - Following Q3 results, Novo Nordisk revised its 2025 sales and operating profit outlook downward due to pricing pressures, competition, and foreign exchange challenges [3] - The company announced a restructuring program aimed at reducing its workforce by approximately 9,000 employees, targeting annualized savings of around DKK 8 billion by 2026 [4][9] Strategic Initiatives - Novo Nordisk has reached an agreement with the U.S. Administration to reduce prices for Ozempic and Wegovy starting in 2026, which is expected to enhance access and drive prescription growth [5] - The company is pursuing label expansions for its GLP-1 drugs, with Wegovy's label now including additional indications, and is awaiting FDA decisions on new formulations [6] Competitive Landscape - Eli Lilly is a significant competitor, with its tirzepatide-based drugs, Mounjaro and Zepbound, generating combined sales of $24.8 billion in the first nine months of 2025, accounting for 54% of Eli Lilly's total revenues [7] - Other companies, such as Viking Therapeutics, are also advancing in the GLP-1 space, with ongoing clinical trials for their candidates [8][10] Stock Performance and Valuation - Year-to-date, Novo Nordisk shares have declined by 42.9%, underperforming the industry and the S&P 500 [11] - The company's shares are trading at a price/earnings ratio of 12.69, lower than the industry average of 15.84, and significantly below its five-year mean of 29.25 [14] - Earnings estimates for 2025 have decreased from $3.85 to $3.64 per share, and for 2026 from $3.96 to $3.91 [16]