Novo Nordisk enters 2026 on the defense as it faces a ‘must-win' battle in the U.S. market

Core Viewpoint - Novo Nordisk is transitioning from a market leader to an underperformer, particularly in its weight loss business, and is striving to regain investor confidence as it approaches 2026 [1][2]. Company Performance - Novo's stock has faced its worst year since its inception on the Copenhagen stock exchange, attributed to guidance cuts, competition from Eli Lilly, leadership changes, and the influx of cheaper generic drugs in the U.S. market [2]. - The approval of Wegovy, an oral weight loss pill, has provided a temporary boost, increasing shares by nearly 10% as investors hope it will help Novo compete against rivals [3][4]. Product Development - Wegovy's approval as the first oral GLP-1 treatment for weight loss is seen as a significant milestone, with analysts acknowledging its potential to recover lost market share [4]. - Wegovy in pill form has demonstrated an average weight loss of 16.6% over 64 weeks, compared to Eli Lilly's orforglipron, which averages 12.4% over 72 weeks [8]. Competitive Landscape - Eli Lilly is expected to receive FDA approval for its own weight loss pill, orforglipron, by the second quarter of 2026, intensifying competition in the market [5]. - Eli Lilly's Zepbound has gained significant market share, positioning it as a leading treatment for weight loss injections, surpassing Novo's Wegovy [10]. Market Strategy - Novo's strategy emphasizes treating obesity as a disease rather than just focusing on weight loss, which may not resonate with the U.S. market's preferences for immediate weight loss results [11][13]. - The company is also focusing on the direct-to-consumer market, which is crucial for future sales growth, especially as it faces pressure from U.S. drug pricing policies [15][18]. Regulatory and Pricing Challenges - The Trump administration's deal with Novo and Lilly aims to lower prices for GLP-1 medications, which could enhance Novo's competitiveness against cheaper alternatives [17][18]. - Novo's leadership changes and strategic decisions are under scrutiny, with investors looking for signs of improvement in U.S. operations [20][21]. Future Outlook - The approval of a higher dose of Wegovy could align with market demands for greater weight loss efficacy, potentially enhancing Novo's competitive position [14]. - Long-term competition is expected to increase as other pharmaceutical companies advance their weight loss drug candidates, indicating a need for Novo to innovate and diversify its treatment options [24].