Danish pharmaceutical giant Novo Nordisk (NYSE: NVO) reported a rise in third-quarter revenue and earnings but surprised markets on Wednesday by lowering its full-year 2025 sales and profit outlook for the fourth time, signaling persistent headwinds for its blockbuster GLP-1 portfolio.
The company now expects full-year sales growth, at constant exchange rates, to be in the range of 8% to 11%, down from a previous forecast of 8% to 14%. Its operating profit growth guidance was revised more sharply to 4%-7%, compared to the prior 10%-16% range.
The adjustment reflects mounting challenges for its core GLP-1 drugs for diabetes and obesity, including Ozempic, Rybelsus, and Wegovy. David Moore, Executive Vice President of North America Operations, highlighted on the earnings call that the unbranded compounded versions of GLP-1 drugs represent a significant and growing challenge, estimating that over one million patients in the U.S. are now using these non-FDA-approved alternatives.
Competitive pressure is also intensifying. Over the past 12 months, Novo Nordisk has ceded approximately 9 percentage points of its global GLP-1 market share, largely to rival Eli Lilly, which has gained significant traction with its drugs Mounjaro and Zepbound. Additionally, costs associated with the recent acquisitions of Akero Therapeutics and Omeros contributed to the lowered profit forecast.
In response, the company’s new CEO, Maziar “Mike” Doustdar, stated that Novo Nordisk is “sharpening its strategic focus.” The firm has terminated several R&D projects to concentrate resources on its core diabetes and obesity franchises and announced plans to cut approximately 9,000 jobs as part of this restructuring.
To reignite growth, the company is pursuing a multi-pronged strategy. It is advancing an oral version of Wegovy, aiming for FDA approval by the end of 2025 to broaden market access. In a significant expansion move, Novo Nordisk has proposed a strategic acquisition of Metsera for up to $10 billion, aiming to integrate its promising GLP-1 pipeline, though the deal faces regulatory scrutiny and a competing bid from Pfizer.
A potential long-term tailwind emerged from a recent policy announcement that, starting in 2026, the Trump administration will extend Medicare coverage to obesity drugs from Novo Nordisk and Eli Lilly. While this will necessitate price reductions, it substantially expands the addressable market.
Despite near-term pressures, several catalysts could fuel a recovery. The most closely watched is CagriSema, an investigational therapy that mimics both GLP-1 and amylin hormones. While its phase III data slightly missed lofty market expectations, it demonstrated superior efficacy to semaglutide, and analysts project it could achieve annual sales of $15.2 billion by 2030. The development of an oral semaglutide is also critical, as its lower production cost and greater convenience could help fend off competition from compounded drugs and bolster its position against Eli Lilly.
Novo Nordisk’s current growth rates in revenue and profit still outpace most of its large-cap peers. With its stock valuation near a two-year low, these potential catalysts may present a compelling opportunity for investors, who are now watching to see if the Danish leader can successfully navigate this turbulent period and return to its former robust growth trajectory.
