Ozempic Maker's Stock Drops 20% Following Profit Alert

As Novo Nordisk battled to fend off competition in the US, it cut its financial projections. Additionally, a new CEO was appointed, emphasizing the "urgency" of the situation.

The Danish pharmaceutical company Novo Nordisk, which makes the well-known diabetes and weight-loss medications Ozempic and Wegovy, saw its stock fall more than 20% on Tuesday after announcing that its sales this year would increase significantly less than anticipated. The pharmaceutical company predicted that its sales would rise 8 to 14 percent this year, while operating profit growth would be between 10 and 16 percent. The company blamed its slower growth on increased competition in the US. The company once projected a 16–24% increase in sales for 2025.

The share price fell to its lowest point in over three years. Maziar Mike Doustdar, the company's new CEO and current executive vice president for international operations, was also revealed on Tuesday. On August 7, he will assume control. During a call with reporters, Mr. Doustdar expressed his disapproval of the company's share price decline. As an employee, I dislike it. As a C.E.O.-elect, I dislike it, and as a shareholder, I dislike it even more.

He stated that the announcement "reinforces even more the urgency to act on the mandate I've been given." Over the past year, Novo Nordisk's fortunes have drastically turned around. First to the luxury conglomerate LVMH and later to the German software company SAP, it lost its position as Europe's most valuable company. Due to the sharp drop in the company's stock price and shareholders' worries that Novo Nordisk would lose its position as a market leader in a fiercely competitive industry, the board fired Lars Fruergaard Jorgensen as CEO in May.

Additionally, Novo Nordisk has been particularly hard hit by some unsatisfactory clinical trial results and investors' loss of faith in the high hopes of the weight-loss medication industry. According to the company, the majority of its problems occur in the US, where over half of its sales are made. Other obesity medications, also known as GLP-1 drugs, such as the Eli Lilly medications Mounjaro and Zepbound, as well as less expensive knockoffs, are fiercely competing with the company there.

The Food and Drug Administration prohibited the sale of the less expensive goods created by compounding, a method of combining drug ingredients, this year. According to Mr. Jorgensen, Novo Nordisk was expected to recover a portion of its lost market share following the prohibition on compounding weight-loss medications, according to the company's prior guidance. However, he said that hasn't happened yet and that over a million patients are taking compounded GLP-1 medications. Novo Nordisk reported on Tuesday that growth would slow in the second half of the year, despite an 18% increase in sales and a 29% increase in operating profit in the first half of the year.