Why sales of Ozempic are slowing down
What's the story
Novo Nordisk, the Danish pharmaceutical giant, has seen a sharp slowdown in sales growth of its injectable diabetes drugs such as Ozempic. The slowdown comes amid fierce competition and looming US tariffs. The company has lost $95 billion in market value since lowering its full-year sales forecast last week. Novo Nordisk's GLP-1 diabetes and obesity drugs had previously made it Europe's most valuable company.
Market performance
Diabetes drugs sales growth slows down
Novo Nordisk has reported an 8% sales growth for its diabetes drugs in the first half of this year. This is a sharp decline from the 21% growth it saw last year. The company's obesity drugs, including Wegovy, did see a massive 56% increase in sales. However, overall sales were only slightly up by 16%.
Competitive challenges
Increased competition and US regulator's decision
Novo Nordisk has been losing market share to US rival Eli Lilly's Mounjaro, which studies have shown to be more effective. Cheaper versions from generic drugmakers have also contributed to this loss. The company has also been affected by "compounding" in the US, where pharmacies make up medications from ingredients. The US regulator has declared an end to this practice.
Strategic shift
Novo Nordisk to take steps to improve efficiency
Novo Nordisk's outgoing CEO, Lars Fruergaard Jorgensen, has said the company will take steps to "sharpen our commercial execution further, and ensure efficiencies in our cost base while continuing to invest in future growth." The company now expects sales growth of 8-14% at constant exchange rates in 2025. This is a significant cut from its previous estimate of 13-21%.
Legal challenges
Investors sue Novo Nordisk
Novo Nordisk is also facing a class action lawsuit in the US from investors. They have accused the company of misleading them with overly optimistic growth forecasts in the lucrative weight loss market.