Novo Nordisk Shares Fall Despite Guidance Raise as Investors Question Wegovy Pill Growth

Novo Nordisk reported stronger-than-expected second-quarter results and lifted its full-year outlook, yet the positive earnings failed to impress investors. Shares of the Danish drugmaker fell as much as 5% after the report as the market focused on lower drug prices and uncertainty over whether the company’s oral weight-loss treatment can restore long-term growth.

The company said lower prices continued to weigh on revenue, although CEO Mike Doustdar argued that the strategy of lowering prices to drive higher patient volumes is delivering results. He said the success of the oral Wegovy pill demonstrates that the approach remains profitable despite pricing pressure.

Doustdar told CNBC that Novo is aiming to find the right balance between pricing and patient access, noting that stronger prescription volumes are offsetting some of the financial impact of lower prices. During the second quarter, the company recorded double-digit volume growth, even as pricing remained a headwind.

Novo also increased its full-year guidance, now expecting adjusted sales and operating profit to range from a 6% decline to flat at constant exchange rates, an improvement from its previous forecast of a 4% to 12% decline. In the second quarter, adjusted sales rose 7%, while adjusted operating profit increased 11%, supported by higher product volumes.

Despite the improved outlook, analysts remained cautious. Many noted that the earnings beat was partly driven by temporary factors such as rebate adjustments, while obesity drug sales were largely in line with expectations. Sales of the oral Wegovy pill also came in slightly below some analyst forecasts, raising concerns about its near-term growth trajectory.

Investor sentiment was further pressured after Novo reported another mixed clinical outcome for its next-generation obesity treatment, CagriSema, reinforcing doubts about the company’s future product pipeline. Analysts at Citi described the results as offering “nothing to inspire,” while Jefferies said the updated guidance was unlikely to materially lift market expectations.

Competition in the obesity treatment market continues to intensify as Eli Lilly expands the reach of its blockbuster drugs Zepbound and Mounjaro. Lilly also launched its oral weight-loss drug Foundayo earlier this year, adding further pressure to Novo’s leadership position.

However, Novo remains optimistic about the long-term opportunity for oral obesity treatments. The company said the Wegovy pill has now surpassed 5 million prescriptions since its launch, supported by encouraging adoption both in the United States and international markets.

Doustdar suggested that oral medications could eventually become the dominant treatment format for obesity, arguing that pills offer greater convenience for many patients. He also emphasized that prescription growth has accelerated despite growing competition, noting that the latest one million prescriptions were achieved in just four weeks compared with eleven weeks for the first million following launch.

According to Novo, approximately 80% of patients taking the Wegovy pill had not previously used a GLP-1 therapy, suggesting the product is expanding the overall obesity treatment market rather than simply shifting patients away from injectable medications.

Even so, investors remain focused on whether Novo can successfully defend its leadership position as competition intensifies. With Eli Lilly continuing to gain market share and expected to report its own earnings shortly, the rivalry between the two pharmaceutical giants is likely to remain a key theme for investors throughout the year.