Retatrutide

It’s possible to imagine a world in which Novo Nordisk remained a medium-to-large European pharma company, a little like Merck KGaA or Boehringer Ingelheim, ticking over for hundreds of years, quietly changing patients’ lives without being part of a once-in-a-generation breakthrough. But Novo’s scientists invented semaglutide, and that possibility vanished forever. Semaglutide, the molecule behind a suite of blockbusters including Ozempic and Wegovy, went on to drive Novo to dizzying heights — in 2023 it briefly became the most valuable company in Europe, and at one point its market cap exceeded the GDP of Denmark, its home country. Since mid-2024, however, things have gone badly wrong. Next-generation weight loss drugs have disappointed in the clinic and on the commercial side; Novo has lost out to compounders and been outplayed at nearly every turn by its US rival in the metabolic segment, Eli Lilly. It also lost a high-profile bidding war with Pfizer for the long-acting GLP-1 developer Metsera, which would have added new programs to its pipeline. The company tried to turn a corner last May, ousting its CEO , and it’s been about six months since Maziar Mike Doustdar took over . But if anything, the company’s woes have intensified since, and the stock $NVO is now back where it was in May 2021. It appears that its earlier decisions cast a long shadow, and it’s unclear how long it will be before Novo is able to break free. “It has gotten worse,” Jefferies managing director Michael Leuchten told Endpoints News . He is clear about the scale of the challenge facing Doustdar: “The company is clearly in a strategic conundrum at the moment, and they’ve put somebody into the seat who, I think, from a commercial perspective, is very capable, but the company needs a little bit more than that.” The most recent mishap came from the trial Novo started to prove its GLP-1/amylin combo drug CagriSema was as good as Lilly’s marketed obesity shot Zepbound: In fact, it proved that Zepbound was the better drug and, astonishingly, generated the best weight loss data for Zepbound yet seen. “I am a big fan of a head-to-head — put your money where your mouth is,” Leuchten said. But he took issue with Novo’s suggestion that part of the reason the trial failed was that the patients knew which drug they were getting. “You can’t stand there after the fact and blame the open-label design,” he said. “You designed it. You designed a noninferiority margin. You picked the patients. And then the trial doesn’t work.” Another issue, Leuchten said, is that the pricing of Novo’s drugs has come down “a lot quicker than people expected.” Novo’s management cited the most favored nation deal it cut with the Trump administration last year as part of the reason for the dismal 2026 sales guidance it released at the start of February. The company’s decision this week to halve the list prices of some of its big sellers from 2027 could exacerbate this. Poorly designed clinical trials and falling prices factor into investors’ loss of faith in Novo. But the bigger long-term question surrounds Novo’s terminal value given semaglutide’s expected US patent expiry in 2032. “There is a cliff, and that cliff is about six years away,” Leuchten said. Even with that threat looming, Novo remains highly reliant on its big cash cow, according to Andy Hsieh, a biotech analyst at William Blair. “Basically, they anchored towards semaglutide. They think it’s the best thing in the world, without really having longer-term thinking about the obesity evolution,” he said. Novo has previously opted out of other mechanisms that have proved successful for other companies, such as GLP-1/GIP agonism, which underpins Lilly’s Zepbound. In August 2024, Novo culled a Phase 1-stage once-monthly injected GLP-1/GIP agonist for “portfolio considerations,” and a year later, terminated another, given weekly, that was in mid-stage trials. Hsieh pointed out that Novo had also stopped developing a triple-G — a drug that hits the receptors for GLP-1, GIP and glucagon. As if to compensate, it in-licensed another from United Biotechnology last year. That drug just outperformed Lilly’s similar drug, retatrutide, in Phase 2, but Lilly’s is likely to reach market first. “[Novo] had it in their pipeline, and they have to go out externally, get this triple-G from a China company,” Hsieh said. “It gives you a sense of maybe the longer-term foresight and decision-making process that might not be the most optimal.” In fairness, most of these decisions were taken before Doustdar took the helm. But Hsieh said the company is “very much still wedded” to CagriSema (which contains semaglutide as one of its components), despite the drug underperforming repeatedly in trials. “With the updated corporate strategy we introduced last August, we have doubled down on obesity and diabetes and taken steps to drive market expansion,” a Novo spokesperson told Endpoints. The obvious immediate step Novo could take to improve its fortunes is to buy in some new pipeline assets. It has been doing deals, but some — last May’s tie-up with Septerna and this week’s pact with Vivtex are cases in point — have been for candidates at a very early stage. Many Novo watchers want to see the company buy or license later-stage assets, perhaps for diseases outside its core focus of diabetes and obesity. It acquired Akero Therapeutics in October, gaining a promising late-stage therapy for the fatty liver condition MASH, a move made under Doustdar’s tenure that reversed an earlier decision to walk away. Michael Nedelcovych, a research director at TD Cowen, believes new assets in the cardiovascular area could be “natural bedfellows” for Novo’s current lineup. As an example, he pointed to the asset purchase Novo signed with KBP Biosciences in 2023, through which it gained a drug for uncontrolled hypertension and advanced chronic kidney disease. This ended poorly for Novo, however, with the Danish company taking an $816 million write-down less than a year later after the drug’s late-stage failure in chronic kidney disease. Last year, Novo sought to reclaim some of that money through the courts , claiming fraud on KBP’s part. “In theory [the drug] was great, but didn’t work out,” Nedelcovych said. He still favors hypertension and cardiovascular disease more broadly, as sources of diversification for Novo’s pipeline, as the large patient populations for these conditions can mean big sales. “We have a broad and deep pipeline across obesity and diabetes and their associated comorbidities such as cardiovascular disease and the liver disease MASH, with multiple assets with first-in-class and/or best-in-class potential,” the Novo spokesperson said. “We also expect a significant increase in the number of new projects to enter clinical trials this year, and the bulk of these will be in diabetes or obesity.” Nedelcovych described Metsera, by contrast, as “not a particularly attractive target,” and at the time of Novo’s bid for the biotech, it was hard to see what advantages its monthly injected GLP-1 and amylin drugs could have brought. It is just possible that Novo dodged a bullet here: When Pfizer reported mid-stage data on the most advanced obesity candidate it got from Metsera, its shares fell as the weight loss was lower than with Zepbound on a cross-trial basis. Despite this, Novo’s CFO Karsten Munk Knudsen recently said the company was still considering buying a long-acting GLP-1. But it is not a case of simply snapping up a promising obesity biotech, particularly since many other potential buyers are looking too. “Big pharma has probably shopped these assets very extensively,” Hsieh said. “It’s kind of hard to find that magic bullet and then really reinvigorate investor excitement in a very short period of time.” If Novo is able to build a more varied pipeline via dealmaking, Hsieh thinks it will be through a series of different acquisitions rather than one big one. “We have increased our business development activities in recent years, and we will continue to invest in the right external opportunities going forward,” the spokesperson said. They added that Novo intended to be “disciplined, and only pursue deals that help us meet our strategic and financial objectives.” “They do need a vision,” Leuchten said. “It’s not about the next three months. This is about the next six-plus years. It’s not about whether you run another marketing campaign on something. It’s about portfolio construction.” There is a hint of hope on the horizon, at least for the share price. Nedelcovych suggested that the 2026 sales guidance is so conservative that Novo has a good chance of beating the target — and then its share price will finally tick upward.