Novo Nordisk is in a tough spot as Ozempic sales lag behind Eli Lilly ‘s rival anti-obesity drugs, according to UBS. Analyst Matthew Weston downgraded the Danish pharmaceutical giant to neutral from buy, and slashed his 12-month price target some 43%, to about $52.55 from nearly $93 previously. The new objective implies roughly 8% upside from Novo’s Monday close in the U.S. of $48.81. Westin’s believes Novo Nordisk’s Ozempic semaglutide injection will not be able to regain market leadership to rival let alone beat Lilly in the GLP-1 space. Novo Nordisk’s market share loss comes even as it has a more comprehensive product compared to peers, which he said likely signals poor commercial execution and a greater preference for tirzepatide from doctors and patients. Tirzepatide is the active ingredient in Eli Lilly’s Mounjaro and Zepbound weight loss injections. “The rapidly deteriorating growth profile at Novo gives us limited confidence in the growth outlook for its GLP-1 portfolio, which comes with significant concentration risk,” Weston wrote in a 29-page report to clients published Tuesday. “Despite there being a significant unmet medical need and anti obesity medication only recently launched, Novo has not been able to build on its market-leading position, and growth for its GLP-1 portfolio has stagnated.” Novo Nordisk American depositary receipts have plummeted more than 43% this year. The company on June 29 named a new CEO and slashed its full-year guidance , citing weaker growth expectations for its Wegovy obesity drug in the U.S. NVO 1Y mountain Novo Nordisk performance over the past year. Weston cited several reasons to no longer be a buyer of Novo Nordisk stock, including: Expectations that GLP-1 compounders leave an uncertain outlook for U.S. Wegovy sales The lack of commercial execution of its GLP-1 products and lack of uptake in insured channels leading to slowing sales growth Ozempic “plateaued early” even with its brand recognition, and Eli Lilly’s Mounjaro has received a stronger reception from doctors President Donald Trump’s proposal to reimburse for GLP-1 obesity treatments through Medicare could support growth, but demands to offer U.S. sales at European prices could “significantly reduce value” Longer term, although Weston anticipates Novo Nordisk’s Ozempic will lose market share to Eli Lilly, he still sees little threat to Novo’s leadership in the diabetes market given its portfolio of insulin drugs and innovation in the incretin space.
