Novo Nordisk (NVO.US) proposed a $23 billion pipeline blueprint, but the market didn't buy it! Investors ask “how to turn against the wind”

The Zhitong Finance App learned that Novo Nordisk (Novo Nordisk), a global pharmaceutical giant headquartered in Denmark, plans to launch more than five major drugs in the next few years or so, and the Danish pharmaceutical company is trying to stay competitive in the increasingly competitive obesity treatment market. The company promised on Capital Markets Day that it would launch more than five major drugs in the next few years and achieve additional sales of more than 23 billion US dollars, yet its stock price plummeted 7.7% in early trading in the European stock market. Novo Nordisk's American stock ADR (NVO.US) also weakened sharply before the US market on Monday. At one point, it plummeted by more than 7%.

Novo Nordisk's latest sales target of $23 billion appears to fall short of market expectations. “Investors are selling stocks because they are not seeing specific new news that could drive Novo Nordisk's share price up,” Nordnet investment economist Pell Hanson wrote in a report.

There is still a huge unmet demand for diet pills around the world, and the long-term growth is based on increased treatment penetration and expansion of indications. According to the World Health Organization, the world has more than 1 billion obese people. Even with rapid expansion of production capacity, GLP-1 therapy is expected to cover less than 10% of potential beneficiaries by 2030.

Novo Nordisk announces plans to launch major drugs in the future, but investors are disappointed

After Novo Nordisk lost its absolute leading position in the booming obesity treatment market and was continuously overtaken by Lilly, investors had hoped CEO Mike Dusdal would come up with a more specific plan to reverse the situation, but the Danish pharmaceutical company seemed disappointed.

Although Novo Nordisk pioneered a new generation of potent drugs to make obesity easier to treat, it still lags behind Eli Lilly.

“We need to work harder, and we will do that,” Dusdal said at an event in London. Novo Nordisk will explore acquisition opportunities while expanding its own R&D pipeline, he said.

However, the presentation did not elaborate on what factors will drive growth. Part of the expected increase comes from the next generation product, CagrisEMA, whose clinical trial results have disappointed investors several times, including failing to meet the efficacy level of Lilly's blockbuster weight loss drug Zepbound in a head-to-head study.

Other potential growth comes from compounds that are in the earlier stages of development, so these compounds face a higher risk of failure.

In pushing Novo Nordisk to adopt a more aggressive strategy, Dusdal reduced the number of employees and management levels. Last week, the company removed “Nordisk” from the name it uses every day to increase brand awareness.

The company has successively experienced disappointing clinical trial results, causing some investors to question whether the company can successfully grow as generic competition for its major drugs intensifies. Ozempic and Wegovy are expected to face patent expiration in Europe and the US early in the next decade.

Novo Nordisk said earlier that overall profit and revenue may drop by up to 6% this year.

The 100 billion dollar diet drug market enters the finals of efficacy expansion, production capacity and affordability

The mainstream institutional forecast range for the global pure diet pills market around 2030 is about US$95 billion to US$105 billion. If diabetes, cardiovascular and other metabolic indications are included, the broad market limit could be close to US$200 billion.

Goldman Sachs recently predicted that the global anti-obesity drug market will reach about US$95 billion by 2030; Morgan Stanley's benchmark scenario is US$105 billion, and the optimistic scenario is US$144 billion. If we start with sales of about US$6 billion in 2023, the benchmark scenario implies a compound growth rate of about 50.5% from 2023; J.P. Morgan predicts that the global pancreatic market, which includes diabetes and obesity indications, will reach 200 billion US dollars by 2030, with a wider range of estimates and statistics.

Novo Nordisk's proposed new drug blueprint reflects its intention to seek the next round of growth through product iteration. This target corresponds to future pipeline product sales contributions. The stock price fell 7.7% in early trading. Combined with some investors' statements that they wanted more specific growth targets, it showed that the market is paying more attention to when new drugs will be launched, how to form a differentiating advantage, and how revenue growth will continue in the next few years. Facing Eli Lilly's competition and patent expiration points for core products in the early 2030s, clear clinical, marketing, and commercialization progress will directly affect the market's valuation of this long-term blueprint.

For diet drug leaders Novo Nordisk and Eli Lilly, transforming weight loss into long-term health benefits and forming a more complete treatment system for metabolic diseases is the long-term blueprint plan of the two major pharmaceutical giants for diet pills. R&D endpoints will further cover cardiovascular events, worsening renal function, metabolic dysfunction-related steatohepatitis (MASH), obstructive sleep apnea, and bone and joint pain and mobility.

Some expanded diet drug products already have a regulatory basis: Novo Nordisk's diet drug product Wegovy has been approved to reduce the risk of serious cardiovascular events in eligible obese or overweight patients, and Zepbound has also been approved to treat moderate to severe obstructive sleep apnea in obese adults. At the same time, oral formulations, low-frequency long-term administration, and better gastrointestinal tolerance and weight maintenance programs will continue to be the focus of competition. Investment value will increasingly focus on products that simultaneously demonstrate fat-loss effects, long-term treatment sustainability, and complication benefits, as this evidence helps expand the target audience and increase payer acceptance.

The next generation of diet pills will first focus on fuller weight loss, higher quality body composition improvement, and more expansive curative effects. The multi-target design aims for deeper treatment results by collaboratively regulating appetite, satiety, blood sugar, and energy metabolism. For example, retatrutide under study simultaneously activates GLP-1, GIP, and glucagon receptors; TRIUMPH-1 phase III results published by Eli Lilly showed that at 80 weeks, the 12 mg group estimated an average weight loss of 28.3% based on the efficacy of continuous treatment, and the treatment strategy taking into account factors such as discontinuation of the drug was estimated to be 25.0%. Novo Nordisk's zenagamtide, a single-molecule GLP-1/amylin double receptor agonist originally known as amyCretin, explores complementary satiety signals. Another R&D route is to increase the rate of fat loss, while preserving lean body mass as much as possible, and verifying the benefits of muscle strength and physical function; the BELIEVE Phase II study of BimaGrumab combined with simeglutide has provided a clinical basis for this optimization of body composition.