Lowering fair value estimate for Novo Nordisk due to competitive pressures and slow uptake

From Morningstar: 2025-05-21 06:33:00

We’ve revised Novo Nordisk’s fair value estimate to DKK 595 per share, foreseeing the company capturing $65 billion of the $200 billion GLP-1 market by 2031, ahead of semaglutide’s patent expiration. Potential Medicare negotiations for drugs Ozempic and Rybelsus could start in 2027. We consider Novo’s obesity drug Wegovy a game-changer in the market.

Despite Novo’s strong GLP-1 offerings, such as Ozempic and Rybelsus, competition remains fierce in the diabetes and obesity markets. Novo faces pricing pressure on its insulin products due to competition, and uptake of oral GLP-1 Rybelsus has been slow. Novo’s obesity drug, Wegovy, faced supply issues during its launch.

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