Novo Nordisk's shares decline amid sales expectations fallout
- Novo Nordisk's shares fell more than 21% amid a massive decline in sales and profit expectations.
- The loss is the company's most significant since the 1980s, driven by increased competition and compounded alternatives.
- This situation highlights the urgent need for regulatory action against compounded drugs to protect patients and investors.
In Denmark on July 29, 2025, Novo Nordisk, the manufacturer of weight loss drugs Wegovy and Ozempic, faced a substantial decline in its stock price. This decline exceeded 21%, marking the company's largest plunge since the 1980s. The dramatic fall came after the company revised its full-year sales and profit guidance for 2025 downwards, with expectations for sales growth reduced to between 8% to 14% from an earlier target of 13% to 21%. Furthermore, profit growth estimates were revised downward from between 16% to 24% to a new range of 10% to 16%. This situation arises against a backdrop of intensified competition in the weight loss drug market, as Novo Nordisk anticipates slower-than-expected expansion and a persistent use of compounded alternatives. The pharmaceutical company expressed concerns over the availability of compounded drugs, which are often unapproved versions of its products, and which have been proliferating due to previous shortages. Despite the U.S. Food and Drug Administration (FDA) recently declaring that shortages of Novo Nordisk's drugs were resolved, the company continues to show apprehension about unregulated copies entering the market. Since the FDA has allowed pharmacies to compound these alternatives during prior shortages, Novo Nordisk has been advocating for stricter regulations and even a complete ban on these compounded versions, highlighting the potential risks they pose to patients. Novo Nordisk has seen its stock decrease by 37% so far this year due to these compounding factors, alongside the increasing availability of alternatives. Recent months have also revealed warnings from the FDA regarding counterfeit versions of Ozempic. The fallout from these events has reportedly destabilized the company's standing and investor confidence in the compound's market longevity. Novo Nordisk will be announcing its Q2 earnings report on August 6, giving investors more details on the company’s financial posture during this tumultuous time. This period of leadership change adds another layer to this narrative, as Maziar Mike Doustdar is set to officially begin his role as the new president and CEO on August 7, transitioning from his previous position as vice president of international operations. His departure from the interim leadership phase may signal a new strategic direction for the company amid the challenges they are currently facing.