Novo Nordisk $NVO just lowered its full year guidance as it...
Simon Erickson@7Innovator
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Jul 29, 2025
~4 min read
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Novo Nordisk $NVO just lowered its full year guidance as it acknowledges the increasing competitive threats.
The market responds by selling off the stock by 20% today.
Is that a valid selloff? Will Novo eventually recover?
Here's my take on the NOVO situation:
The market responds by selling off the stock by 20% today.
Is that a valid selloff? Will Novo eventually recover?
Here's my take on the NOVO situation:
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The core issue here is that Novo $NVO wants to sell its branded Wegovy drug for weight loss.
Yet for the past three years, it hasn't had adequate supply to meet the US demand for the drug.
As such, the FDA put semaglutide on the drug shortage list.
That allowed competitors/compounders to manufacture and even to sell semaglutide as their own branded products.
If supply < demand, the FDA allows others to manufacture and sell the product.
So far, so good.
fda.gov/drugs/drug-saf…
Yet for the past three years, it hasn't had adequate supply to meet the US demand for the drug.
As such, the FDA put semaglutide on the drug shortage list.
That allowed competitors/compounders to manufacture and even to sell semaglutide as their own branded products.
If supply < demand, the FDA allows others to manufacture and sell the product.
So far, so good.
fda.gov/drugs/drug-saf…
3
Yet that's no longer the case.
The FDA is now comfortable with Novo's ability to supply enough semaglutide to meet demand and has ordered all compounders.
And it also doesn't want patients buying unapproved versions of Wegovy:
FDA is aware that some patients and health care professionals may look to unapproved versions of GLP-1 (glucagon-like peptide-1 (GLP-1) receptor agonists) drugs, including semaglutide and tirzepatide, as an option for weight loss. This can be risky for patients, as unapproved versions do not undergo FDA’s review for safety, effectiveness and quality before they are marketed.
As of May 22, 2025, Novo again has full coverage under section 503A of the FD&C Act to protect its IP and to be the sole supplier of semaglutide injections for weight-loss in America.
In other words, the compounding of semaglutide for commercial sale is now illegal.
fda.gov/drugs/drug-saf…
The FDA is now comfortable with Novo's ability to supply enough semaglutide to meet demand and has ordered all compounders.
And it also doesn't want patients buying unapproved versions of Wegovy:
FDA is aware that some patients and health care professionals may look to unapproved versions of GLP-1 (glucagon-like peptide-1 (GLP-1) receptor agonists) drugs, including semaglutide and tirzepatide, as an option for weight loss. This can be risky for patients, as unapproved versions do not undergo FDA’s review for safety, effectiveness and quality before they are marketed.
As of May 22, 2025, Novo again has full coverage under section 503A of the FD&C Act to protect its IP and to be the sole supplier of semaglutide injections for weight-loss in America.
In other words, the compounding of semaglutide for commercial sale is now illegal.
fda.gov/drugs/drug-saf…
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But things are also more complicated now.
This is a fast-growing and very lucrative market.
Compounders like Hims & Hers $HIMS have made a ton of money here in recent years. And they aren't giving up without a fight.
They continue to look for loopholes in the FDA's regulations and guidelines that would allow for 'personalized' medications to continue to be manufactured and sold.
Which they consider to be different than Wegovy.
hims.com/weight-loss
This is a fast-growing and very lucrative market.
Compounders like Hims & Hers $HIMS have made a ton of money here in recent years. And they aren't giving up without a fight.
They continue to look for loopholes in the FDA's regulations and guidelines that would allow for 'personalized' medications to continue to be manufactured and sold.
Which they consider to be different than Wegovy.
hims.com/weight-loss
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The ball is in Novo's court now on how they want to handle this.
"Nordisk is pursuing multiple strategies, including litigation, to protect patients from knockoff ‘semaglutide’ drugs."
The first -- and easiest -- solution is to just sell offer a way to sell Wegovy direct to consumers.
That's why they set up the NovoCare Pharmacy in March. Which does consultations with patients and can directly write scripts for Wegovy.
The NovoCare Pharmacy is already writing 11,000 prescriptions weekly for Wegovy, which is more than half of the 20,000 prescriptions it's getting weekly from its nationwide partnership of specialists who are also writing scripts for the drug.
novonordisk.com/content/nncorp…
"Nordisk is pursuing multiple strategies, including litigation, to protect patients from knockoff ‘semaglutide’ drugs."
The first -- and easiest -- solution is to just sell offer a way to sell Wegovy direct to consumers.
That's why they set up the NovoCare Pharmacy in March. Which does consultations with patients and can directly write scripts for Wegovy.
The NovoCare Pharmacy is already writing 11,000 prescriptions weekly for Wegovy, which is more than half of the 20,000 prescriptions it's getting weekly from its nationwide partnership of specialists who are also writing scripts for the drug.
novonordisk.com/content/nncorp…
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The more challenging -- but also more effective -- solution would be litigate against all of the competitors who are currently manufacturing or selling Wegovy knock-offs that are based upon semaglutide.
Novo Nordisk still appears unsure of how this action would resonate with patients.
Novo Nordisk still appears unsure of how this action would resonate with patients.
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This is a strategic decision the company faces.
I'm personally convinced that Novo is going to protect its IP and do everything it can to crack down on the knock-off products and the compounders...including $HIMS.
If they win and now get handle the direct-to-consumer channel themselves, they're likely going to need to make pricing concessions.
The average a month's supply of Wegovy, if paid out of pocket, is currently $1,300.
I'm personally convinced that Novo is going to protect its IP and do everything it can to crack down on the knock-off products and the compounders...including $HIMS.
If they win and now get handle the direct-to-consumer channel themselves, they're likely going to need to make pricing concessions.
The average a month's supply of Wegovy, if paid out of pocket, is currently $1,300.
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So it's no surprise that $NVO stock is selling off today.
It's a valid selloff, based on the company pulling back on its full-year guidance for both revenue and operating profit.
It will likely issue pricing concessions, both in its DTC/cash channel and also in its negotiations with the CMS for Medicare.
It's a valid selloff, based on the company pulling back on its full-year guidance for both revenue and operating profit.
It will likely issue pricing concessions, both in its DTC/cash channel and also in its negotiations with the CMS for Medicare.
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Novo needs to get its house in order first and figure out how to strategically approach this US market for weight-loss that has been growing like gangbusters.
But the bigger-picture and more important takeaway is that the global market for weight-loss drugs has grown 15x in four years.
Total global sales of weight loss drugs were less than $1 billion in 2020 and were $15 billion in 2024.
Even from here, the market could still quintuple and reach $80 billion+ by 2030.
So to recap:
✅Fast-growing markets attract competition.
✅The pharmaceutical industry is highly regulated.
✅Even with competition and regulations, Novo Nordisk is still going to make a ton of money off of Wegovy.
...and...
✅This selloff is most likely a buying opportunity for a best-in-class, 100-year-old company who is the #1 global beneficiary of a long-term and important new trend.
See our complete @7investing coverage of Novo Nordisk $NVO at:
7investing.com/company_name/n…
But the bigger-picture and more important takeaway is that the global market for weight-loss drugs has grown 15x in four years.
Total global sales of weight loss drugs were less than $1 billion in 2020 and were $15 billion in 2024.
Even from here, the market could still quintuple and reach $80 billion+ by 2030.
So to recap:
✅Fast-growing markets attract competition.
✅The pharmaceutical industry is highly regulated.
✅Even with competition and regulations, Novo Nordisk is still going to make a ton of money off of Wegovy.
...and...
✅This selloff is most likely a buying opportunity for a best-in-class, 100-year-old company who is the #1 global beneficiary of a long-term and important new trend.
See our complete @7investing coverage of Novo Nordisk $NVO at:
7investing.com/company_name/n…