From top 10 to disappointment: How Ozempic maker lost its stock market glory
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Everything seemed to be going swimmingly for Novo Nordisk , but its latest forecasts have reversed course. Just a few weeks ago, things were going very well for the pharmaceutical company, with optimistic investors and the market in its favor. So much so, that it was briefly the most valuable company in Europe . But all good things must come to an end; the company 's moment of glory is over.
Now, its shares are on track for their worst week on record , plummeting 33% due to poor guidance . The Ozempic manufacturer cut its guidance for the year, which was not well received by the market. The reason for this reduction? Declining optimism about the performance of its obesity treatment in the US, which also coincided with the announcement of the appointment of Maziar Mike Doustdar as president and CEO, effective August 7.
Added to this is Friday's news. The company has also been affected by US President Donald Trump's demands for pharmaceutical companies to lower drug prices in the United States. All of this has led to Novo's market capitalization now standing at $206 billion , according to Bloomberg data, below companies like Nestlé, AstraZeneca, Shell, and HSBC.
"We've long called Novo a 'show me' story," Barclays analyst Emily Field told Bloomberg. "But with Novo struggling to compete with cheaper and imitation versions of its drugs and a new pipeline lagging behind rivals, we're hard pressed to see what will bring investors back."
Tuesday's warning comes after a difficult year in which the stock plunged 71% from last summer's all-time high . The problems have included disappointing clinical trial results for experimental drugs, growing competition from Eli Lilly , and the ouster of its former CEO.
" It won't be an easy fix ," Field warned. "Novo is due to report second-quarter results on Wednesday. Competition from cheaper copycat options for American patients has been a headache for Novo. Compounding pharmacies are allowed to produce and sell cheaper drugs and copies of a drug when brand-name drugs are in short supply. It remains a problem ." In fact, Novo attributed its forecast cut to broader competition.
There are even investors who regret having invested in the company. " We made the wrong decision on Novo ," Rajesh Kumar, an HSBC analyst, told Bloomberg. We'll have to wait for its next financial results, but for now, the Ozempic manufacturer is struggling.
Everything seemed to be going swimmingly for Novo Nordisk , but its latest forecasts have reversed course. Just a few weeks ago, things were going very well for the pharmaceutical company, with optimistic investors and the market in its favor. So much so, that it was briefly the most valuable company in Europe . But all good things must come to an end; the company 's moment of glory is over.
El Confidencial
