Novo Nordisk (NVO) has multiple positive catalysts on the horzon, including its recent decision to offer subscriptions to Wegovy, its popular GLP-1 weight-loss drug. Still, given a forthcoming — and potentially huge — negative catalyst facing the company, investors may want to refrain from buying NVO stock for now.
What's going on with Novo Nordisk? Let's take a closer look.
About Novo Nordisk Stock
Headquartered in Bagsværd, Denmark, multinational pharmaceutical and healthcare company Novo Nordisk has been a leader in treating diseases since its founding in 1923. Known best for its diabetes and obesity-care products, the company also develops treatments for cardiovascular disease and rare disorders.
Novo Nordisk has a market capitalization of $162.8 billion and a forward price-to-earnings (P/E) ratio of 10.9 times.
Wegovy Subscriptions, Positive Catalysts on the Horizon
On March 31, Novo Nordisk announced that it will offer three-month, six-month, and 12-month subscriptions to Wegovy through a number of popular consumer healthcare platforms. By utilizing the subscription option, patients can reportedly save up to $1,200 per year on the injection version of Wegovy and up to $600 per year on the Wegovy pill. These savings could very well be sufficient to trigger significantly higher uptake of the drug.
Novo Nordisk has other potential catalysts in store as well. For example, the U.K.'s National Institute for Health and Care Excellence (NICE) recently recommended Wegovy as a preventative treatment for strokes and heart attacks. That decision could increase revenue by a small but noticeable amount.
In November, President Donald Trump made a deal with Novo Nordisk to provide Wegovy to millions of Medicare patients with better pricing. Last month, the U.S. Food and Drug Administration (FDA) also approved Wegovy as a treatment for cardiovascular disease, potentially spurring more coverage from insurers. Finally, Novo Nordisk recently disclosed that it has agreed to provide Wegovy and Ozempic through Hims & Hers (HIMS), a popular consumer healthcare website. The deal came as Hims & Hers — likely responding to pressure from the FDA — haulted its efforts to sell “compounded GLP-1 offerings."
One Huge Negative Catalyst
Novo Nordisk may have positives on the horizon, but there is one negative catalyst to watch out for. Specifically, the FDA recently approved Eli Lilly's (LLY) oral GLP-1 drug, Foundayo (orforglipron). For the first time, Novo's major competitor in the GLP-1 market will market its own GLP-1 tablet.
Wegovy has been offered in pill form since the beginning of this year, while Novo Nordisk's Rybelsus GLP-1 pill has been approved as a type 2 diabetes treatment since 2019. Of course, many people find pills much easier to take than injections, and Foundayo — unlike injectable GLP-1 treatments — does not have to be refrigerated. Moreover, in a trial, Foundayo reportedly reduced participants' blood sugar and weight more than Rybelsus, although oral Wegovy does possess a higher dose of oral semaglutide than Rybelsus.
Still, Eli Lilly's entry into the oral GLP-1 market could meaningfully impact sales and profits. Perhaps reflecting that potential situation, analysts expect Novo Nordisk's EPS to sink 15% this year. For NVO stock, the damage could very well be meaningfully worse than that.
