Analyst Downgrade Weighs on Novo Nordisk Shares Despite Pipeline Developments

Novo Nordisk DK0062498333

Shares of Danish pharmaceutical giant Novo Nordisk declined by 2.24% on Wednesday, closing at $59.32. This drop occurred against a backdrop of broader market gains, with the stock facing pressure despite positive updates regarding its cell therapy business. A significant factor behind the sell-off was a prominent analyst's decision to slash profit forecasts.

Earlier in the week, Novo Nordisk announced a restructured and expanded collaboration with Canadian biotech firm Aspect Biosystems. As part of the revised agreement, Aspect will acquire the rights to Novo's stem cell-based islet cell technologies and hypoimmune cell development programs, both considered crucial for future diabetes treatments.

Under the new terms, the Canadian company will assume lead responsibility for the development, manufacturing, and commercialization of these cell therapies. Novo Nordisk retains certain rights for later-stage development and will make an additional investment in Aspect. In return, the Danish corporation is entitled to receive royalty payments and milestone fees based on the success of any resulting products.

This transaction follows Novo's October 2025 decision to discontinue its internal cell therapy development, a move that resulted in approximately 250 job cuts. The original 2023 partnership had involved an upfront payment of $75 million and potential milestone payments of up to $650 million.

TD Cowen Slashes Estimates, Maintains Buy Rating

The more immediate catalyst for the share price weakness appears to be a substantial forecast revision from analysts at TD Cowen. Research analyst Phil Nedelcovych reduced his 2026 revenue projection for Novo Nordisk by five percent to 290 billion Danish kroner, placing it below the consensus estimate of 296 billion kroner. The cut to earnings per share (EPS) expectations was even more severe. Nedelcovych's new EPS forecast of 19.30 kroner represents a 14% reduction from his previous estimate of 25.25 kroner.

Despite these lowered estimates, the analyst reiterated his "Buy" recommendation on the stock. However, he did reduce his price target from $105 to $70. He identified several key catalysts for 2026, including the launch of an oral Wegovy pill, study results for CagriSema compared to Eli Lilly's Zepbound, and developments related to Ozempic.

The current Wall Street consensus rating for Novo Nordisk is neutral, with an average price target of $56.21.

Recent Momentum from Wegovy Launch

The recent pullback should be viewed in a wider context. Over the preceding four-week period, Novo Nordisk's stock had advanced by nearly 18%. This earlier strength was fueled by robust U.S. demand for the oral version of Wegovy, which launched in mid-January. On January 16 alone, shares jumped over nine percent after initial prescription data surpassed market expectations.

Further positive momentum came from the British regulatory agency MHRA approving a higher-dose Wegovy variant (7.2 mg weekly). Clinical trial data for this dosage shows an average weight loss of 20.7%.

The company is scheduled to report its fourth-quarter 2025 financial results in early February. Market experts are anticipating earnings per share of $0.91 on revenue of $12.11 billion. The consensus estimate for full-year 2026 revenue stands at $48.11 billion, a key benchmark against which to measure TD Cowen's revised outlook. Upcoming results from the REDEFINE-4 study, which directly compares a Novo Nordisk treatment to Eli Lilly's Zepbound, are likely to provide important direction for the stock in the coming months.