Novo Nordisk Faces a Pincer Movement: Legal Headwinds and a Crumbling GLP-1 Fortress

Novo Nordisk shares tumble 46% from peak after CVS strips Wegovy exclusivity, while legal cases over eye damage mount. Hope hinges on CagriSema Phase 3 data at ADA and EU approval of new Wegovy dose.

Novo Nordisk enters June with its Danish shares trading at roughly half their annual peak, battered by a confluence of commercial and legal pressures that threaten to redefine its leadership in the weight-loss drug arena. The stock, which closed at 37.90 euros on 1 June, has shed nearly 15% since the start of the year and now stands some 46% below the 52-week high of 70.13 euros set in June 2025. The immediate catalyst for the latest leg lower came from a critical formulary shift: CVS Caremark, one of the largest U.S. pharmacy-benefit managers, has stripped Wegovy of its exclusive preferred status, granting Eli Lilly’s oral therapy Foundayo equal footing on its list from 1 June. Come October, Lilly’s injectable Zepbound will also gain broader preferential access, exposing Novo Nordisk to intensified price and volume competition in the very GLP-1 segment it once dominated.

The commercial setback is accompanied by a growing legal storm. Multiple U.S. law firms, including Parker Waichman LLP, have filed product-liability complaints alleging that Wegovy and Ozempic caused non-arteritic anterior ischemic optic neuropathy (NAION), a potentially blinding eye condition. A specific lawsuit was lodged on 29 May in the Eastern District of Pennsylvania, citing a study from Harvard’s Mass Eye and Ear that found diabetic patients using semaglutide face a fourfold increased risk of developing NAION compared with those on alternative treatments. These claims are being consolidated under Multidistrict Litigation No. 3094, which already bundles thousands of cases alleging gastrointestinal and ophthalmological harm.

Yet the coming days could offer a reprieve for investors focused on the pipeline. From 5 to 8 June, Novo Nordisk will present 40 scientific abstracts at the American Diabetes Association’s annual meeting in New Orleans, with the centerpiece being Phase 3 data for CagriSema—a fixed-dose combination of semaglutide and the long-acting amylin analogue cagrilintide. The REIMAGINE-1, -2, and -3 studies will detail weight reduction and glycaemic control across various type 2 diabetes populations, while interim Phase 2 data on Zenagamtid, an injectable GLP-1/amylin therapy, will also be unveiled. On 7 June, management will host an R&D investor day to discuss the clinical implications of these findings in depth.

A separate regulatory tailwind emerged just before the conference. The European Medicines Agency’s Committee for Medicinal Products for Human Use has recommended approval of a new 7.2-mg single-dose pen version of Wegovy, which in clinical trials achieved a mean weight reduction of 20.7%. This approval, combined with compelling ADA data, could help reframe the narrative around Novo Nordisk’s competitive positioning—even as its financial outlook for 2026 remains cautious. The company expects revenue and profit to decline by between 5% and 13% at constant exchange rates, driven by lower U.S. pricing and the loss of patent protection for semaglutide-based products in China and Brazil.

To counter this erosion, Novo Nordisk is accelerating its digital transformation. In April it struck a partnership with OpenAI to deploy artificial intelligence across research, manufacturing, and sales, with the aim of shortening development timelines. Meanwhile, a share buyback program of 15 billion Danish kroner, launched in February and running through early 2027, has so far bought back roughly 35 million B-shares, equivalent to about 0.8% of total equity. As of 1 June, the stock was trading at 38.15 euros, still nearly 46% below its 52-week peak, suggesting the buyback has done little to stem the selling pressure.

An unexpected research note added another dimension to the week’s news. On 31 May, the journal Fertility and Sterility published a study showing that women who lost at least 10% of their body weight on semaglutide experienced an average 51% reduction in testosterone levels—a finding that could point toward a potential application in polycystic metabolic ovarian syndrome. Novo Nordisk welcomed the independent research but stressed it has no immediate plans to pursue a formal indication in that area.

Whether the ADA presentations can spark a meaningful reversal will become clear after 8 June. For Novo Nordisk, the stakes have seldom been higher: the pipeline must deliver a compelling counterweight to a lost formulary edge, a pileup of lawsuits, and a profit outlook that calls the company’s near-term growth story into question.