Novo Nordisk Faces Twin Tests: Canadian Generic Launch and Q1 Results Loom

Health Canada authorizes Dr. Reddy's biosimilar semaglutide, threatening Novo Nordisk's Ozempic revenue as share buyback reaches 3.44 billion kroner amid 2026 headwinds.

The Danish pharmaceutical giant is navigating a pivotal moment as its share buyback program crosses the 3.44 billion Danish kroner mark, while a landmark generic approval in Canada threatens to reshape the competitive landscape for its blockbuster diabetes drug Ozempic.

Health Canada has granted Dr. Reddy's Laboratories the green light to market a biosimilar version of semaglutide for type-2 diabetes in 2 mg and 4 mg doses. This marks the first time a G7 nation has authorized a copycat of Novo Nordisk's top-selling GLP-1 therapy. Although the approval excludes Wegovy, the weight-loss variant, Ozempic is frequently prescribed off-label for obesity in Canada, meaning the generic could still siphon demand from that lucrative segment.

The stakes are enormous. Ozempic generated 2.9 billion Danish kroner in Canadian sales in 2025, making it the country's most prescribed drug by revenue — more than triple the runner-up. Over one million Canadians currently take semaglutide, and the market is projected to swell past $4 billion US by 2035. Generic alternatives in Canada typically undercut brand-name prices by 45 to 90 percent, though the pan-Canadian Pharmaceutical Alliance's pricing framework could limit the first entrant to a 15-to-25 percent discount. Even at the lower end, the margin erosion for Novo Nordisk would be significant.

Investment bank BMO described the development as setting "the stage for the first international erosion of Novo's semaglutide revenues." Canada lost patent protection for semaglutide on January 4 of this year — the first major Western market to do so. Eight additional generic applications, including filings from Teva Canada and Sandoz Canada, are pending with Health Canada, with decisions expected in the coming weeks.

The timing compounds existing headwinds. Novo Nordisk has guided for a 2026 revenue decline of 5 to 13 percent on a constant-currency basis, citing Medicare Part D price negotiations in the US, reduced Medicaid reimbursements for obesity treatments, and the "Most Favored Nations" pricing agreement. Restructuring costs of roughly 8 billion Danish kroner add to the pressure. The company's three core brands — Ozempic, Wegovy, and Rybelsus — together generated around $36 billion US in 2025.

Against this challenging backdrop, the company has been aggressively buying back its own shares. Since launching a 15-billion-kroner buyback program on February 4, 2026, Novo Nordisk has repurchased nearly 13.4 million B-shares for 3.44 billion kroner. The current tranche, capped at 3.8 billion kroner, runs through May 4. The average repurchase price has been 256.48 kroner per share.

The stock has shown signs of recovery from its multi-year lows, trading at 34.15 euros in Frankfurt — about 2.9 percent lower on the day but roughly 10 percent above the level a month ago. It remains nearly 51 percent below its 52-week high of 70.13 euros. The relative strength index stands at 25.7, indicating oversold conditions.

Some relief has come from an unexpected direction. Prescription data from the US suggests Eli Lilly's new oral GLP-1 drug Foundayo is off to a weak start, easing competitive pressure on Wegovy and Ozempic in the near term. Kepler Capital has maintained a "Hold" rating, acknowledging that while the operational narrative is improving, the full-year guidance remains a drag.

All eyes now turn to May 6, 2026, when Novo Nordisk reports first-quarter results before the market opens. It will be the first official data point under the negative annual forecast. Investors will scrutinize management's commentary on the competitive landscape — particularly how quickly generic semaglutide gains traction in Canada and whether that market serves as a template for other regions. They will also look for any narrowing of the wide guidance range and updates on pipeline assets, including the sickle cell drug Etavopivat, for which Novo Nordisk plans to file its first approval application in the second half of 2026. Free cash flow for the year is expected between 35 and 45 billion kroner, with capital expenditure running at roughly 55 billion kroner — a level that should decline in subsequent years as ongoing projects wrap up.