Novo Nordisk’s Balancing Act: Weighing a Lost CVS Advantage Against a Make-or-Break Data Readout

CVS Caremark revokes Wegovy's preferred status on formulary, opening door for Eli Lilly. Novo Nordisk shares fall 40% in 12 months as ADA meeting nears; $15B buyback underway.

Novo Nordisk enters one of its most consequential weeks with a battered share price standing nearly 40% lower over the past twelve months, and the immediate outlook offering little relief. A crucial formulary advantage in the US obesity market has just been revoked by pharmacy benefit manager CVS Caremark, setting the stage for a more direct rivalry with Eli Lilly just as the Danish drugmaker prepares to unveil the clinical evidence for its next-generation pipeline at the American Diabetes Association meeting in New Orleans.

CVS Caremark is dropping Wegovy's exclusive preferred status on its standard commercial formulary template. Under the revised arrangement, Lilly’s new oral tablet Foundayo will be listed from 1 June, while the injectable Zepbound returns as a preferred option from 1 October. Novo Nordisk insists that both its injectable Wegovy and the newly launched oral tablet retain preferred status, but the critical shift is that Wegovy no longer stands alone with a clear access advantage. The standardised commercial formulary template covers roughly 25 million to 30 million Americans, making such reimbursement positions as vital as marketing or clinical data.

The move unwinds a deal struck last year, when CVS removed Zepbound from its covered list after an agreement with Novo Nordisk and made Wegovy the preferred obesity drug from July. That decision prompted a class-action lawsuit from Zepbound users, while CVS argued it was intended to spur competition and rein in GLP-1 costs. Now the PBM expects additional savings of 10% to 15% in the weight management category. A Truveta analysis of 700,907 patients illustrates how powerfully such formulary changes can shift prescribing patterns: after a prior CVS alteration, the monthly switching rate away from tirzepatide jumped from around 0.6% to 10.2%, before stabilising again — a sharp but temporary disruption.

Novo Nordisk’s stock has already absorbed considerable punishment. In European trading the shares stand at €38.10, down 2.45% on the day, with a year-to-date decline of 14.73% and a 12-month drop of 40.08%. In Copenhagen the B-shares trade at roughly 293 Danish kroner, equivalent to a price-to-earnings ratio of about 11. The dividend yield currently runs at 3.84%. Analysts characterise 2026 as a transition year, with US pricing pressure and doubts about pipeline competitiveness weighing on valuation.

Against this commercial headwind, management is signalling confidence through its capital return strategy. On 1 June Novo Nordisk filed an updated buyback programme with the SEC. The overall framework allows for up to 15 billion Danish kroner over twelve months starting in early February. A sub-programme of up to roughly 11.2 billion kroner for B-shares began in early May and will run until early next February. As of 29 May, the company had repurchased 17,889,179 B-shares at an average price of 263.47 kroner, for a total of 4.71 billion kroner. Novo now holds 35,074,480 B-shares in treasury, representing 0.8% of its share capital. Weekly buying activity has averaged about 210,000 B-shares at prices between 286.16 and 293.42 kroner.

The next catalyst arrives swiftly. From 5 to 8 June, Novo will present 40 abstracts at the ADA Scientific Sessions in New Orleans. The centrepiece is phase 3 data from the REIMAGINE-1, -2 and -3 studies testing CagriSema, a fixed-dose combination of the GLP-1 receptor agonist semaglutide and the long-acting amylin analogue cagrilintide. These trials examine efficacy and safety in type 2 diabetes patients, with investors focused on blood glucose control and weight reduction. The key question is whether the combination can outperform existing monotherapies. Alongside, phase 2 data on Zenagamtide, an experimental GLP-1/amylin-based weekly injection, will be released, alongside updated cardiometabolic profiles for Ozempic and Wegovy.

On 7 June, management will host a dedicated R&D investor event to detail the clinical results and outline the regulatory path for CagriSema. The FDA decision on CagriSema in weight management is expected in the second half of 2026, with some pointing to the fourth quarter. Novo Nordisk raised its 2026 guidance in May but still forecasts a currency-adjusted revenue and operating profit decline of 4% to 12%, excluding the impact of the 340B drug pricing programme.

Meanwhile, competitive pressures are mounting from multiple directions. Eli Lilly’s oral Foundayo was added to major US formularies on 1 June, and its injectable Zepbound regains a foothold in October. Novo Nordisk’s oral Wegovy tablet, launched in early 2026, boasts a gross margin above 80%, but the company’s one-year formulary head start has now evaporated. The data from New Orleans will be decisive: strong CagriSema results could restore faith in Novo’s ability to fend off Lilly with a broader product portfolio, while weaker numbers would intensify the pressure on a stock already trading at a discount. Every data point counts between now and the FDA verdict.