Novo Nordisk's Subscription Gamble Meets a Formidable New Rival

Novo Nordisk shares fall 50% from highs as Eli Lilly's oral GLP-1 pill challenges Wegovy. The firm launches a controversial subscription model while restructuring operations.

Novo Nordisk's shares are trading near 34 euros, a stark 50% decline from their 52-week high of 70.13 euros. This slump, which includes a roughly 20% drop year-to-date, underscores the mounting pressures on the Danish pharmaceutical giant. The company is navigating a dual challenge: launching a controversial new subscription model for its weight-loss drug Wegovy while fending off a direct competitive assault from Eli Lilly.

The competitive landscape shifted decisively in April with Eli Lilly's U.S. launch of Foundayo (orforglipron), an oral GLP-1 pill. This ended Novo's brief monopoly in the oral segment of the lucrative market. Novo has countered with comparative data, arguing its oral Wegovy pill demonstrates superior efficacy. An indirect study comparison shows Wegovy achieved 13.6% weight loss over 64 weeks, outperforming orforglipron's 11.2% over 72 weeks. Novo also highlights a significant disparity in treatment discontinuations due to side effects, which occurred approximately 14 times more frequently with Lilly's drug.

Beyond the data, Novo points to its established safety profile, as the active ingredient in its oral pill is identical to its long-marketed injectable version. However, analysts note Foundayo holds a practical advantage: it can be taken without food restrictions, unlike Novo's oral version which requires administration on an empty stomach with minimal water at least 30 minutes before breakfast.

Amid this intensifying rivalry, Novo Nordisk rolled out a subscription program for Wegovy on March 31, aimed at making the treatment more affordable for self-paying patients. The monthly cost through telehealth partners like Ro or WeightWatchers ranges from $249 to $329, with annual commitments saving up to $1,200. Yet the initiative has drawn criticism from medical professionals. While acknowledging improved access for the uninsured, experts like Dr. Marsha Novick of the Obesity Society argue the price remains prohibitive for many. She also warns that bypassing primary care physicians fragments patient care, potentially omitting crucial lifestyle counseling or alternative treatment options.

Internally, Novo continues a significant operational restructuring. Following workforce reductions of about 10% in 2025, CEO Mike Doustdar has overseen the hiring of roughly 2,000 new employees, with 1,400 already onboard. The total headcount remains stable at approximately 69,500, aided by natural annual attrition of around 5%. The new hires are focused on production, research, and commercial functions. This reshuffle has not been without cost, however, as the company lost key scientific talent including Lotte Bjerre Knudsen, a pivotal figure in GLP-1 therapy development.

Financially, the company's outlook remains cautious. Management forecasts an adjusted operating profit decline of 5% to 13% for 2026. A potential catalyst on the horizon is the expected Medicare coverage for obesity medications starting mid-2026. In the meantime, Novo is executing a share buyback program of up to 15 billion Danish kronor. By April 10, the company had repurchased about 11 million B shares at an average price of 257.56 DKK, totaling nearly 2.84 billion DKK in value.

The stock's Relative Strength Index (RSI) sits at 24.6, signaling deeply oversold conditions. All eyes are now on the first-quarter results due in May. These figures will reveal if the steep share price decline has fully accounted for the company's lowered guidance, or if further downside awaits. The key variable for investors will be the early prescription traction of Eli Lilly's Foundayo against the over 600,000 U.S. patients who have started treatment with Novo's oral Wegovy pill since its January launch.