Regulatory Boost for Novo Nordisk Amid Market Challenges

Novo Nordisk DK0062498333

A significant regulatory development offers a potential counterweight to a difficult period for Novo Nordisk in the equity markets. The European Medicines Agency (EMA) has issued a favorable opinion for a higher-dose version of Wegovy, which facilitates an average weight loss exceeding 20%. This advancement could help the Danish pharmaceutical firm solidify its standing in the competitive obesity drug sector, arriving at a moment marked by share price pressure, intense rivalry, and internal corporate restructuring.

On December 12, 2025, the EMA's Committee for Medicinal Products for Human Use (CHMP) adopted a positive stance on Wegovy 7.2 mg. This formulation is a more potent iteration of the already-approved semaglutid-based weight management therapy. The European Commission typically follows the CHMP's recommendations, with a final authorization decision anticipated in early 2026.

The assessment is grounded in data from the STEP-UP clinical program, notably a 72-week Phase 3b trial involving 1,407 adults with obesity but without diabetes. Key outcomes for the 7.2 mg dose, compared to the currently approved 2.4 mg version, include:

• An average reduction in body weight of 20.7%, versus 17.5% for the lower dose.
• Approximately one-third of trial participants shed 25% or more of their total weight.
• 84% of the lost mass was fat, while muscle function was preserved.
• The safety and tolerability profile was largely consistent with the 2.4 mg dose.

Company executive Ludovic Helfgott indicated that, subject to final EU approval, Wegovy 7.2 mg could be available as an additional treatment option early in the new year. Concurrently, Novo Nordisk has submitted an application to the EMA for a single-dose injection device tailored to the new formulation.

Navigating a Turbulent Market Environment

Share Price Under Pressure

Novo Nordisk's stock is currently grappling with the aftermath of previously inflated expectations and mounting headwinds. Since the start of the year, the share price has declined by nearly 50%, with a drop of almost 59% over the preceding twelve months. Shares closed at €42.84 on Friday, a stark contrast to the 52-week high of just over €104.

Multiple factors have contributed to this downturn:

• Disappointing clinical trial data, including underwhelming results for CagriSema in March 2025.
• Several reductions to profit guidance throughout 2025.
• Escalating competitive threats from Eli Lilly's rival therapy, Zepbound (tirzepatid).
• The growing use of pharmacy-compounded GLP-1 preparations in the United States.

Recent commentary from Bloomberg noted the stock is trading as if "the obesity drug hype never happened." Consequently, the EMA's positive opinion enters a climate where restoring confidence in the earnings potential of Novo Nordisk's pipeline is crucial.

Internal Restructuring Efforts

Parallel to operational developments, the company's structure is undergoing notable changes:

• Leadership Transition: Mike Doustdar succeeded Lars Fruergaard Jørgensen as Chief Executive Officer in August 2025.
• Board Reshuffle: A major restructuring of the Supervisory Board occurred in November, bringing back former CEO Lars Rebien Sørensen as Chairman.
• Cost-Cutting Initiative: A global program aims to eliminate roughly 9,000 positions, targeting annual savings of approximately 8 billion Danish kroner by the end of 2026.
• Strategic Acquisition: On December 9, 2025, the company finalized the $4.7 billion purchase of Akero Therapeutics, securing the MASH drug candidate efruxifermin (EFX).
• Missed Opportunity: A bid to acquire obesity specialist Metsera failed in November, with Pfizer prevailing in the auction process.

These moves signal a strategy to diversify the product portfolio, adjust the cost base, and strengthen positions in new therapeutic areas, albeit with short-term impacts on profitability.

The Global Race for Approval

Novo Nordisk is pursuing authorization for the higher-dose treatment across several key markets simultaneously:

• United States: A submission was made in November 2025 under an accelerated review pathway. A decision from the U.S. Food and Drug Administration (FDA) is expected within one to two months of the application's formal acceptance.
• United Kingdom: The regulatory dossier is currently under review.
• Additional Regions: Several other marketing applications are pending.

This global push is designed to enhance the semaglutid product family worldwide and improve the company's competitive positioning in the race for leadership in obesity therapeutics.

Competition and External Validation

The GLP-1 Arena Intensifies

The core challenge for Novo Nordisk is defending its strong position in the GLP-1 segment against Eli Lilly. Zepbound has captured meaningful market share in recent quarters, particularly within the U.S. While Novo Nordisk maintained approximately a 68% volume share in international GLP-1 markets based on Q3 2025 figures, competitive dynamics in the U.S. are notably tense.

Further pressure stems from the proliferation of compounded GLP-1 versions in the U.S., with management estimating over one million patients now using such preparations. A bipartisan bill introduced in the U.S. Congress on December 11, 2025, seeks to restrict certain practices of these compounding pharmacies—a potential medium-term relief for Novo Nordisk if enacted.

WHO Recommendation Provides Tailwind

The entire drug class recently received supportive validation from the World Health Organization (WHO). In early December 2025, the WHO issued a conditional recommendation for GLP-1 medications in obesity treatment. While emphasizing that drugs alone cannot solve the global obesity crisis, the organization stated they could help millions better manage their weight. This provides additional legitimacy for the broader use of semaglutid-based therapies.

Forward Look: Key Upcoming Milestones

Several near-term events and decisions will be critical for Novo Nordisk:

• U.S. Decision on Wegovy 7.2 mg: An FDA ruling is anticipated one to two months after formal application acceptance.
• EU Authorization: The European Commission's decision on the higher dose is expected in early 2026.
• Full-Year 2025 Results: Scheduled for release in February 2026, these figures will clarify the actual impact of restructuring, competition, and pricing pressure on margins.

For the current year, management forecasts—at constant exchange rates—sales growth of 8-11% and operating profit growth of 4-7%. Restructuring costs of around 8 billion DKK are a significant burden. Free cash flow is projected to be between 20 and 30 billion DKK. From 2026 onward, the company anticipates initial negative effects from expiring semaglutid patents in certain international markets, likely trimming the global sales growth trajectory by a few percentage points.

In summary, the EMA's positive assessment for Wegovy 7.2 mg represents a strategic component in efforts to reinforce the obesity business and compete effectively with Eli Lilly. The immediate regulatory outcomes, successful execution of the cost-reduction program, and the ability to demonstrate profitable growth under new leadership will now be pivotal for investor sentiment.