Novo Nordisk Braces for London Showdown as Morgan Stanley Turns Bearish on Semaglutide Dependence

Morgan Stanley cut Novo Nordisk to Underweight, trimming its target to DKK 250, as semaglutide patent-cliff worries mount before the 21 September capital markets day.

Novo Nordisk has summoned its workforce to a townhall meeting to discuss what it calls the company's "next chapter" — a gathering scheduled just days before its capital markets day on 21 September in London. The timing hardly looks coincidental.

Morgan Stanley Sounds the Alarm

Morgan Stanley downgraded the Danish drugmaker's shares from Equalweight to Underweight on Friday, with analyst Thibault Boutherin citing a subdued medium-term growth outlook and mounting concern over the eventual loss of patent protection on semaglutide. The bank also trimmed its price target to 250 Danish kroner.

The market's response was swift: the stock fell 2.6% on Friday, closing at EUR 37.05 — a fresh low in a slump that has now erased 7.6% over seven trading sessions.

At the heart of the bear case lies Novo Nordisk's extraordinary reliance on a single molecule. Semaglutide — the active ingredient behind Ozempic and Wegovy — is expected to account for roughly 75% of group revenue in 2026. Patent protection expires in Europe and the US in the early-to-mid 2030s, and Morgan Stanley's models show the drug still generating 59% of sales as late as 2031, when the first effects of exclusivity loss begin to bite. The bank considers that concentration risk too steep for the current valuation.

Growth projections reinforce the caution. Morgan Stanley forecasts revenue and EBIT growth of just 2% to 3% for 2027, followed by an annual rate of 4% for both metrics between 2027 and 2030 — well short of the 4% sales and 7% EBIT growth the analyst expects from the broader European pharmaceutical sector.

Prescription Data and Doctor Surveys Add Pressure

A proprietary survey of 200 US primary care physicians, combined with current prescription trends, points to Novo Nordisk ceding market share over the next 18 months to Eli Lilly's Zepbound, Mounjaro and Foundayo — and, from 2027 onward, to the rival candidate retatrutide. Momentum for the Wegovy pill has faded after a strong first half of 2026, while Zepbound has reportedly captured the bulk of Medicare patients since the launch of the so-called Bridge programme.

The oral obesity franchise centred on the Wegovy tablet is projected by Morgan Stanley to reach USD 10 billion in revenue by 2031. That is a substantial figure, yet the bank judges it insufficient to offset pricing pressure and intensifying competition.

Adding to the gloom, results from the discontinued Ziltivekimab trials last Wednesday landed as an extra drag, even if the analyst action dominated the day's narrative. Since Novo Nordisk halted the Phase 3 HERMES and ATHENA investigations, the shares have shed 3.4%; the German launch of the Wegovy tablet roughly a week ago provided no counterweight, with a 7.6% decline logged since.

Buybacks Continue, HSBC Strikes a Different Tone

Not every voice on the Street shares the pessimism. HSBC raised its price target to 320 Danish kroner from 300 — a clear counterpoint to Morgan Stanley's scepticism, and a sign of how differently the long-term pipeline is being valued. Morgan Stanley views the risk-reward balance unfavourably; HSBC still sees moderate upside.

Meanwhile, Novo Nordisk's share buyback programme keeps running in the background. As of 4 September, the company had repurchased approximately 32 million B shares at an average price of 281.63 Danish kroner since early February, representing a transaction volume of around DKK 9 billion within a twelve-month DKK 15 billion framework. The repurchases have yet to visibly support the share price, though they signal that management regards the stock as undervalued even as analysts grow more cautious.

The 21 September Test

The real inflection point is likely to arrive at the capital markets day in London. Management is expected to lay out how it intends to reduce dependence on semaglutide and strengthen the pipeline beyond diabetes and obesity.

On full-year 2026 guidance, Novo Nordisk has indicated growth in adjusted revenue and adjusted operating profit of 0% to minus 6% at constant exchange rates — a range that leaves little room for positive surprises. Investors will scrutinise the London event for concrete answers to patent-cliff concerns; anything less risks deepening the scepticism that has already taken hold. With the stock's RSI at 34.1, the shares sit in oversold territory — a signal that unease among investors is already well advanced.