Novo Nordisk Hands Monthly Semaglutide Rights Back to Ascendis as Morgan Stanley Turns Cautious

Novo and Ascendis scrap their semaglutide licensing deal, returning monthly-dose rights to Ascendis as Novo shares slip and Morgan Stanley downgrades.

Novo Nordisk and its Danish biotech partner Ascendis Pharma have scrapped the licensing deal that had tied them together since November 2024, returning full rights to a once-monthly formulation of semaglutide to Ascendis. The agreement had leaned on Ascendis' TransCon technology to build metabolic-disease candidates with controlled drug release, and Ascendis now intends to push the diabetes and weight-loss therapies forward on its own.

The Danish drugmaker's shares slipped 2.1% to EUR 36.94 on the news, stretching their year-to-date decline to 16%.

For Novo, the split marks a detour in its pursuit of ultra-long-acting obesity treatments. The company still wants long-duration options in its arsenal, but it must now scout fresh routes to get there. Market watchers flagged a separate question hanging over the field: how much real demand exists among patients and prescribers for a therapy dosed just once a month.

A pipeline reset lands mid-rebrand

The unwinding of the partnership arrives while Novo is deep in a corporate makeover. Since 14 September the group has traded under the "Novo" brand, though its legal name remains Novo Nordisk A/S. Chief executive Mike Doustdar has rolled out a strategic overhaul dubbed "The Novo Way" before staff, built around sharper customer focus, competitiveness, clarity and care.

Behind the reshuffle lies intensifying competition in the obesity market, where US rival Eli Lilly keeps turning up the heat. Transformation costs for the 2025 financial year came to roughly DKK 8 billion.

Paediatric data bolster the semaglutide case

On the clinical front, Novo is working hard to widen the label for semaglutide, its flagship molecule. On 7 September the company reported positive late-stage results from the STEP Young trial in obese primary-school-aged children. Among participants treated with the drug, 40.4% brought their body weight below the obesity threshold, while not a single subject in the control group hit that mark.

The study therefore met its primary endpoint. According to the company, no new safety concerns emerged around growth or pubertal development, leaving the profile consistent with what has been seen in adults. Full data are due to be presented in mid-November at the ObesityWeek conference in Washington.

Morgan Stanley turns bearish on the patent cliff

Those clinical wins have not stopped some analysts from turning more guarded on the medium-term outlook. Last Friday Morgan Stanley downgraded the stock to "Underweight", citing muted growth expectations and the approaching patent expiries on the company's main product.

Semaglutide currently generates about three-quarters of group revenue and dominates the operating business. Morgan Stanley expects that share to fall to 59% by 2031, ahead of patent protection running out in the first half of the next decade. Through 2030, the analysts project annual growth of just 4%.

That looming hit forces management to open new business lines and broaden the existing product range. Investors will therefore be listening closely for how the company answers the patent cliff when it hosts a capital markets day in London on 21 September.

Buybacks keep propping up the equity story

Alongside the operational reset, Novo continues to lean on capital measures to support its valuation. Under the buyback programme launched in February, worth up to DKK 15 billion in total, the company had repurchased 33,084,179 of its own B shares by 11 September, spending roughly DKK 9.33 billion. The group now holds 1.1% of its share capital as treasury stock.

Steady repurchases shrink the free float and lift calculated earnings per share. They also signal the board's confidence in the balance sheet, even if such moves cannot by themselves resolve the structural growth questions in the core business.

European markets have given the stock little lift from the recent flow of announcements. In today's session the shares shed 1.3% to EUR 37.23, taking the year-to-date loss to 15%.