Novo Nordisk's Semaglutide Story Cuts Both Ways Ahead of London Strategy Day

Morgan Stanley cut Novo Nordisk to Underweight on patent-cliff worries, while semaglutide gained in paediatric obesity, Germany and China.

Novo Nordisk has spent the past few weeks proving that the same molecule can open doors and close them. On the one hand, semaglutide — the engine behind Ozempic and Wegovy — just widened its reach into two new territories: paediatric obesity and Chinese liver disease. On the other, the company's attempts to branch beyond its metabolic franchise hit a wall, and Wall Street's most influential voices are now openly debating how much the Danish drugmaker's future is riding on a single patent.

The stock closed Friday at EUR 37.05, down 2.6% on the day, capping a week that saw it shed 7.6%. Year-to-date the shares have lost 16%, and they now sit roughly 32% below their 52-week high of EUR 54.86 reached on 23 January. The gap to the 52-week low touched in early March stands at 22%. Over a full twelve months, the decline amounts to a fifth of the company's value.

A Downgrade That Reframed the Debate

The proximate trigger for the latest leg down was Morgan Stanley's decision on 11 September to cut the stock to "Underweight" from "Equal-weight," attaching a fresh price target of DKK 250. The bank's argument rests on the so-called patent cliff facing semaglutide. The compound currently accounts for about 75% of revenue projected for 2026, but Morgan Stanley's models see that share shrinking to 59% by 2031, when patent protection lapses in the early part of the decade. The oral obesity business, which the bank expects to grow to USD 10 billion by 2031, won't be enough to plug the hole.

For 2027, Morgan Stanley forecasts revenue and earnings growth of just 2% to 3% — well short of what the broader European pharmaceutical sector is expected to deliver. A survey of 200 US primary care physicians, commissioned by the bank, points to share losses to Eli Lilly's rival products Zepbound, Mounjaro and Foundayo. Growth of the Wegovy pill slowed noticeably after a strong first half of 2026, and Zepbound has captured the bulk of Medicare patients since the launch of its Bridge programme.

Not everyone is bearish. HSBC raised its target to DKK 320 on 9 September, leaving a wide gulf between the two camps that the market is currently resolving in favour of the sceptics.

Pipeline Setback Adds to the Growth Worries

Disappointment in the research labs has compounded the revenue concerns. Last Wednesday, Novo Nordisk halted two Phase 3 trials of ziltivekimab — HERMES and ATHENA — after an independent data monitoring committee saw little chance of a result different from the failed ZEUS programme. A third cardiovascular study in the same programme continues, with readouts expected in the first half of 2027. The stock has lost about 3.4% since the announcement. Management says the decision has no bearing on its 2026 earnings guidance, though a non-cash impairment will be booked in the third quarter.

The setback stings because ziltivekimab was meant to open growth avenues beyond the core diabetes and obesity business.

Wins in Paediatrics, Germany and China

Against that backdrop, the positive news has been easy to overlook. A Phase 3 trial in children aged six to under twelve met its primary endpoint: after 68 weeks, 40.4% of those treated with semaglutide plus lifestyle changes were no longer classified as obese, while the placebo group remained unchanged at zero. Full details are due at ObesityWeek in Washington in November. The data extend the blockbuster drug into an age group that has so far been barely served.

Commercial expansion is proceeding in parallel. Novo Nordisk launched the Wegovy tablet in Germany in early September, according to a company spokesperson who confirmed the move to Reuters. The oral version is aimed at patients who shy away from injections and is intended to blunt competition from rival oral products.

Asia delivered a further opening: Wegovy won approval in China for the treatment of MASH, an advanced form of fatty liver disease, making it the first GLP-1 agent cleared for that indication there. Novo Nordisk framed the decision as an extension of Wegovy's evidence base — from weight management and cardiovascular health to liver function. China is viewed as a major growth driver for obesity and metabolic medicines, so the regulatory milestone matters for the group's long-term positioning.

Buybacks Continue as Investors Eye 21 September

Shareholder returns have carried on regardless. By early September the company had repurchased just over 32 million B shares at an average price of DKK 281.63, for a total of roughly DKK 9 billion.

The technical picture remains weak. With a relative strength index of 34.1, the stock is approaching oversold territory, and it trades below both its 50-day and 200-day moving averages.

Attention now turns to London, where Novo Nordisk holds a capital markets day on 21 September. The company had already convened an employee meeting on the Tuesday to discuss what it called the "next chapter" — language that hints at a strategic reset. After that internal exchange, observers expect the London event to deliver more concrete answers on how management intends to cushion the looming patent cliff and counter mounting pressure from Eli Lilly. Until then, the shares remain caught between HSBC's optimism and Morgan Stanley's caution, in a market that has yet to decide which story to believe.