Novo Nordisk's Two-Front Battle: Defending the Oral GLP-1 Crown While a FDA Setback Rattles a Partner

Novo Nordisk starts Phase III oral Wegovy trial to fend off Lilly, but FDA action at Indiana plant and weak guidance cloud outlook.

The Danish pharma giant is waging a war on two fronts. On one side, it's shoring up its dominance in oral obesity treatments with fresh clinical ammunition. On the other, a regulatory black mark at a key US manufacturing site is complicating matters for a partner — and adding to a growing pile of operational headaches.

Novo Nordisk kicked off its Phase III OASIS-5 trial on Friday, testing two lower maintenance doses of its oral Wegovy pill (semaglutide) in 450 adults with obesity. The goal is straightforward: improve tolerability and offer greater dosing flexibility, giving physicians and patients more reasons to stick with the tablet rather than switching to a competitor's injectable. The study's primary completion is slated for April 2028.

That's a direct counterpunch aimed at Eli Lilly, which has been chipping away at Novo's lead in the broader GLP-1 arena. For now, the oral segment remains firmly in Novo's corner — the pill commands roughly 90% market share in oral obesity therapies, with more than five million prescriptions written to date.

Yet the company's own guidance tells a more cautious story. Management is sticking with its full-year forecast of 0% to minus 6% revenue growth at constant exchange rates — a striking disconnect from the commercial momentum, and a telltale sign that competitive pressure and operational frictions are weighing on the outlook.

A Manufacturing Setback With Ripple Effects

Just as the new trial got underway, a separate development highlighted the fragility in Novo's supply chain. Scholar Rock, a biotech partner, announced it had removed Novo Nordisk's Bloomington, Indiana, facility from its regulatory filing for apitegromab and simultaneously pulled its European marketing application for the drug.

The root cause: the FDA slapped the plant with an "Official Action Indicated" classification following an April inspection — a designation signaling that regulators found conditions warranting scrutiny. The facility, originally built by Catalent, was acquired by Novo Nordisk as part of its push to secure manufacturing capacity for its blockbuster obesity drugs.

This isn't an isolated incident. The operational strain has been showing up in the financials. In the second quarter, adjusted operating profit rose 11% at constant exchange rates to 33.39 billion Danish kroner. But reported operating income fell year-over-year to 27.06 billion kroner, dragged down by a non-cash impairment of 6.3 billion kroner tied to the pipeline candidate monlunabant.

Revenue, meanwhile, climbed 7% on an adjusted basis to 78.488 billion kroner, powered by a 16% jump in the obesity franchise. Earnings per share of 4.75 came in 5.65% below the analyst consensus of 5.0343 — a miss that underscores the gap between top-line growth and bottom-line delivery.

Stock Stuck in the Middle

The shares closed Friday at €39.98, up 1.0% on the day and 1.6% higher over seven sessions. But the longer-term picture is less flattering: the stock is down 5.1% over the past 30 days and has surrendered 9.2% since the start of the year. It now sits 27% below its 52-week high of €54.86, reached back in January — a gap that speaks volumes about the market's shifting sentiment toward the company's growth trajectory.

The technical picture offers little comfort. The shares trade roughly 3.9% below their 50-day moving average, though they remain about 32% above the 52-week trough of €30.25. With 30-day realized volatility running at 40%, this remains a stock that can move sharply in either direction.

Berenberg captured the prevailing mood on August 12, downgrading the shares from "Buy" to "Hold" and trimming its price target to $47, citing intensifying price competition and the increasingly crowded obesity market.

Buybacks and Institutional Crosscurrents

Management, for its part, is signaling confidence through action. The 15-billion-kroner buyback program launched in February is proceeding on schedule. Through August 14, Novo had repurchased just under 28.9 million B-shares at an average price of 279.80 kroner, for a total outlay of roughly 8.08 billion kroner. Between August 4 and 7 alone, the company snapped up an additional 820,000 B-shares for 228.8 million kroner.

Institutional positioning, however, tells a more mixed story. QV Investors boosted its stake by 28.5% in the second quarter to over 369,000 shares, a vote of selective confidence. But others have headed for the exits: Exchange Traded Concepts trimmed its position by 20.5%, and KMG Fiduciary Partners sold nearly a third of its holdings over the same period.

The Pipeline Race

Beyond OASIS-5, Novo is quietly advancing a next-generation candidate. On August 18, the company registered a Phase I first-in-human study for an undisclosed obesity drug, NNC0721-8060, with 142 participants and semaglutide serving as the active comparator arm. It's an early but telling sign that the company is looking beyond its current blockbuster toward the post-semaglutide era.

A newly minted partnership with Amazon Web Services, announced in August, could accelerate that work. AWS is now Novo's preferred global cloud and AI partner, with an innovation hub in London focused on drug discovery and clinical data analytics — infrastructure that may compress development timelines for candidates like NNC0721-8060.

The catch is time. OASIS-5 runs until 2028; NNC0721-8060 is still in Phase I. Neither program will move the revenue needle anytime soon. If Lilly secures additional approvals or pricing advantages in the interim, Novo risks ceding ground it may struggle to reclaim — precisely the scenario Berenberg flagged in its downgrade.

For now, the buyback provides a technical floor, and the clinical pipeline offers a credible defense of the oral GLP-1 franchise. But with manufacturing issues at acquired sites reverberating across partners like Scholar Rock, and the competitive clock ticking against Lilly, the next meaningful catalyst for the stock may well be early data from that Phase I study — the first real glimpse of whether Novo holds a viable successor to semaglutide.