Novo Nordisk Repurposes $1.3B Factory Into Warehouse While Zenagamtide Opens New Obesity Frontiers

Novo Nordisk abandons a $1.3B Odense plant for rare diseases, converting it to a warehouse as Wegovy and Ozempic dominate priorities. Clinical data shows progress, but stock has fallen 35% over 12 months.

Novo Nordisk has pulled the plug on a planned high-tech production facility for rare diseases in Odense, Denmark, converting the site into a basic warehouse instead. The move, which scraps an investment originally pegged at roughly $1.3 billion and 400 anticipated jobs, underscores how the company’s blockbuster obesity franchise—Wegovy and Ozempic—is crowding out every other priority. Management justified the shift as a “responsible capacity planning” exercise driven by shifting global demand.

The hard pivot comes as the Danish drugmaker navigates a landscape where GLP-1 dominance is both its biggest strength and its largest vulnerability. On one hand, clinical progress in the pipeline remains robust. Novo’s AMAZE program for zenagamtide is expanding, with the latest protocol update for AMAZE 6—linking obesity with knee osteoarthritis—dated May 13, 2026. AMAZE 1 and AMAZE 2 are already testing the drug over 84 weeks, while other studies examine its effect on sleep apnea, maintaining weight loss, and joint health. The goal is to position zenagamtide beyond simple weight reduction, targeting a much wider patient population that lives with both excess weight and musculoskeletal pain.

Meanwhile, Wegovy continues to generate headline-worthy data. At the European Obesity Congress in Istanbul, Novo presented results from the STEP-UP trial, where early responders lost an average of 27.7% of their body weight after 72 weeks on a weekly 7.2 mg dose—administered to 1,400 adults without type 2 diabetes. Company scientists emphasized that most of the loss came from fat mass, while muscle function was preserved and even improved. On the oral front, the phase 3 OASIS 4 study showed that nearly one-third of participants lost at least 10% of their weight by week 16, and that group averaged a 21.6% reduction by week 64. Novo compared the oral formulation favorably against Eli Lilly’s orforglipron, arguing that a pill could expand the market by attracting patients averse to injections.

Yet the financial picture remains mixed. According to two separate market reports, Novo Nordisk shares closed Friday at 38.56 euros (down 1.82%) and 38.51 euros respectively. On a 30-day view, the stock gained roughly 11–11.7%, but the longer-term trend is stark: the share price has fallen about 35% over the past twelve months (with one source pegging the decline at 34.93% and the other at 35%). The stock sits above its 50-day moving average but below the 200-day line, reflecting persistent investor wariness.

That caution is rooted in the numbers. Novo’s first-quarter 2026 results, released recently, showed headline revenue surging 24% to 96.8 billion Danish kroner—but the figure is distorted by a multi-billion Danish kroner non-cash reversal of provisions in the U.S. market. Stripping out that one-off, adjusted revenue shrank 4% in constant currencies. Nonetheless, management raised the full-year guidance, even as it expects adjusted revenue and operating profit to contract by 4% to 12% this year, also on a constant-currency basis.

Adding to the pressure, Dr. Reddy’s Laboratories has launched a generic semaglutide injection in Canada, marking the first generic challenge to Novo’s GLP-1 franchise. Rivals Eli Lilly, Pfizer, and Roche are also pushing their own pipelines. Analysts remain split; the average 12-month price target sits at $65.56 per share, with a consensus “Hold” rating, although a few buy recommendations have emerged.

The months ahead will test Novo’s balancing act. Production capacity in Denmark and the U.S. is being ramped up aggressively, while the oral Wegovy program needs to clear regulatory hurdles. Key catalysts include the FDA’s review of CagriSema, the European progress of Wegovy HD, and the first potential launches of the oral Wegovy pill outside the U.S. Novo is scheduled to report first-half 2026 earnings on August 5, an event that could either soothe or inflame investor sentiment. For now, the company is betting that a broader pipeline and a leaner production footprint will ultimately pay off—but the market is far from convinced.