Novo Nordisk's European shares plunged 18%, CEO admits: Facing "unprecedented pricing pressure" in 2026

Denmark’s pharmaceutical giant Novo Nordisk is facing its most severe performance challenge in nearly a decade, with the company forecasting a significant decline in sales in 2026 as market competition intensifies. On February 4, CEO Mike Doustdar stated bluntly, "The company will face unprecedented pricing pressure in 2026," and that the price cuts for their blockbuster weight-loss drug Wegovy in the U.S. will bring "painful" financial impacts, though the move is aimed at gaining wider market coverage and long-term growth. Previously, Novo Nordisk’s 2026 earnings outlook was far below market expectations, with projected full-year sales at fixed exchange rates expected to fall by 5% to 13%, much more than analysts’ anticipated drop of about 1.4%. The bleak guidance triggered significant stock volatility; after the earnings announcement, Novo Nordisk’s U.S. ADR trading on the NYSE was briefly halted. After trading resumed, by midday, shares had dropped over 10%, closing down 14.6%. Negative sentiment continued after hours in the European market, with Novo Nordisk shares in Europe tumbling 18%. To stabilize market confidence, Novo Nordisk announced a new round of share buybacks, with plans to repurchase up to DKK 3.8 billion worth of shares from February 4 to May 4. Additionally, a new buyback plan totaling DKK 15 billion was unveiled, aiming to reassure investors of the company’s long-term value. Multiple pressures erode revenue outlook Novo Nordisk’s 2026 guidance reflects expected sales growth internationally and anticipated sales decline in the U.S. While the global GLP-1 market is expected to keep expanding, this will be offset by lower actual selling prices. One major source of pressure comes from the "most favored nation pricing" policy pushed by U.S. President Trump. This initiative seeks to allow more Americans to access GLP-1 drugs at lower prices, but will significantly lower Novo Nordisk’s real selling prices. Additionally, the expiry of semaglutide patents in several international markets will also deal a substantial blow to revenues. In the U.S. market, Novo Nordisk’s line of GLP-1 injectable products is facing dual pressure from shifting prescription trends and heightened competition. Their flagship products Ozempic and Wegovy are being strongly challenged by competitors like Eli Lilly’s Zepbound. The negative impact of reduced Medicaid coverage for obesity drugs in the U.S. has further increased the pressure. Novo Nordisk expects its adjusted sales growth in Danish kroner to be three percentage points lower than at fixed exchange rates, mainly due to the depreciation of the U.S. dollar against the Danish krone. This would mark the company’s first annual sales decline in nine years, the last being in 2017 when there was a price war in the U.S. insulin market. Oral Wegovy boosts confidence Despite the tough challenges, Novo Nordisk still has some bright spots. On December 22, 2024, the U.S. Food and Drug Administration approved the first oral GLP-1 drug for obesity treatment — a once-daily 25mg oral semaglutide, marketed as Wegovy tablets. The drug was launched on January 5, 2026, and as of January 23, weekly total prescriptions were about 50,000. Doustdar stated that among the 170,000 people taking Wegovy tablets, almost all are new patients, and the company is very encouraged by the early uptake in the U.S. market. Doustdar emphasized, "The company is very confident in its ability to meet demand for Wegovy tablets and remains confident about driving sales growth in the coming years." According to Bloomberg Intelligence analyst Michael Shah, citing Symphony Health data, this performance appears better than Eli Lilly’s Zepbound at its initial launch. Novo Nordisk plans to continue launching Wegovy in more markets in 2026, and introduce a 7.2mg dose in several countries. The company remains focused on expanding Wegovy’s accessibility, particularly via NovoCare Pharmacy in out-of-pocket channels and through telemedicine cooperation. 2025 performance slightly beats expectations Novo Nordisk’s reported results for full-year 2025 show sales rising 6% to DKK 309.06 billion, with growth of 10% at fixed exchange rates, slightly above analysts’ forecast of DKK 307.62 billion. This growth was mainly driven by obesity care, with segment revenues up 31% at constant exchange rates, while GLP-1 diabetes drug sales rose 6%. Operating profit was DKK 127.66 billion, down 0.5% year-on-year, but up 6% at constant exchange rates. Net profit increased by 1.4% to DKK 102.43 billion. Excluding roughly DKK 8 billion in transformation costs, operating profit would have risen by 6%, and up 13% at constant exchange rates. Fourth quarter results show sales of DKK 79.14 billion, down 7.6% year-on-year, but exceeding the analyst estimate of DKK 76.9 billion. Wegovy sales reached DKK 21.86 billion, above expectations of DKK 21.07 billion. Ozempic’s full-year sales totaled DKK 127.09 billion, beating analysts’ forecast of DKK 124.87 billion. U.S. sales grew by 8% at constant exchange rates, and international sales rose 14%. Total sales for obesity and diabetes care was DKK 289.46 billion, while rare disease sales were up 9%. The company provided innovative treatments to 46 million patients in 2025. Shareholder returns In addition to buying back up to DKK 3.8 billion in shares between February 4 and May 4, Novo Nordisk’s board also decided to launch a new buyback program for up to DKK 15 billion (about US$2.4 billion). The board will also propose a final dividend of DKK 7.95 per share for the annual shareholders’ meeting on March 26, 2026, bringing the total expected dividend for 2025 to DKK 11.70 per share. Doustdar acknowledged that 2025 was a challenging year for the company, but stressed that despite pricing pressure and growing competition in 2026, Novo Nordisk remains confident in driving sales growth over the next few years. The company also looks forward to regulatory decisions on its next-generation therapies in 2026, including Mim8 for hemophilia and CagriSema for obesity. Risk Warning and Disclaimer The market involves risk, and investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account any individual user's specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their circumstances. Investing based on this information is at the user’s own risk.