Novo Nordisk will shorten its name and change its logo. Will this help revitalize the business?

On September 14, Danish pharmaceutical giant Novo Nordisk announced a rebranding and a shortening of its name to “Novo” for everyday use. The company also plans to revamp its corporate culture as it works to regain market share in the obesity treatment segment, according to CNBC.

In U.S. pre-market trading on Monday, Novo shares are up 0.8%, while on the Copenhagen Stock Exchange, they are up nearly 2%.

Novo has announced a major rebranding campaign centered around the slogan “Lasting Health Starts Now.” As part of this initiative, the pharmaceutical company will shorten its name for everyday use to Novo (this name will be used in press releases, advertising, media, and on the website), change its logo by rotating the iconic bull to the right, and adopt four new principles of corporate culture: among them—“customer and patient focus”; “competitiveness”; “clarity through well-defined priorities,” and “care and honesty toward employees and patients.” The company expects all of this to help strengthen its position in the highly competitive market for obesity drugs—a field that Novo itself once pioneered and is now trying to reclaim market share from its main competitor, Eli Lilly, according to Bloomberg.

Company executives explained that the marketing strategy is designed to strengthen consumer trust in the brand and its relevance, as well as to bring cutting-edge scientific developments closer to people's everyday lives.

Novo Nordisk will remain the company’s official legal name. This historic name dates back to the 1989 merger of two competing Danish pharmaceutical companies—Novo Terapeutisk Laboratorium and Nordisk Insulinlaboratorium. The company plans to provide details about its new business strategy during its Capital Markets Day event on September 21.

Bloomberg notes that this strategy is not new among pharmaceutical companies: Novo’s main competitor in the weight-loss drug market—Eli Lilly—is also increasingly switching to the name “Lilly,” removing “Eli” from its marketing materials.

Novo is seeking to revamp its business to compete with Lilly, as well as in the face of pressure from shareholders who are expecting new blockbuster drugs and a clear long-term growth plan, according to CNBC.

Since the beginning of the year, Novo’s stock has fallen by about 16% in the U.S., despite the successful launch of the tablet form of the weight-loss drug Wegovy, for which prescriptions had exceeded 3 million as of June. Previously, it was available only as an injection. Nevertheless, in the second quarter, Novo held only 38.8% of the weight-loss market, compared with 60.9% for Lilly.

In addition, the Danish company’s stock price was affected in late July by news that Novo had halted three clinical trials of an experimental drug for the treatment of cardiovascular diseases. On Wall Street, this sector is becoming one of the most challenging areas for generating profits, according to The Wall Street Journal: further development of heart medications is becoming increasingly difficult and expensive, the newspaper noted.

“The new name, logo, and slogan must be accompanied by real strategic changes,” Bloomberg quotes a note from BMO Capital Markets analyst Evan David Zeigermann as saying. Explanations at next week’s Capital Markets Day “should provide specifics and set a strategic direction for building a sustainable structure for [Novo] throughout the 2030s and beyond,” he added.

On September 11, Morgan Stanley downgraded its rating on Novo Nordisk shares traded in the U.S. from “hold” to “sell.” The target price is $40, which implies a 7% decline from the most recent closing price.

16 out of 24 analysts covering Novo's securities advise holding them. Four recommend buying, and another four recommend selling.

This article was AI-translated and verified by a human editor