The Novo Nordisk case: how the creator of Ozempic lost leadership in the market it created

Over the past year - from July 2024 to August 2025 - Novo Nordisk's stock, has lost nearly 70% in value. That's a fantastic collapse for a company that makes sought-after diabetes and weight-loss drugs  and is showing good revenue and profit growth. What happened to Novo Nordisk and how much of this investor reaction is justified?

Danish company Novo Nordisk, which has been around since 1923, came to stardom in June 2021 when the company received approval and brought its revolutionary weight loss drug Wegovy to market.  Prior to that, the company, which specializes in the development of diabetes drugs, produced the drug Ozempic.

Both are based on the drug semaglutide, which is called a glucagon-like peptide-1 (GLP-1) receptor agonist. To put it simply, the drug is responsible for the production of hormones in the small intestine, and those stimulate insulin and so allow the treatment of type 2 diabetes. At the same time, it was found that semaglutide also reduces appetite, helping to lose weight and fight obesity.

Investors saw Novo Nordisk's new drug as the only solution to a known global problem. The number of people with obesity, a chronic metabolic disease, will rise to 1.13 billion by 2030, says the World Obesity Atlas. In 2022, more than 2.5 billion people will be overweight according to the WHO. And in the U.S., for example, the proportion of obese adults in the U.S. is 38.4 percent among men and 41.3 percent among women.

As a result, Novo Nordisk's stock soared like a rocket into space: from $40 after Wegovy's June 2021 release to $144 by June 2024, a nearly fourfold increase. The company's revenue in 2022 increased by 18%, and in 2023 by nearly 35% to $33.72 billion. And of course, the U.S. has become a key market for Novo Nordisk - 70% of Ozempic and 78% of Wegovy are sold there, according to 2024 data. And that's despite the fact that both of these drugs bring Novo Nordisk 61.5% of all sales.

The fame of the pioneer was short-lived. In November 2023, American pharmaceutical company Eli Lilly began selling its weight loss drug Zepbound. Eli Lilly, founded by Civil War veteran Eli Lilly in 1876, has always been a direct competitor to Novo Nordisk. For example, it is known for being the first to commercialize insulin production in 1923.

Its obesity drug Zepbound is based on the drug tirzepatide. It is also a GLP-1 agonist, but at the same time it also affects the so-called glucose-dependent insulinotropic polypeptide (GIP). Simply put, this is a hormone produced in the duodenum, whose main function is also to produce insulin. In other words, tirzepatide acts on two hormones, whereas semaglutide acts on one.

And because of this, tirzepatide may be more effective. Here are examples of studies of both Wegovy and Zepbound. They were conducted a year apart with different dosage levels and numbers of participants and, interestingly, timing of administration. And the average reduction in body weight in both cases was about 15%. But for Zepbound at maximum dosages, the weight loss was as high as 20.9%. Meanwhile, for Wegovy at maximum doses, it was up to 15%.

While not a clean experiment, that hasn't stopped Eli Lilly from aggressively marketing this sort of proven advantage in its home market. 

If one were to try to briefly answer the question of why Novo Nordisk stock collapsed, the key issue is counterfeits and substitutes. The company was caught in a perfect storm. First, when the hype around the drug began, demand outstripped supply. Novo Nordisk in its calls with analysts had to answer how they were working to eliminate the shortage.

Second, the prices of Zepbound and Wegovy are high for most Americans. They cost, even with all the discounts, coupons and coupons, about $900 a month, according to a comparative analysis of SingleCare's medical discount card service. Meanwhile, base expenses without insurance are between $1,528 (Zepbound) and $1,821 (Wegovy) per month, according to SingleCare's estimate. Although both of these drugs are included in some Medicaid plans in about 20 states. 

Thirdly, due to high prices and shortages, there has been a demand for cheaper drugs that are made in a so-called compaund (compaund) way. We are talking about "compounded semaglutide". Pharmacies dilute it themselves from semaglutide powder, which is supplied in bulk mainly from China;

While Novo Nordisk produces the drug biologically, the Chinese companies produce it synthetically, with the possible presence of impurities. This can be read in an extensive report by the Brookings Institution. 

The system works like this: semaglutide powder is shipped to the United States. Pharmacies, which have no ban on advertising weight loss drugs, as well as no ban on creating prescription drugs, using telemedicine services and thus obtaining prescriptions, can dilute individual preparations from this powder;

This has led to millions of people using such compounded semaglutide, writes the Brookings Institution. What's Novo Nordisk doing about it? Filing lawsuits in court. In all, the company filed 132 lawsuits in federal courts in 40 states.  

Access to medicines in the United States is regulated by the Food and Drug Administration (FDA). Under US law, analogs of drugs can be produced in the country if they are in short supply. In early 2025, the FDA announced an end to the shortage, which means a ban on making copies of drugs based on semaglutide and tirzepaitide (which is the active ingredient in Eli Lilly's weight-loss hits). Compounders - that is, those who independently mixed the drugs with these active ingredients - tried to challenge the ban, but the court refused to side with them.

Novo Nordisk claims that their semaglutide continues to be used illegally, "Despite the expiration of the FDA's grace period for mass drug manufacturing on May 22, 2025, Novo Nordisk's market research shows that unsafe and illegal mass drug manufacturing continues, and that multiple entities continue to promote and sell finished GLP-1 drugs under the false pretense of 'personalization'."

So far, the FDA has not penalized any of the compounders. Novo Nordisk on Aug. 5 filed 14 more lawsuits against them. 

Researchers at Brookings Institution write that producing a weight loss drug in an artisanal way will be nearly impossible to stop. 

Investors realized the scale of the problem in July 2024. They benchmarked competitors like Eli Lilly against the Chinese powder pharmacy business and Novo Nordisk's own financial performance;

While the company finished Q4 2023 with revenue growth of more than 40% (annualized), in Q1 and Q2, the growth rate slowed by almost half -  to 22-23%. This, and all sorts of news about other companies developing GLP-1 agonist pills with GLP-1 agonists, led to the beginning of the collapse - the stock swung downward, losing 40% by the end of the year and dropping to $80.

Novo Nordisk's generally good results for 2024 did not help either. Revenue grew by 25% and net profit by 20%. But this did not stop investors who were betting on exponential growth of indicators. In fact, the U.S. market showed Novo Nordisk that the pioneer in the fight against obesity no longer has any advantages;

In 2025, Novo Nordisk continued to lower its revenue (projected to grow 8-14%) and year-end earnings forecasts, while changing its CEO. Investors staged another selloff and Novo Nordisk's securities are now at $47, just above where they were in June 2021 when the company brought Wegovy to market.

And what about its main competitor, Eli Lilly? Its stock has also fallen from its peak in mid-2024, down 20% to $766 a share. Eli Lilly's financials are much better. It demonstrated revenue growth of 32% to $45 billion in 2024. In Q1 2025, the company maintains a 45% growth rate.

There are several reasons for this. Besides the lower price (yes, they are lower in the U.S.) and active marketing, Eli Lilly offered direct sales through its LillyDirect division, which bundles telemedicine, prescriptions, and free shipping. In other words, it tried to knock prescription pharmacies with their Chinese powder out of the field.

Novo Nordisk did the same in March of this year, launching its direct-to-consumer sales platform NovoCare Pharmacy. It offers all doses of its weight-loss drug Wegovy to eligible patients, regardless of insurance.  Pricing starts at $499 per month. 

Novo Nordisk plans to double sales through this channel to beat compounders. It's also doing what Big Pharma has been pushing Donald Trump, who requested 17 major drugmakers to lower their prices by Sept. 29. As said the company's CFO Carsten Munk Knudsen on CNBC, Novo shares the same goal as Donald Trump: lower prices.

But despite all this, Novo Nordisk is losing out to Eli Lilly on analysts' recommendations. According to data from SeekingAlpha, a platform that collects Wall Street analysts' forecasts, Novo Nordisk may be worth keeping in the portfolio for now, but Eli Lilly - makes sense to actively buy. 

The story of Novo Nordisk's leadership in creating the first semaglutide-based drugs  - Ozempic and Wegovy - seems to be coming to an end altogether. The patent for this drug in China - which is one of the largest markets in terms of the number of overweight people   - will expire in 2026.

However, there are those who believe that Novo Nordisk is too early to discount;

For example, because the company, though lagging behind, is preparing novelty drugs with dual-action principles like Zepbound, and has also made a bid on the substance UBT251, a triple agonist of GLP-1, GIP and glucagon receptors. It's in early clinical development for the treatment of obesity and type 2 diabetes. And it has a pretty good track record: 15.1% weight loss in 12 weeks versus 24.2% in 48 weeks for Eli Lilly's similarly developed triple drug, retatrutide.

"The company has lost its first-mover advantage, but has retained the experience gained over its century-long history and has not lost its ambition to surpass Eli Lilly and continue to generate growing profits from weight-loss drugs," writes on SeekingAlpha 27-year-old Italian investor Eugenio Catone, hoping Novo Nordisk can repeat the success once again.

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