The pharma giant has almost doubled the size of its workforce over the last five years but is now looking to tighten cost controls amid challenges in the obesity-drug market.
As Novo Nordisk's sales of its blockbuster weight-loss drug Wegovy boomed, the Danish drugmaker raced to expand manufacturing capacity and sales outreach with a hiring spree that almost doubled staff numbers over five years.
In this article I'll use Charlie Munger's inversion model to analyze Novo Nordisk's potential failure points. We'll go over the recent market share loss, supply chain issues, their R&D pipeline, and the risk of brand damage. The diabetes and obesity market is very large with Novo Nordisk and Eli Lilly poised to control 94% of it, which leave a solid runway for growth for both.
Novo Nordisk has initiated a hiring freeze as it looks to control costs under new boss Maziar Mike Doustdar. All markets and departments, apart from business-critical roles, will be affected by the pause, the company said.
Novo Nordisk is a sector leader in the fast-growing GLP-1 market, boasting strong fundamentals, a healthy balance sheet, and solid management. Recent stock weakness stems from sector-wide regulatory fears, competitive pressures from Eli Lilly, and technical selling, not from deteriorating fundamentals. Novo's upcoming oral Wegovy could be a game-changer, offering first-mover advantage and superior efficacy, potentially reshaping the competitive landscape.
NVO rose about 4% on Aug. 18, 2025, after Wegovy won FDA approval as the first GLP-1 therapy for MASH, expanding its reach beyond obesity and diabetes. NVO-heavy ETFs like OZEM, THNR and PPH should benefit from this trend.
The string of negative updates from Novo Nordisk and positive news flow from the main competitor Eli Lilly has finally ended this month. Novo Nordisk faces near-term challenges from semaglutide compounders and Eli Lilly, but the recent FDA approval for MASH and international expansion offer new growth avenues. The company's pipeline, including CagriSema, high-dose semaglutide, and next-generation candidates, positions it well for a return on the stronger growth path.
Novo Nordisk A/S is facing an unprecedented crisis of confidence as the tumble in its valuations reached extremely fearful levels. Novo remains the global leader in diabetes and obesity drugs, with strategic U.S. manufacturing expansion. Novo's free cash flow margins could recover through 2027 as it expands its manufacturing to take on Lilly and peers.
Novo Nordisk A/S Q2 earnings were solid, but the guidance disappointed. My investment decision was based on a long-term outlook rather than this single quarter. Novo Nordisk's narrative shifted rapidly from crisis to opportunity due to underwhelming Eli Lilly trial results and Wegovy's new FDA approval for liver disease. NVO stock now trades at a deep discount, with valuation metrics at half their historical averages, despite maintaining strong revenue growth and innovation momentum.
Novo Nordisk A/S's FDA approval for Wegovy in MASH and aggressive Ozempic pricing boost its position, despite recent stock declines and competitive pressure from Eli Lilly and Company. Both NVO and LLY face regulatory headwinds from U.S. drug pricing demands, but I believe much of the bad news is already priced in for both. Novo's strategic pricing, strong clinical data, and attractive valuation make it my preferred long-term pick, though both stocks offer upside from current levels.
Cash-paying type 2 diabetes patients in the United States can now access Novo Nordisk's Ozempic for $499 per month through multiple pharmacy platforms.
Novo Nordisk surges as Wegovy secures FDA approval for MASH, marking a breakthrough in liver care and expanding its blockbuster reach.