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Introduction
This is another article from the new Collective Fire Framework initiave. Member Steven van der Burg is the main contributor to this article, but it has been reviewed by other members and myself and I have updated the valuation section where I believe it should be. The thorough reseach Steven did is unmatched. Give Steven a follow on Substack!
Novo Nordisk
Novo Nordisk began as a local insulin manufacturer but over the course of a century, has transformed into a global leader in diabetes and obesity treatments.
The numbers are staggering: its market cap exceeds Denmark’s GDP last year. It directly fuels the national economy and paid DKK 26 billion in taxes last year. Its impact is undeniable - accounting for nearly half of Denmark’s GDP growth in 2024 and driving 70% of the country’s exports.
The company’s roots are in the treatment of diabetes and today it produces over 50% of the world’s insulin supply.
Let’s dive into this amazing company!
How did it start?
Before the 1920s, a diabetes diagnosis was a death sentence. The human body, unable to process glucose, would succumb to the slow, destructive creep of high blood sugar. But everything changed in 1921. Canadian surgeon Frederick Banting had a hunch: if he could tie off the pancreatic ducts in dogs, maybe he could isolate the mysterious substance-insulin-that seemed to control blood sugar. John Macleod, a skeptical but supportive professor at the University of Toronto, provided lab space and paired Banting with Charles Best, a bright and eager medical student.
Banting and Best worked tirelessly, often through the night, struggling with crude equipment and countless setbacks. But their persistence paid off. By the summer of 1921, they had managed to extract insulin which they injected into a diabetic dog, restoring its health. The results were astonishing.
With help from biochemist James Collip, they refined the extract for human use, and in January 1922, they performed a medical miracle: a 14-year-old boy named Leonard Thompson, dying of diabetes, received an injection of insulin. He recovered almost instantly.
Across the Atlantic, Danish physiologist August Krogh saw hope for his diabetic wife. After visiting Toronto and obtaining permission to bring insulin extraction methods back to Europe, he partnered with Hans Christian Hagedorn to establish the Nordisk Insulin Laboratorium in 1923. This was the seed that would grow into Novo Nordisk, a global leader in the field of diabetes treatment.
In 1924, Crowe, Hagedorn, and Kongstead, who owns Lion Chemical, they all come to an agreement. They’re going to set up a new independent and self-owning institution to produce and distribute this insulin throughout Europe. They set it up as an operating company – Nordisk Insulin - which is 100 percent owned and controlled by a foundation that they also set up. The operating company is publicly traded. But still, that foundation controls 77% of the voting shares of Novo Nordisk and 28% of the economic shares.
The very first employees of the Insulin Project, even before Nordisk gets created, are two brothers, Harold and Torvald Petersen. But Hagendorn and Torvald couldn’t get along. Hagedorn thinks he’s in charge and Torvald – who’s just been hired – thinks he’s in charge. They are constantly fighting for 6 months, until one day they get into a huge argument and Hagendorn fires him. Harold, the older brother, resigns in solidarity and they’re super angry.
They started a new insulin company, Insulin Novo. And for the next 65 years, these two companies would compete head-to-head, absolutely hated each other, until they finally merged in 1989.
Around the merging, the industry starts researching on Glucagon-like-peptide-1 (GLP-1) receptor agonists as promising treatment. The problem is that GLP1 only stays active in your body for about five minutes before your body completely metabolizes it and breaks it down. So, in a normal healthy person, you’re just producing GLP1 all the time and it’s regulating your insulin production. In type 2 diabetes, that gets disrupted. You can’t just put more regular human GLP1 in the body, or it’s disappearing immediately.
A whole lot of people across the industry bang their heads against the wall. Nobody could figure out how to make this work. The industry and the academic research community pretty much abandons it as a drug candidate. Lotte Bjerre Knudsen jumps on it right after she started at Novo in 1989 - the same year the merger happened. She works for years on it, and she faces a lot of pressure inside and outside the company. And then finally, a few years later in the mid-nineties management gives her an ultimatum of 1 year.
So eventually she develops a GLP-1 analog from a molecule type called liraglutide that includes a fatty acid grafted onto the molecule that helps prevent the body from breaking it down. And this is the big breakthrough. Liraglutide ends up having a half-life in the human body of 13 hours compared to 2,5 minutes for straight up GLP-1. They start the clinical trial path first with animal trials for several year and subsequently many phases of human trials.
And that brings us to 2005, when the world’s first GLP-1 analog drug finally comes to market for the treatment of type 2 diabetes; Bayetta. But this does not come from Novo; it is launched by Eli Lilly! It will take 2 more years until 2007 before Novo’s GLP-1 agonist enters phase 3 human clinical trials, which ultimately leads to a market introduction in 2009, by the name Victoza.
Management – The Foundation and aligned incentives
Novo is a company that plays the long game. It’s been around for over 100 years and in that entire time, it’s only had five CEOs. The sixth CEO just started in the beginning of August 2025. That’s not just a statistic - it’s an outcome of a deep-rooted culture of promoting from within, valuing institutional knowledge, and building leadership that’s personally invested in the long-term success of the business.
Foundation
One of the more unusual features of Novo’s structure is its ownership: the Novo Nordisk Foundation owns just 28.1% of the shares, but controls 77.3% of the votes through a dual-share structure. At first glance, this might seem unfair to minority shareholders. But in practice, it acts as a stabilizing force. It shields the company from activist investors and hostile takeovers, allowing management to focus on long-term innovation and sustainable growth instead of chasing quarterly earnings targets.
Management
Previous CEO: Until August 2025, Lars Fruergaard Jørgensen (age 58) served as CEO. As a ‘Novo lifer’, he joined the company in 1991 and rose through the ranks. He became CEO in January 2017, succeeding Lars Rebien Sørensen. Jørgensen’s track record is marked by shepherding Novo through a boom in GLP-1 diabetes and obesity therapies – Novo’s sales, profits, and market cap surged under his tenure. He was named Financial Times Person of the Year 2023 for Novo’s industry leadership. However, after 34 years at Novo, he stepped down effective 7 August 2025 by mutual agreement with the board amid intensifying competition and a halving of Novo’s share price since mid-2024. The board explicitly cited ‘recent market challenges’ – principally the rivalry with Eli Lilly in obesity drugs – as a reason for the leadership change. Jørgensen will be remembered for expansive growth but also for what was termed a cautious culture at Novo that may have slowed its response to new competition.
New CEO: On 7 August 2025, Maziar “Mike” Doustdar (age 55) took over as President and CEO. Doustdar is a 33-year Novo Nordisk veteran who joined in 1992 as an office clerk and steadily advanced through international roles. He led Novo’s International Operations as Executive Vice President (EVP) since 2015, during which time non-US sales more than doubled to DKK 112 billion by 2024. As an Iranian-born Austrian – and as the first CEO without an ‘ø’ in his name – Doustdar grew up partly in the U.S., though his career was mainly abroad. His appointment – an internal promotion with unanimous board support – came after a comprehensive search including external candidates. Industry watchers were somewhat surprised Novo chose an insider given calls for a U.S.-savvy leader, but Lund praised Doustdar as an exceptional leader with a clear vision and a track record of driving growth through strong execution and team building. Doustdar’s deep institutional knowledge and demonstrated ability to scale operations will be critical as Novo navigates its ‘next growth phase’.
CFO: Karsten Munk Knudsen (age 53) has been CFO since 2018. He joined Novo in the 1990s and held numerous finance roles, including a stint as finance & IT VP in the U.S., before becoming CFO. Knudsen is highly regarded for financial discipline – under his stewardship Novo maintained robust profitability (operating margins at ca. 42–44% in recent years) and a stable dividend policy. He also plays a strategic role in capital allocation and has been candid in investor calls about challenges like U.S. pricing and compounded drugs. Knudsen’s international experience and steady hand have made him an effective and respected CFO. As of end-2024, he personally held approx.. 208,000 Novo shares (ca. DKK 73 million market value), reflecting his long tenure and aligning his interests with shareholders.
CCO: Novo Nordisk’s commercial strategy was long led by Camilla Sylvest (age 52) as EVP for Commercial Strategy & Corporate Affairs. Sylvest joined Novo in 1996 as a trainee and built a 28-year career across pricing, country management, and regional leadership roles. She spent seven years on Executive Management, often appearing with the CEO and CFO on earnings calls. Sylvest was instrumental in global launches of Ozempic/Wegovy and shaping Novo’s market access and corporate sustainability messaging. In April 2025, however, she stepped down from the company after a distinguished 28-year career, with no reason cited.
Her departure prompted a leadership reshuffle: Novo consolidated commercial strategy with its therapeutic portfolios under Ludovic Helfgott.
Helfgott, who joined Novo in 2019 from AstraZeneca, had successfully built Novo’s Rare Disease unit as EVP. With Sylvest’s exit, he assumed an expanded role as EVP for Product & Portfolio Strategy, overseeing global commercial strategy, medical affairs, and business development. Helfgott’s background (former AZ global VP for cardiovascular/metabolic) and fresh perspective make him a key figure in Novo’s growth plans. He is one of the few top executives hired externally, signaling Novo’s willingness to inject new ideas at the highest level.
COO: Novo Nordisk does not have a single-titled ‘COO’; operational leadership is distributed. First one to mention is Henrik Wulff (age 54), EVP for Product Supply, Quality & IT – essentially the global head of manufacturing and supply chain.
Wulff joined Novo in 1998 and has 27+ years at the company, including seven years on Executive Management. He has overseen massive production scale-ups (e.g. the $2 billion+ investments to expand facilities in Denmark, U.S., France, China, Brazil) to meet demand for GLP-1 drugs. Wulff’s logistics background and long experience ensure operational continuity and quality.
Additionally, Emil Kongshøj Larsen (EVP, International Operations) and David Moore (EVP, North America Operations) manage commercial operations in their regions, reporting to the CEO. This structure, while decentralized, has historically served Novo’s global reach well, though the new CEO Doustdar (himself former Int’l Ops chief) may adjust responsibilities.
Development: Martin Holst Lange, EVP for Development (now Chief Scientific Officer as of Aug 2025), leads R&D – critical for Novo’s future pipeline. A 20+ year Novo veteran (MD, PhD), Lange now unifies early research and late-stage development after a recent reorganization.
His elevation to CSO and the retirement of predecessor Marcus Schindler in 2025 reflect a drive to streamline innovation.
Capital Allocation
Effective capital allocation is a hallmark of Novo Nordisk’s management. Novo Nordisk has delivered exceptional returns on invested capital (ROIC). Over the last few years ROIC has ranged from 30% to 32%, exceeding its cost of capital. Such high ROIC reflects management’s disciplined investment in core businesses (diabetes, GLP-1, etc.) where Novo enjoys competitive advantages, and restraint in chasing low-return diversification.
Novo’s first priority is funding organic growth – notably R&D and manufacturing capacity. In 2024, facing unprecedented demand for its obesity and diabetes drugs, Novo deployed more than DKK 129 billion on capital expenditures and acquisitions to expand production and innovation capacity. This included acquiring three manufacturing (fill-finish) plants from Catalent and expanding sites in five countries. These moves, while costly up-front, address supply bottlenecks and should sustain long-term growth.
R&D spending has likewise remained robust; management continues to fund pipeline projects (like next-generation GLP-1 combos, oral therapies, and new rare disease drugs) to ensure future growth engines, rather than cutting back to boost near-term earnings.
Shareholder Returns
At the same time, Novo Nordisk consistently returns excess cash to shareholders through dividends and share buybacks – but importantly, does this within the bounds of attractive valuation and available free cash flow. The company has a stable dividend payout ratio around 50% of net profit, balancing income to shareholders with retained earnings for growth. Dividends per share have grown from DKK 4,18 in 2019 to DKK 11,40 for 2024 (a 21% CAGR), reflecting underlying earnings growth.
Beyond dividends, management uses share repurchases as a key allocation tool. From 2020 to 2024, Novo spent DKK 16–30 billion annually on buybacks, steadily reducing the share count. Shares outstanding dropped from 4.757 million to 4.463 million over 2019–2024, about a 5% cumulative reduction – indicating buybacks more than offset any stock issuance for incentives.
Importantly, Novo appears mindful of valuation and internal needs when buying back stock. In 2024, for example, the repurchase budget was scaled down 33%, to DKK 20 billion from 30 billion in 2023, likely because the company had massive expansion capex and the stock price was at historic highs. This suggests management did not mind pausing some buybacks rather than overpay for shares at peak valuations or starve investments.
From a more negative perspective, Novo prefers dividend payment on top of share buyback and therefore does not buy any shares in 2025.
M&A and expansion strategy
Novo Nordisk’s approach to acquisitions has been strategic and disciplined, not empire-building. Management has generally shunned mega-mergers and instead pursued targeted acquisitions that enhance Novo’s technology or product portfolio. In 2018 Novo made a bid for Belgian biotech Ablynx for roughly USD 3.1 billion but walked away when the target held out for a higher price (ultimately being bought by Sanofi). Novo’s refusal to chase Ablynx at any cost indicated price discipline – they wouldn’t destroy shareholder value just to buy growth.
A few years later, Novo did acquire Dicerna Pharmaceuticals for USD 3.3 billion in 2021. That deal gave Novo a leading RNAi therapeutic platform, aligning with its focus on serious chronic diseases. While Novo paid a significant 80% premium for Dicerna, this was a long-term bet on a new technology, and it fit Novo’s core areas on cardiometabolic and rare diseases. The acquisition was done in cash, reflecting Novo’s strong balance sheet, and avoiding equity dilution.
Besides Dicerna, most other deals have been smaller or were partnership buyouts. For example, Novo acquired rights or firms in fields like cardiology and NASH but has avoided diversifying beyond healthcare.
Some thoughts about recent communication
On quarterly calls, Novo’s management historically provides clear, if conservative, guidance and does not shy away from tough questions. During the recent updates in July and August 2025, management transparently cut the 2025 sales growth outlook from 10–16% to 8–14%, explaining the specific reasons: slower obesity drug uptake in certain markets, competition from Eli Lilly’s rival drug, and persistent use of compounded (unapproved) GLP-1 products in the US. They explicitly quantified the impact of these factors rather than using vague excuses. The CFO, Karsten Knudsen, frankly told analysts that the revised outlook assumes no reduction in compounding (i.e. they are not banking on an external fix). By discussing such details openly – even though it meant delivering bad news – Novo’s management showed a commitment to realism over optics.
Notably, they acknowledged competitor Lilly by name in commentary and admitted Lilly’s weight-loss drug had overtaken Wegovy in US prescriptions earlier in the year. This message about a rival’s success is a strong indicator of transparency. Novo also addressed pricing risks directly: in Q2 2025, management warned of “stronger pricing pressure in the U.S.” and the likely need for higher rebates/discounts.
Is there skin in the game?
Novo Nordisk’s management incentives are structured to align executives’ interests with those of long-term shareholders, with substantial insider ownership. The company explicitly requires top executives to ‘eat their own cooking’ by holding meaningful equity stakes. Novo mandates that the CEO hold at least 3× their annual base salary in Novo Nordisk shares, and EVPs hold at least 1.5× their salary in shares. These are significant requirements, phased in over 5 years of appointment. As of 31 Dec 2024, all executives met or exceeded these ownership guidelines.
Previous CEO Lars Jørgensen held 590,550 shares at year-end 2024 – worth around DKK 207 million. This is a massive personal stake (well over his annual base salary), meaning his fortune rose and fell with Novo’s share price which is a strong alignment with shareholders.
CFO Karsten Knudsen held ca. 208,000 shares (DKK 73 million), also far above his requirement. In total, the Executive Management team owned approx. 1.48 million Novo shares at end-2024. Notably, even non-registered EVPs (the ones not officially listed as executives with regulators) collectively held 680,000 shares. This broad equity ownership shows that senior managers have skin in the game.
Novo’s policies prevent rapid dumping. For instance, under Novo’s Long-Term Incentive Program (LTIP), when shares vest after a 3-year performance period, executives must hold a portion for an additional 2 years; 50% of vested shares for older grants, 40% for the 2024 grant. This enforced holding period means management can’t immediately cash out stock awards; they remain exposed to the stock’s future performance, fostering a longer outlook.
Executives do occasionally sell shares (e.g. Jørgensen sold 180,000 shares in 2024, likely for diversification or tax, but still ended the year with more shares than he started. CFO Knudsen similarly sold some (60,000) but acquired more (84,000) in 2024. Also in August 2025, Horst Lange sold almost 14,000 shares – worth 4.4 million DKK – and Helfgott sold 28,700 shares – worth 8.5 million DKK. Especially the timing – during all-time low valuation – creates some colored flag.
Are incentives aligned?
Executive remuneration at Novo is a mix of base salary, short-term incentive (annual cash bonus), and long-term share-based incentives. The short-term bonus (STIP) is tied to both financial targets (sales, operating profit) and individual strategic goals. Importantly, these individual goals often include non-financial metrics such as product launches, diversity & inclusion progress, and other long-term health indicators. In 2024, for example, Lars Jørgensen’s individual STIP payout was only 50% of max, partly because Novo missed certain targets. As a result, Jørgensen’s total compensation for 2024 was about DKK 57.1 million, down DKK 10 million from the prior year. In other words, he took a pay cut due to underperformance on both financial and DEI (diversity, equity, inclusion) goals. This sends a strong message that bonuses are not guaranteed; they hinge on achieving strategic milestones that matter to long-term value (profitability) and corporate culture (diversity).
The long-term incentive plan (LTIP) is even more aligned with shareholder value. It is entirely share-based, with a 3-year performance period and additional holding requirement. The performance metrics for LTIP are a balanced scorecard: 1/3 sales growth, 1/3 operating profit growth, and 1/3 non-financial strategic goals (e.g. innovation milestones, sustainability). This multi-year measurement ensures executives are rewarded only if they deliver sustained business success and progress on key strategic initiatives, not just a one-year spike. There’s also a cap such that even at maximum performance, the CEO’s LTIP grant can’t exceed 2.5 years’ base salary (30 months) worth of shares at grant. All shares for LTIP are granted from treasury stock (so no dilution), and as noted, they must hold vested shares for years, so any value they realize depends on Novo’s stock holding up or rising over a 3–5 year span.
How satisfied are employees?
Novo Nordisk is generally seen as a desirable employer, both in Denmark and globally. On Glassdoor, 84% of employees would recommend working at Novo Nordisk to a friend, and the company scores 4.2/5 on culture & values. Work-life balance and benefits are rated highly at 4.1/5. These metrics are stronger than many industry peers, indicating that employees feel respected and well-treated. It’s not uncommon for staff to spend 10, 20, even 30+ years at Novo. For instance, top executives like Jørgensen, Wulff, and Sylvest all started as junior employees and stayed decades. This internal promotion tradition suggests Novo is good at developing its people and that employees see long-term career paths. Management clearly focuses on talent retention as a strategic priority; even as headcount rose 20% in 2024 amid rapid expansion, they emphasized onboarding and integrating new hires into the Novo Nordisk Way to maintain culture cohesion.
From Insulin to Semaglutide
Today, Novo Nordisk dominates the global insulin market, but its real leap came with the development of GLP-1 receptor agonists, especially semaglutide, the active ingredient in drugs including Ozempic and Wegovy.
For most of its history, Novo Nordisk focused on supplying insulin. Currently they treat approx. 30 million people with Insulin.
Yet today it finds itself developing drugs that prompt the pancreas to release insulin by mimicking a hormone called GLP-1, or glucagon-like peptide 1.
The natural GLP-1 hormone is rapidly broken down in the body - it has a half-life of less than 2 minutes - making it impractical as a therapeutic agent and unsuitable as a drug because it degraded so rapidly - patients cannot be expected to take the medication every 2 minutes.
By the mid-1990s, most pharma companies had abandoned pursuing the development of GLP-1 based treatments for this reason. Lotte Bjerre Knudsen was tasked with one last attempt to make the hormone viable as a drug. By attaching a fatty acid chain to the GLP-1 peptide, she dramatically extended its half-life, resulting in once-daily and eventually once-weekly treatments.
‘Semaglutide’ is the generic name used by Novo Nordisk for its GLP-1 products.
GLP-1 products accounts for 70% of the revenue of Novo Nordisk - 50% on GLP-1 Diabetes products and 20% on GLP-1 Obesity products.
The positive side effect – Weight loss
When people began to use these new drugs there were unintended, but most welcome, side effects which resulted in their application being extended.
Semaglutide works by regulating blood sugar levels and slowing down the rate at which food leaves the stomach, often creating the feeling of fullness. Almost immediately, doctors noticed that patients on these drugs lost weight.
It was a breakthrough with a twist of irony. Obesity is one of the main drivers of type 2 diabetes - the very disease Novo Nordisk has been working to treat for decades. So, by helping patients lose weight, the company was now tackling the root cause before the disease even developed.
The scale of the obesity crisis is staggering. In the U.S., 41.9% of adults and 17% of children are classified as obese, according to the Center for Disease Control and Prevention (CDC).
Beyond the health implications, obesity is a major financial problem, placing a heavy burden on overstretched healthcare systems. It costs the U.S. healthcare system an estimated $173 billion a year, as it’s closely linked to other chronic conditions. That gives governments and health organizations a powerful incentive to support treatments that can turn the tide.
Over 1 billion people worldwide grapple with obesity, a number climbing steadily due to poor diets and too little exercise. As a result, analysts estimate the 2035 obesity drug market will be worth USD 150 billion - up from almost USD 10 billion in 2023. Staggering numbers!
But first, let’s dive into the offered Insulin products
Novo Nordisk has historically maintained the industry’s broadest and most diversified insulin portfolio, but as of August 2025, the company is undergoing a strategic reduction and modernization of its insulin product lines.
Volume: Total Insulin revenue was 19% of Total Sales Volume in 2024, but volumes were decreasing over the past years.
Growth was back in 2024 with a nice figure of 15%. Anyway, the percentage Insulin sales versus the total Sales is still decreasing due to higher growth of GLP-1 products.
Market share (Q1 2025): Novo Nordisk remains the world’s largest insulin manufacturer by volume, with a clear strategic pivot to higher-value, modern insulin analogs and away from older, less differentiated molecules and formats. Novo Nordisk reported DKK 14,997 million in global insulin sales (+3% CER YoY), with global volume market share at 43.5% (US: 31%, International Operations: 47%). Insulin sales remain strongest in emerging markets and China.
Product access: Novo Nordisk’s access and humanitarian strategies mean legacy human-based insulins (Mixtard, Actrapid, Insulatard) are still widely available in low- and middle-income countries, though modern analogs now dominate in high-income markets.
Recent discontinuations: Major product rationalizations in 2024-2026: Levemir phased out in the US (2024), discontinuing in EU and other markets by December 2026. NovoRapid FlexTouch discontinued in March 2025. NovoMix30 to be discontinued by end 2026. Fiasp PumpCart and other forms to be phased out by end 2026. Insulatard phased out most EU markets July 2025.
New launches: Awiqli (insulin icodec), a once-weekly long-acting basal insulin, is a major recent innovation and launched in early-adopter countries. The launch of Awiqli marks the biggest advance in insulin therapy dosing since the transition to basal analogs and could provide a competitive moat if weekly basal insulin becomes the new standard.
Ryzodeg (insulin degludec/aspart) is now being funded and positioned as a next-generation premix insulin option, particularly replacing NovoMix30.
Strategic shift: Novo Nordisk is actively winding down legacy and lower-margin insulin products, especially in developed markets, to prioritize next-generation basal insulins (Tresiba, Awiqli) and innovative GLP-1 therapies. This product pruning directly addresses supply-demand constraints and supports margin expansion.
Offered GLP-1 products
Novo Nordisk’s current GLP-1 products are centered around three leading semaglutide-based treatments - Ozempic, Wegovy, and Rybelsus - as well as the older liraglutide-based products like Victoza and Saxenda. Each has distinctive indications for diabetes and/or obesity.
Ozempic (semaglutide, injectable, weekly): Approved for type 2 diabetes (T2D) since 2017 (US) and for cardiovascular (CV) risk reduction in 2020. In January 2025, Ozempic was further approved to reduce the risk of kidney disease progression, kidney failure, and cardiovascular death in T2D with chronic kidney disease, making it the most broadly indicated GLP-1 RA currently available. Ozempic is the second best-selling medicine in the world, after Keytruda for cancer from Merck. Significant 41,4% of sales in 2024.
Wegovy (semaglutide, injectable, weekly): Approved for weight management since June 2021 in the US. Label extended for reduction of CV events (late 2024) based on landmark trial results. Wegovy has driven a 65% YoY increase in Novo’s obesity sales in Q1 2025. 20% of sales in 2024.
Rybelsus (semaglutide, oral, daily): Approved for T2D in 2019 in the US; currently the only oral GLP-1 on market for diabetes. Novo Nordisk filed for US approval of an oral semaglutide 25mg dose for obesity - if approved, it would be the world’s first oral GLP-1 drug for weight control (decision expected Q4 2025). Currently 8% of sales in 2024.
Victoza (liraglutide): Previously flagship injectable, now declining due to semaglutide’s superior efficacy and weekly dosing. Projected sales are in continued decline as of 2019.
Saxenda (liraglutide): First GLP-1 for chronic weight management, now largely superseded by Wegovy.
Summary
Novo Nordisk’s current GLP-1 portfolio is highly concentrated in the semaglutide platform, with differentiated delivery (injectable, oral) and multiple regulatory approvals positioning the company for continued growth out to the end of the decade.
Ozempic and Wegovy have both benefited from expanded regulatory indications, resulting in larger patient pool eligibility (diabetes, obesity, cardiovascular, and kidney protection).
Rybelsus, if approved at higher dosages for obesity, would be strategically significant - Novo Nordisk would hold differentiated, oral, first-in-class GLP-1-based obesity therapy, likely accelerating future market share gains.
Liraglutide-based products (Victoza, Saxenda) are now past their market peak and contributing less to growth, emphasizing Novo Nordisk’s successful transition to semaglutide-based next-generation GLP-1 RAs.
The expected FDA decision on oral semaglutide for obesity (anticipated Q4 2025) is a potential catalyst for further portfolio expansion, market leadership reinforcement, and revenue growth.
Who is the competition?
Eli Lilly (LLY) is Novo Nordisk’s most immediate competitor. Both Novo Nordisk and Eli Lilly have revolutionized treatment of type 2 diabetes and obesity with GLP-1-based drugs.
Novo Nordisk pioneered the field with semaglutide, marketed as Ozempic for diabetes and Wegovy for obesity.
Eli Lilly challenged this dominance with tirzepatide, a dual GLP-1/GIP agonist branded as Mounjaro (for diabetes) and Zepbound (for obesity). Novo Nordisk also markets liraglutide – as Victoza for diabetes and Saxenda for obesity – though these daily injections are now largely superseded by weekly semaglutide.
Both companies now dominate the GLP-1 market in what has become a de-facto duopoly, with others like Sanofi (SNY) and Pfizer (PFE) lagging.
Compared to the sprawling portfolios of some pharma giants, Novo Nordisk’s business is refreshingly straightforward. Novo Nordisk is a global leader in endocrinology, developing innovative therapies for diabetes, rare blood disorders, obesity, and hormone-related disorders, while Eli Lilly also focuses on a variety of other portfolios. This concentrated focus allows Novo to channel its expertise into a single domain and to build a reputation as a specialist in this field.
Both firms will also offer oral GLP-1 options. Novo’s Rybelsus (oral semaglutide) is already approved for diabetes, while Lilly is developing Orforglipron, a first-in-class oral non-peptide GLP-1 agonist showing ~14.7% weight loss in Phase 2.
Let’s dive into the differences between the product classes of both competitors.
Victoza vs. Trulicity
Novo Nordisk’s Victoza (daily liraglutide injection for diabetes) was approved in 2010. Its major patents have recently expired: in the US and Europe, the patent ran out at the end of 2023, after which generic versions appeared in 2024. Eli Lilly’s Trulicity (weekly dulaglutide injection) came later – FDA approval in 2014 – and is still protected until around 2027 (expected US patent expiration in 2027, with data exclusivity until 2026). Trulicity likely won’t see biosimilar competition until 2027/28, whereas Victoza now faces generic competition.
Usage, dosage & frequency
Victoza is administered subcutaneously every day (starting dose 0.6mg, maintenance typically 1.2mg or up to 1.8mg once daily). Trulicity differentiates itself with weekly dosing (start at 0.75mg once per week, standard 1.5mg; later, higher doses of 3.0mg and 4.5mg per week were introduced to increase effectiveness). Weekly administration of Trulicity was a major convenience advantage compared to daily injections with Victoza. Both are delivered as pens for subcutaneous injection.
Clinical effectiveness & side effects
Both liraglutide and dulaglutide are effective GLP-1 agonists for type 2 diabetes. They typically lower HbA1c by about 1–1.5 percentage points and lead to some weight loss (a few kilograms) in diabetic patients. Direct head-to-head data are limited, but in general weekly GLP-1s showed comparable or slightly better outcomes than older daily regimens due to better treatment adherence. Semaglutide (see below) has shown in trials to be more effective than dulaglutide for glucose control, but Victoza vs. Trulicity are both older generation: both significantly improve glucose control.
The side effect profiles are similar: chiefly gastrointestinal (nausea, vomiting, diarrhea) in ~10–20% of patients, especially during dose escalation. Victoza has a long safety track record, but daily injections make it less user-friendly; Trulicity’s weekly dosing improved convenience and adherence.
GI side effects with GLP-1 agonists are generally dose-dependent; Trulicity’s higher 4.5mg dose induced more nausea than lower doses, but this is similar to higher liraglutide doses (like Saxenda). Both drugs rarely cause severe side effects; pancreatitis is a rare but noted risk in this class.
Competitive position
Victoza was the GLP-1 market leader for years, but Trulicity’s weekly dosing posed a clear competitive threat for Novo. Eventually Novo’s Victoza was overtaken—primarily not just by Trulicity but by Novo’s own next-generation semaglutide (Ozempic). In 2023, Victoza sales dropped by more than 50% as the market shifted to weekly GLP-1s. Trulicity holds volume as a weekly option but is pressured by newer, more effective GLP-1s. Novo essentially ended the Victoza battle by launching its own better successor (Ozempic), but Eli Lilly’s Trulicity did result in market share losses for Victoza.
Ozempic vs. Mounjaro (Diabetes)
Ozempic (weekly semaglutide injection for diabetes) was approved at the end of 2017 (US) and is now a blockbuster for Novo. The core patents for semaglutide expire in 2026, but Novo has additional patents (formulation, dosage) that can provide protection until ~2031–2033. In the US, generic semaglutide is not expected before 2032, though patents elsewhere end earlier (e.g., China in 2026).
Mounjaro (tirzepatide, a dual GIP/GLP-1 agonist by Lilly) is much newer, approved May 2022 (US) for T2D. Tirzepatide is a new molecule with patent protection expected into the late 2030s (at least 2034+). Lilly also benefits from 12 years of data exclusivity (for biologics) in the US, so no biosimilar is expected before ~2034. Both drugs are protected for many years.
Usage, dosage & frequency
Ozempic and Mounjaro are both weekly subcutaneous injections via pre-filled pens. Dosages differ: Ozempic starts with 0.25 mg per week (for 4 weeks), then maintenance at 0.5 mg; can be increased to 1 mg and recently up to 2 mg per week for added effect.
Mounjaro starts at 2.5 mg per week and increases every 4 weeks: 5 mg, then 7.5 mg, 10 mg, up to 15 mg weekly. Gradual titration for both drugs help minimize side effects (mainly nausea). Both are once weekly—a major advantage over daily injections.
Clinical effectiveness
Tirzepatide (Mounjaro) has shown superior results in clinical studies compared to semaglutide. In the SURPASS-2 trial in type 2 diabetics, tirzepatide at all doses outperformed Ozempic 1 mg weekly. Specifically: tirzepatide 15 mg reduced HbA1c by ~2.3 percentage points vs ~1.9 pp with semaglutide 1 mg. Also, weight loss was greater: 6.2 kg for Ozempic vs. 12.4 kg for Mounjaro.
Lilly’s Mounjaro therefore achieved better blood sugar control and significantly greater weight loss in direct comparison. This superiority is attributed to tirzepatide’s dual mechanism (stimulating both GLP-1 and GIP receptors), giving an additive effect on appetite suppression and glucose control. Ozempic is highly effective—it has propelled GLP-1s to unprecedented heights—but is outperformed by Mounjaro’s results.
Side effects
The safety profiles for Ozempic and Mounjaro are very similar, primarily GI complaints. In the SURMOUNT-5 obesity study, nausea occurred in ~44% of both groups and abdominal pain in ~25%—practically the same. In diabetes studies, mild GI symptoms were slightly more frequent with tirzepatide during titration, but there were no major new safety issues.
Competitive position
Ozempic has been one of Novo’s main growth drivers, but Eli Lilly’s Mounjaro is the strongest competitor yet. Studies clearly show tirzepatide is more effective in both diabetes control and weight loss. This has commercial consequences: Mounjaro is rapidly winning global market share in the GLP-1 segment. Lilly now has a superior product, putting Novo’s dominant position under pressure.
Novo retains strengths: huge manufacturing capacity, global distribution, and a strong brand name (Ozempic is nearly synonymous with GLP-1s).
Wegovy (Semaglutide) vs. Zepbound (Tirzepatide)
Wegovy is the obesity version of semaglutide (higher dose, 2.4 mg/week). FDA approval was in June 2021. It uses the same active molecule as Ozempic; patent/exclusivity status largely matches Ozempic (US core patent to ~2032, EU 2031).
Lilly’s tirzepatide gained a distinct brand for obesity: Zepbound, FDA approved November 2023 for chronic weight management. In the EU, the indication of Mounjaro was formally extended to obesity in April 2024. Tirzepatide’s patent protection is the same as Mounjaro (new molecule, protected until the late 2030s). Wegovy’s patent relies on semaglutide’s secondary patents, possibly lasting to 2033, so no generic is expected for at least five years.
Usage, dosage & frequency
Wegovy and Zepbound are both weekly subcutaneous injections specifically for weight loss. Wegovy (semaglutide 2.4 mg) requires gradual dosage up-titration: start at 0.25 mg/week, increased stepwise (0.5 – 1.0 – 1.7 – 2.4 mg) over 16–20 weeks to reach full dose 2.4 mg.
Zepbound (tirzepatide for obesity) uses the same schedule as Mounjaro: escalating from 2.5 mg up to 15 mg/week in 4-week steps. Both are intended for long-term use in patients with obesity (BMI ≥30, or ≥27 with comorbidity). Pre-filled pens are used, self-injection in abdomen/thigh once per week.
Wegovy and Zepbound are similar in their weekly regimen. Lilly’s pen (Mounjaro) offers multi-dose options, Novo’s Wegovy pen is single dose per week. Both are easy to use in practice.
Clinical effectiveness
Tirzepatide is clearly more effective. A phase 3b head-to-head study (SURMOUNT-5) in obesity without diabetes showed tirzepatide 10/15 mg achieved average weight loss of 20.2% after 72 weeks, versus 13.7% with semaglutide 2.4 mg. In absolute terms: 22.7 kg lost with tirzepatide vs. 15 kg with Wegovy. Moreover, 32% on tirzepatide lost ≥25% body weight, compared to 16% with Wegovy.
Side effects
Side effect profiles are nearly identical. In SURMOUNT-5, about the same number of patients experienced nausea and stomach complaints in both groups. GI side effects (nausea ~40–45%, diarrhea, constipation) are common with both Wegovy and Zepbound, usually mild/moderate and during dose escalation. Dropout due to side effects is somewhat higher for tirzepatide in some studies, but not dramatically different (often <10% dropout for both). Importantly, tirzepatide does not introduce fundamentally new side effects compared to semaglutide.
Competitive position
Novo Nordisk was first to market with Wegovy, a truly effective obesity drug, initially with little effective competition. That lead is now eroding due to Lilly’s arrival. Tirzepatide (Zepbound) surpasses Wegovy in weight loss and is expected to be extremely popular. Lilly has gained a large portion of the obesity market within about a year. For the next five years, Novo’s dominance is not guaranteed: Wegovy will keep growing (current demand exceeds supply), but Novo must share market with Lilly.
Novo’s strengths: Wegovy has first-mover reputation and has already benefited many patients; Novo has massively ramped up production. Novo is also expanding semaglutide’s indication portfolio (such as for NASH/MASH—non-alcoholic fatty liver—which may be approved in Q4 2025). This could open new markets.
However, Lilly is also moving fast: tirzepatide may receive additional indications (e.g. OSA/sleep apnea—the EMA recognized this effect in 2024), and Lilly is developing retatrutide (triple agonist) which has potentially even greater efficacy.
CagriSema as brand new GLP-1 product
CagriSema is Novo Nordisk’s next-generation obesity drug designed as a fixed-dose combination of two agents: semaglutide (a GLP-1 receptor agonist) and cagrilintide (a dual amylin and calcitonin receptor agonist). It is administered once weekly via subcutaneous injection.
In December 2024, the Phase III REDEFINE 1 trial showed CagriSema achieved a mean weight loss of 22.7% after 68 weeks in patients with obesity or overweight without type 2 diabetes, compared to 16.1% with semaglutide alone and 2.3% with placebo. While meeting its primary endpoint, the result fell short of Novo Nordisk’s initial 25% target.
The REDEFINE 2 trial in overweight or obese patients with type 2 diabetes showed a 15.7% weight loss with CagriSema over 68 weeks, which was viewed as less compelling relative to expectations and competing therapies like Eli Lilly’s tirzepatide (Zepbound).
Novo Nordisk announced plans for a new Phase III trial, REDEFINE 11, set to start in the first half of 2025. This longer, dose-escalation-focused trial aims to explore if higher or re-escalated doses can achieve greater weight loss, potentially surpassing prior results. Regulatory submission for approval is expected in the first half of 2026.
Despite underwhelming results compared to initial expectations, Novo Nordisk regards CagriSema as “one of the most substantial weight reductions observed in a Phase III trial” and sees potential for additional efficacy gains with longer treatment duration and optimized dosing.
CagriSema (Semaglutide + Cagrilintide) vs. Zepbound (Tirzepatide)
CagriSema is Novo Nordisk’s candidate combination of semaglutide (GLP-1 RA) and cagrilintide (amylin analog) in a single weekly injection. It’s in phase 3 research for obesity and diabetes and not yet on the market (expected filing after 2025). The semaglutide component falls under existing semaglutide patents (2031–2032), while cagrilintide is a new molecule protected until mid–2030s.
Tirzepatide (Lilly) is the sole competitor here, already launched as Mounjaro (diabetes) and Zepbound (obesity).
Usage, dosage & frequency
CagriSema is given once weekly by subcutaneous injection with a dual-chamber pen delivering 2.4 mg semaglutide + 2.4 mg cagrilintide. Like Wegovy, the dose is gradually increased to maintenance to minimize side effects.
Tirzepatide is also injected weekly, with stepwise titration to a max of 15 mg. Advantage of tirzepatide is being a single molecule, whereas CagriSema is a combination coming together only prior to injection.
Clinical effectiveness
In Phase III (REDEFINE studies), CagriSema showed ~22.7% weight loss (68 weeks) in obesity—a clear improvement over semaglutide alone (~16%), but short of Novo’s 25% target. In obese patients with diabetes, weight loss was ~14% after 68 weeks.
Tirzepatide achieves similar or higher results: ~21% weight loss at 72 weeks in obesity (without diabetes), ~15% in diabetics. Thus, so far, CagriSema has not clearly outperformed tirzepatide in direct or indirect comparison. Novo has announced it will test higher doses in an additional Phase III trial to try and achieve further weight loss.
Side effects
The semaglutide + amylin combo mostly brings gastrointestinal complaints, just like other incretins. Many participants reported nausea, vomiting, or constipation during titration. In CagriSema studies, side effects were similar to known GLP-1 effects, without new safety signals. Tirzepatide’s side effect profile is similar, with GI symptoms most common.
Results - CagriSema
Results - Tirzepatide (SURMOUNT 3)
Oral - Rybelsus (and Oral Semaglutide) vs. Orforglipron
Rybelsus is the world’s first and only oral GLP-1 agonist (semaglutide in tablet form). FDA approval was in September 2019. It shares the active molecule with Ozempic/Wegovy; semaglutide’s core patent expires in 2026, with expected market exclusivity into the early 2030s via additional patents. Rybelsus itself has unique formulation patents (e.g., co-formulation with the absorption enhancer SNAC), possibly securing exclusivity until 2031.
Novo Nordisk in 2023–2024 tested higher doses (25 mg and 50 mg) in Phase III for weight loss. The FDA is reviewing 25 mg oral semaglutide for chronic weight management (anticipated approval in 2025).
Eli Lilly currently has no oral GLP-1 product on the market. Lilly is developing an oral agent: orforglipron (a non-peptide oral GLP-1R agonist), in Phase III (expected launch ~2025–2026). That will be Lilly’s first oral rival; until then, Novo Nordisk has a monopoly in this segment.
Usage, dosage & frequency
Rybelsus is a tablet taken daily by mouth. Available strengths: 3 mg, 7 mg, 14 mg. Start at 3 mg daily (for 30 days), then 7 mg, possibly increased to 14 mg daily. Important: tablet must be taken on an empty stomach in the morning with little water, at least 30 minutes before breakfast. The empty-stomach instruction is necessary for absorption and is a minor disadvantage compared to injectables (which can be given regardless of meals).
Oral Semaglutide will be offered in 25mg and 50mg once-daily doses.
Lilly’s orforglipron (as far as known) will also be daily, but without such strict intake requirements (as it isn’t a peptide). Studies began with 1–3 mg/day, increasing to about 36 mg once daily as maintenance.
Clinical effectiveness
Oral semaglutide is somewhat less potent than the injectable version. In trials, Rybelsus 14 mg lowered HbA1c by ~1.1–1.4% (depending on comparator) and caused ~4–5 kg weight loss in type 2 diabetes. This is outdated since results from 25 mg and 50 mg oral semaglutide emerged.
A Phase III study in obesity showed oral Semaglutide 50 mg daily yielded an average ~17.4% weight loss over 68 weeks.
Lilly’s orforglipron delivered ~12.4% weight loss after 72 weeks in early studies – well behind Novo. Lilly’s results published August 7, 2025, led to a -10% drop in the stock market.
Overview results - Oral Semaglutide vs. Orforglipron
Results - Oral Semaglutide 25 mg
Results - Oral Semaglutide 50 mg
Results - Orforglipron 36 mg
Side effects
Rybelsus has side effects consistent with GLP-1: nausea, stomach upset, which diminish with up-titration. No unique adverse effects from the oral form except that high doses occasionally cause more stomach irritation (because of the SNAC excipient).
Competitive position
Novo Nordisk currently holds a unique advantage. Rybelsus is the only oral GLP-1, allowing Novo to attract patients who do not want injections. This boosted Novo’s market share in places like Japan and the EU (where Rybelsus grew, while in the US sales stagnated due to Ozempic’s focus).
Lilly is behind in this segment—Orforglipron will likely hit the market in about 2 years (if all goes well), meaning for the next 1–2 years Novo remains unrivaled in orals, a clear competitive edge. This may help support overall GLP-1 market share, as Novo can offer both injections and pills, tailored to patient preferences.
Additionally, the new 50mg semaglutide pill shows notably better results than Lilly’s Orforglipron, meaning Novo is likely to remain the market leader here for now.
Amycretin vs. Retatrutide
Amycretin is Novo’s newest dual-action candidate activating both the GLP-1 and amylin receptors. It’s still in development (Phase II finished); Phase III studies begin early 2026. Novo hopes to bring it to market before 2030. As amycretin is a new molecule, patents are likely to run to the 2040s.
Retatrutide is Eli Lilly’s “triple G” agonist (GLP-1, GIP, glucagon receptor) in development. Phase II results (2023) were promising and Phase III is ongoing; launch expected around 2027–2028 if all goes well. Lilly says the retatrutide patent likely runs several years after tirzepatide’s (possibly late 2030s).
Usage, dosage & frequency
Both are injectable agents designed for weekly administration. Amycretin has, so far, been tested as a weekly subcutaneous injection (e.g. 20mg or 60mg per week), also in a test oral daily form. In the Phase II study, patients got weekly injections, with 20mg and 60mg as highest doses.
Retatrutide is also given weekly; in Phase II, doses of 4mg, 8mg, and 12mg per week were evaluated, with the highest dose most effective. Both drugs will be available as pen injections, similar to current GLP-1s.
Clinical effectiveness
Amycretin showed impressive results in early trials: 22% weight loss at 36 weeks (20mg/week), up to 24.3% at 60mg/week. Notably, weight loss did not plateau after 36 weeks, suggesting longer therapy could lead to even greater reduction.
Lilly’s retatrutide showed ~24% weight loss over 48 weeks at 12mg/week in Phase II. Some subjects lost 30%+ of weight within ~8 months on retatrutide, though there were questions about the safety of such rapid weight loss.
Besides weight, amycretin improves glycemia (also being tested in diabetes), and retatrutide showed strong HbA1c and fat mass reductions. In short, both are “next generation” obesity drugs with groundbreaking effectiveness.
Additionally, Novo has licensed its own triple-agonist (UBT251), targeting GLP-1/GIP/glucagon; in a mid-stage study, UBT251 achieved ~24% weight loss after 48 weeks—comparable to retatrutide.
Side effects
Novo reported safety consistent with incretin therapies, mainly GI symptoms. Extra amylin agonism can cause nausea since amylin also stimulates the satiety center—this effect is pronounced but manageable via dose escalation.
Retatrutide’s triple action brings, beyond GLP-1/GIP effects, glucagon receptor agonism, which raises metabolism but can potentially cause side effects like increased heart rate, mild blood pressure rise, or elevated enzymes. In Phase II publication, GI symptoms (nausea ~30%, diarrhea) were most common, as is typical for GLP-1s. A few patients on high-dose retatrutide had temporary heart rate increases and a catabolic feeling (glucagon effect).
Further optionality with GLP-1
The story doesn’t end with CagriSema because GLP-1 drugs have shown promise beyond diabetes and obesity.
Dopamine pathways evolved to help us survive - simplistically, food and sex trigger a dopamine hit in the brain. It feels good, so we do it again. Dopamine also explains addictions to nicotine and alcohol. GLP-1s influence neurological impulses and dopamine pathways, helping users suppress some of these cravings - so these miracle drugs may be capable of helping people quit drinking and smoking.
There’s more - these medications have even proven effective at tackling heart failure according to a pair of studies published in The Lancet and The New England Journal of Medicine. HFpEF (heart failure with preserved ejection fraction), stiffens the heart muscle and stops it from filling with blood properly - it affects more than half of patients with heart failure. Once patients with HFpEF are hospitalized for heart failure, their five-year mortality can be as high as 65 percent. These studies found that heart failure hospitalizations for those taking the GLP-1 went down by 70 percent - these kinds of success rates are unheard of in clinical trials.
GLP-1s may also be able to treat other conditions with trials ongoing, focused on non-alcoholic steatohepatitis (NASH) otherwise known as non-alcoholic fatty liver disease (NAFLD), chronic kidney disease, sleep apnea, metabolic dysfunction-associated steatohepatitis (MASH), hempophilia, sickle cell disease and even Alzheimer’s.
We also are building the cardiovascular, liver and kidney-related pipeline, where we again see progress in both Phases I, II and III. And given that we defined that focus area only a couple of years ago, it’s gratifying to see that level of clinical activity at this point in time. And finally, obviously, we are super happy with the progress that we’re also doing in rare disease, specifically in the hemophilia space, but we also now see progress of our sickle cell disease assets, which obviously again speaks to a disease area with a huge unmet need.
Martin Holst Lange
How sticky are people to it?
No less than 68% stops within a year. Over time, these percentages should be able to decrease because some of the reasons why people stop will become less relevant. Here are the main reasons for stopping:
Side effects (nausea, vomiting, and diarrhea).
Costs are no longer covered by the insurer. For example, insurers in the US have stopped covering due to high costs. Or if you change jobs and the new employer’s insurer does not cover it. Currently, only 50 million people are (partially) covered in the US.
Stopping after successful weight loss (although this often leads to weight gain and possibly new treatments in the future).
Shortages of medication forcing patients to stop or switch to an alternative.
The previous GLP-1 drug Saxenda, which has been on the market for 10 years, has a much higher discontinuation rate. Only 21% lasted a year. This is despite being no shortages.
Diabetes market – Novo is market leader for years
463 million people in the world had diabetes in 2019. This grew to 537 million in 2021 - about 10% of adults and followed by a strong growth of 7.5% per year. The expectation is that by 2030, 643 million people will have diabetes. That represents a growth of 2% per year.
This group has a life expectancy that is 8 years shorter than average. About 30% of this group suffers from cardiovascular diseases, and 40% have kidney problems. Strong reasons why part of this group greatly benefits from GLP-1 medicines, as these reduce the risk of additional diseases and premature death.
Below is the distribution and future growth of diabetes:
Treated by Novo
Novo provides an annual overview of the number of people they treat. From 32.8 million in 2022 to 43 million in 2024. That is growth of about 7% per year — faster compared to the growth of the total patient population per year. This makes sense; they currently only cover an estimated 7.5%(!) market share of the total TAM.
Market volume - Diabetes
Current market volume is 523 billion DKK.
Looking back, we saw 5% and 3% growth in 2020 and 2021, followed by 25% and 17% growth in 2022 and 2023 due to the use of diabetes medicines for weight reduction. With the introduction of specific weight-loss drugs, this growth rate is not expected to continue in the future (although Ozempic remains an important brand linked to weight loss).
Market share - Diabetes
Novo is market leader in the overall diabetes market with a market share of 32,6%. In addition, market share has been growing sequentially in 2022 and 2023, but is currently going down due to increased competition of Eli Lilly.
Eli Lilly currently has 26% and Sanofi has 17% market share.
GLP-1 market – Still market leader, but decreasing share
In its GLP-1 franchise - led by the revolutionary semaglutide – Novo commands roughly 55% of the worldwide GLP-1 market in an oligopoly together with Eli Lilly (45%).
The growth opportunities within diabetes are significant. GLP has a worldwide penetration of only 6% within the diabetes population (17% in the US). This low percentage is mainly due to shortages or hesitation from patients and doctors.
Obesity market - Small portion currently taken…
According to studies that Novo reflects on, there are 934 million people worldwide with obesity. This number is expected to grow to 1.246 billion by 2030. That is a growth of about 7% per year (!).
Of those 934 million, only 2,2 million people (!) are currently (2024) treated with a Branded Anti-Obesity Medication (BAOM).
This has a few reasons:
Many people with obesity don’t meet the specific criteria for prescription of branded drugs, since many BAOMs are approved only if a person has a Body Mass Index (BMI) above a certain threshold of around 30 kg/m².
Many health insurance plans across the world do not cover anti‐obesity medications or cover them only under very limited circumstances.
In many parts of the world the drugs are yet to be approved or reimbursed, or the drugs are not available at scale.
A significant two-stage rocket; on one hand >97% of the market is still untapped, and on the other hand, it is a rapidly growing market.
Market volume - Obesity
Due to this low untapped market, the market volume is quite limited nowadays with a total of 228,1 billion DKK in 2025 but is growing with significant numbers – 142% YoY from Q2 2024 to Q2 2025!
Market Share - Obesity
57% market share in May 2025. But market share is decreasing since they lose a lot of territory to Eli Lilly. Eli Lilly has rapidly expanded its global footprint beyond the United States, gaining ground in international markets with aggressive launches and increasing access. In fast-growing emerging markets such as India, Eli Lilly is competing head-to-head with Novo Nordisk for market share.
Let’s dive a bit deeper in the market shares.
Market Shares – A structural decline of all segments in past years
Global Diabetes market
First, the entire Diabetes market. Novo has been the global market leader in this large market for many years, with market share fluctuating between 30% and 35%. Since 2022, Eli Lilly has gained a small amount of market share; partly from Novo and partly from Sanofi. It has also taken market share from smaller players. In practice, this means stable growth from 21% in H1 2022 to 28% in H2 2025. Novo has gone from 34% to 32.6% market share in just one year.
Global GLP-1 market
Here, Novo is not only the market leader but also holds more than 50% of the market! Nevertheless, there is a noticeable decline, from 56.1% in Q2 2024 to 51.9% in Q2 2025 – in just one year. The US plays a role in this, but the significant declines are especially seen in the International Operations segment.
Global Insulin market
Novo is market leader as well, though a structural decline is visible. It is less pronounced than in other segments; from 47% in 2022 to 43.3% in Q2 2025.
Global Obesity market
The most dramatic drop in market share can be seen in the Obesity market. In the revenue numbers, this isn’t fully visible yet due to extremely strong market growth (which means Novo’s turnover was still growing in Q2 2025). However, underneath the surface, the figures are striking: market share declined from 80% in Q4 2024 to 57% in Q2 2025 – a reduction of 23%(!) in just one year!
The market is growing at absurd rates, with year-on-year growth above 100%, so there is still growth possible for Novo in absolute terms.
Q4 2024 was the first quarter in which competitors added more revenue year-on-year than Novo.
This is clear at the product level as well. Outside the US, Ozempic was completely overtaken by Mounjaro in Q2 2025, dropping from 53% to 41% market share in just one quarter. In the US itself, from 54% down to 47%.
In the US, we see similar behavior for Zepbound compared to Wegovy; from 41% to 34% market share in just one quarter. Novo still holds 100% market share outside the US.
When both product categories are combined, we see that Lilly has taken over the market leader position in Q2 2025, with Novo at 44% and Lilly at 56%.
Production capacity constraints – How did Novo (and Lilly) solve it?
What sets Novo apart operationally is its vertically integrated supply chain controlling every stage of production, from raw materials to finished products. This integration strengthens its competitive position by reducing dependency on external suppliers and has been achieved over years of organic growth augmented with complex and costly acquisitions. This manufacturing process is a key strength because producing complex biologics like semaglutide at scale is a feat few rivals can match.
Before we discuss the production constraints, let’s look briefly at the Supply Chain elements of Novo Nordisk:
Research & Development
Novo Nordisk conducts the bulk of its research in-house, with major R&D centers in Denmark (Bagsværd headquarters and Måløv) and specialized centers abroad (e.g. Seattle, US for obesity and biopharm research). This in-house R&D yielded semaglutide’s discovery and development. Novo also collaborates with academia and biotech firms for innovation (examples: partnerships with MIT on RNAi delivery, acquisitions like Dicerna for RNAi, and an alliance with Emisphere to develop oral semaglutide’s absorption technology).
By keeping R&D closely tied to production, Novo can smoothly tech-transfer new molecules into manufacturing. The company’s vertically integrated model means it often owns the intellectual property and the production know-how, unlike many pharma companies that heavily outsource early development. This has allowed Novo to optimize the engineering of biologic production organisms (e.g. the yeast for semaglutide) alongside drug design.
Active Pharmaceutical Ingredient (API) production
Novo Nordisk is unique in that it manufactures nearly all its own API for insulin and GLP-1 drugs. Semaglutide is produced via recombinant biotech methods – Novo uses engineered Saccharomyces cerevisiae yeast to ferment the GLP-1 peptide, then purifies and chemically modifies it (attaching an acyl chain). The primary API production hub is Kalundborg, Denmark, a sprawling site often called Novo’s “industrial backbone.” Kalundborg hosts large-scale fermenters and purification facilities that have been expanded to produce semaglutide in addition to insulin.
In 2022 Novo invested ~$6 billion to expand API capacity here, specifically citing semaglutide needs. Another key API site is Clayton, North Carolina (USA) – Novo opened a plant there in 2019 to make active ingredients for diabetes drugs.
Novo also has API production in Montes Claros, Brazil (mainly insulin) and Tianjin, China (insulin API for Asia), though for GLP-1 the Western facilities carry most load.
Novo Nordisk’s subsidiary Novo Nordisk Pharmatech A/S (in Køge, DK) produces certain raw materials and auxiliary ingredients – for example, it manufactures recombinant enzymes and specialty chemicals used in Novo’s biologics production. Overall, owning API production allows Novo to safeguard against supply disruptions and scale up quickly - as seen by their rapid output increase in 2023–24 which we will discuss a bit later.
Fill-finish and device manufacturing
After API is produced (as bulk drug substance), Novo conducts formulation, filling into injection devices, and assembly/packaging largely in-house. A major facility for this is in Hillerød, Denmark, where Novo has a high-tech plant focusing on assembling its signature injection pens for diabetes and obesity drugs. Novo’s devices (e.g. FlexTouch pens for insulin, the single-use Wegovy pen) are manufactured and assembled here – the site was described as “cranking out injection pens for chronic diseases”.
For U.S. supply, Novo has a fill-finish site at Clayton, NC as well, which currently fills Ozempic pens and will fill Wegovy. Recognizing capacity needs, Novo is constructing a second fill-finish facility at Clayton (1.4 million sq ft) which will effectively match the combined size of Novo’s three current NC plants. This new plant (completion around 2026) will significantly boost pen filling and cartridge filling capacity for Ozempic and Wegovy.
Beyond drug vials/pens, device component sourcing is also carefully managed. Novo often designs devices in-house (e.g. the NovoPen and FlexPen technologies) but may outsource manufacturing of some components to specialized firms (for example, polycarbonate pen shells or needles). However, final assembly and packaging is done at Novo’s facilities to maintain tight control. The company’s end-to-end ownership of device production has been key for quality and also for iterative improvements (like moving from daily to weekly injection devices).
Packaging & labeling
Once filled, products are packaged into finished cartons with patient instructions. Novo operates packaging lines at its production sites (Denmark, US) and also at regional distribution centers. For instance, Novo’s U.S. packaging and warehouse center is in Plainsboro, NJ (also the US headquarters). There, products arriving from Denmark or NC can get final labeling for the U.S. market. Internationally, Novo might ship bulk product to local affiliates for packaging in local languages. The supply chain is globally coordinated such that drugs are manufactured in a few strategic sites but then distributed worldwide.
Novo recently partnered with logistic firms to enable more decentralized distribution; for example, a ‘Global Supply, Local Distribution’ model was implemented where two separate warehouse hubs serve different global regions to speed up deliveries.
Quality control and compliance
Vertical integration means Novo also handles its own quality testing at each stage. The new QC ‘mega lab’ being built in Denmark will centralize a lot of product testing under one roof. Each manufacturing site has onsite QC labs as well. Novo must also comply with various regulations like FDA’s DSCSA (track-and-trace); the company maintains an Authorized Trading Partners portal for U.S. distribution compliance. Being vertically integrated makes it easier for Novo to implement rigorous quality systems across the entire chain (from raw material to finished pen), which is crucial for biologics like semaglutide.
Logistics and cold chain distribution
Given that Ozempic and Wegovy are peptides that require refrigeration, Novo Nordisk’s supply chain emphasizes cold-chain logistics. Novo has strategic partnerships with global logistics providers. Notably, in 2021 Novo Nordisk signed a deal with A.P. Møller–Maersk to handle its worldwide cold-chain shipping. Under this agreement, Maersk manages end-to-end transport of Novo’s medicines (via air and sea freight) in temperature-controlled containers. Likewise, Novo works with Kuehne Nagel, another large logistics firm, including on sustainable fuel initiatives for air freight. In the U.S., Novo uses major parcel carriers (UPS, FedEx) for delivering products from distribution centers to pharmacies (and now to patients via NovoCare).
The U.S. distribution network typically flows from Novo’s U.S. warehouse to the “Big Three” pharmaceutical wholesalers: McKesson, AmerisourceBergen, and Cardinal Health. Those wholesalers then supply retail pharmacies such as CVS, Walgreens, Walmart, etc., mail-order pharmacies, and hospital pharmacies with Novo’s products. For specialty drugs like Wegovy, Novo initially limited distribution to certain specialty pharmacies due to supply. In 2022, Wegovy was mainly available via CVS Specialty and others, to manage allocation during shortages. As of 2025, with supply normalized, Wegovy and Ozempic are available through most retail and specialty pharmacy channels.
Back to the production capacity constraints – How did Novo (and Lilly) solve this?
Both companies faced temporary supply shortages as demand outpaced production in 2023. Novo Nordisk had to limit Wegovy supplies for much of 2022 and 2023, and certain Ozempic dose pens were intermittently backordered. Eli Lilly’s Mounjaro, after its mid-2022 launch for diabetes, also saw struggles with supply constraints going back to 2022, especially for higher doses. By mid-2023, surging demand led to tight supplies of Mounjaro’s 10 mg dose through at least Q3 2023.
Historically, Novo’s capital needs were modest, with manufacturing costs a small fraction of sales. But in 2024, capital expenditures rose to DKK 47.2 billion to meet skyrocketing demand.
Key initiatives of Novo Nordisk include:
New plants
Novo is building a second fill-finish facility in Clayton, North Carolina with a USD 4.1 billion investment. This massive site of 1.4 million sq ft will finish Ozempic/Wegovy and effectively doubles Novo’s US fill-finish footprint. In Denmark, Novo is constructing a 700,000 sq ft API production facility in Hillerød (ready by 2029) to make active ingredients for future products, and a new USD 409 million quality control lab there to support expanded output. Novo also announced a DKK 42 billion expansion of its Kalundborg, Denmark facilities – mainly to boost active semaglutide API capacity, given Kalundborg’s role as a flagship API site for insulins and GLP-1s. Additionally, Novo’s Pharmatech unit is spending DKK 1.5 billion on a new plant in Køge, Denmark to produce raw materials for Ozempic/Wegovy by 2027.
Acquisitions
To rapidly augment capacity, Novo Nordisk’s parent (Novo Holdings) moved to acquire Catalent, a major contract manufacturer. The USD 16.5 billion deal, closed at the end of 2024, will transfer three key Catalent factories to Novo Nordisk for about USD 11.5 billion. This gives Novo in-house control of critical fill-finish sites needed for semaglutide production. An analyst noted this could substantially increase semaglutide fill/finish capacity in the US. Indeed, acquiring these sites (reportedly including Catalent’s Bloomington, IN facility and others) is a massive strategic win that Novo says will help end Wegovy/Ozempic shortages. Novo also bought a biologics plant in Czech Republic from Novavax in 2024, adding further capacity (though Novo stated that site will not be used for semaglutide products).
Key initiatives of Eli Lilly include:
Eli Lilly has similarly poured resources into manufacturing to support tirzepatide (Mounjaro/Zepbound) and its pipeline. Lilly is building a massive new API facility in Lebanon, Indiana as part of a sprawling ‘LEAP’ innovation campus. In May 2024, Lilly doubled its investment in this site – now USD 9 billion – specifically to produce tirzepatide’s active ingredient at scale. This is touted as the largest-ever investment in synthetic drug API manufacturing in the U.S. The Indiana plant will ensure Lilly can supply at least 50% more sellable doses of Mounjaro/Zepbound in late 2024 vs. 2023.
Since 2020, Lilly has committed over USD 18 billion globally to manufacturing expansion. This includes new sites in Research Triangle Park and Concord, NC; Limerick, Ireland; and Alzey, Germany, as well as USD 1.2 billion in upgrades to its Indianapolis facilities. Lilly even acquired an injectables plant in Wisconsin (Pleasant Prairie) to expand its fill-finish capacity. Internationally, Lilly is expanding in Suzhou, China – investing USD 200 million to upgrade its site to produce tirzepatide for China and Europe, following Chinese approvals for diabetes and obesity. By late 2024, Lilly also began constructing a USD 4.5 billion ‘Medicine Foundry’, which is a combined R&D and manufacturing center, adjacent to its Indiana API plant, further cementing long-term capacity.
As a results, supply chain constraints are solved
Thanks to the investments of Novo, Novo Nordisk announced by late 2024 that all doses of Wegovy were fully available in the U.S., signaling an end to the persistent supply shortages. The FDA removed Wegovy from its drug shortage list after production caught up. Novo’s semaglutide products are now deemed commercially available at scale.
By October 2024 the FDA also declared all tirzepatide doses (for both Mounjaro and Zepbound) available and resolved the shortage. In fact, Lilly’s CEO confidently projected that with new lines coming online, 2025 output for Mounjaro/Zepbound will be 50+% higher than 2023. Thus, heading into 2025, the supply crunch for both semaglutide and tirzepatide has eased, thanks to these aggressive capacity expansions.
Compounding – What happened exactly?
A major headwind for Novo Nordisk (and, to a lesser extent, Lilly) has been the phenomenon of compounding: U.S. pharmacies preparing their own GLP-1 medications (compounding) with imported active ingredients, bypassing the manufacturers. This led to a “copycat market” of semaglutide- and tirzepatide-containing products.
Timeline of major moments around the compounding issue
2021 - 2022: Explosive demand for Novo’s Wegovy (semaglutide 2.4 mg) led to product shortages. At the end of 2021 and throughout 2022, Novo faced supply problems due to unexpectedly high demand and production limits. This opened the door for compounders. Pharmacists began preparing semaglutide solutions for weight loss, sometimes sourcing semaglutide sodium (a salt form not strictly FDA-approved) as a raw ingredient.
H1 2023: Compounding becomes more widely known. Social media and telehealth startups promote “custom weight loss shots” which actually contain unauthorized semaglutide. The FDA permits compounding when a drug is on the official shortage list. Both semaglutide and tirzepatide were on that list early 2023 because of supply problems, making it legal for pharmacies to compound these drugs temporarily. The FDA begins worrying about safety and warns consumers about compounded semaglutide (first warning in July 2023).
October 2024: Lilly announces tirzepatide shortage is resolved and the FDA removes tirzepatide from the shortage list. A few months later, the FDA declares the Semaglutide shortage solved. According to regulations, this means compounding should stop. However, a group of compound pharmacies (Outsourcing Facilities Association) sues the FDA, arguing the shortage was ended too early and the unmet demand persists. They seek an injunction to allow continued compounding.
Late 2024: Escalation. In October 2024, the FDA issues a public warning letter to patients and doctors not to use compounded semaglutide. The warning highlights these compounded preparations are not tested or approved and carry risks. In early November 2024, the FDA announces enforcement plans with deadlines to end compounding. Meanwhile, Novo Nordisk launches its legal offensive: by 2023/2024, Novo has already filed dozens of lawsuits against compounding clinics, and this gains attention in the media in 2024. Lilly follows suit. By the end of 2024, first court rulings confirm compounding is not protected now there is officially no shortage.
March 2025: Enforcement breakthrough: a federal judge rejects the compounders’ requested injunction and allows the FDA ban on compounding to proceed. The FDA announces deadlines:
Compounding tirzepatide: immediate stop for state-licensed pharmacies, deadline of March 19, 2025 for larger outsourcing facilities.
Compounding semaglutide: stop by April 22, 2025 for local pharmacies and May 22, 2025 for large compounders (or earlier if a judge rules sooner).
After these dates, compounding is officially illegal except in rare cases.
H1 2025: Despite looming bans, compounding continues at a large scale through spring. Estimates show a significant share of American patients now use compounded GLP-1s. Novo and Lilly take this seriously. In May 2025, Novo’s CEO Lars Jørgensen stated that “the copycat market is as large as our own obesity business.” Analysts estimate up to 30% of U.S. GLP-1 users now take unauthorized compounded versions – especially in obesity, as many cannot or will not pay USD 1,300 per month for Wegovy, resorting to cheaper compounders. Novo’s CFO confirmed that “compounded versions of Wegovy were sold at a much lower price point,” creating substantial competition.
H2 2025: Active enforcement begins. The FDA sends letters and threatens sanctions to violators. Novo Nordisk steps up legal actions: on August 5, 2025 Novo reports it has filed over 130 lawsuits in 40 states against sellers of illegal semaglutide copies. Judges have issued 44 permanent bans against such parties. The FDA itself released an alert in July 2025 warning of serious risk from compounded GLP-1s such as examples where overdoses occurred with patients receiving multiple times intended dose due to dosing errors.
Stakeholders of compounding: who makes and who offers it?
The compounding ecosystem involves multiple layers of parties:
API producers (raw material)
The active ingredients (semaglutide, tirzepatide) for compounding are often imported, mainly from China. A Brookings report showed that 60% of the Chinese manufacturers who export Semaglutide API do not even have permission to use that substance in medicines within China. In other words, dubious factories in China produce synthetic semaglutide of uncertain quality and sell it through intermediaries. All semaglutide imported for compounding since June 2023 came from Chinese suppliers. This illustrates that the supply chain operates outside regulated pharmaceutical channels. For tirzepatide, the situation is similar, although that molecule is more complex; there are reports that tirzepatide powder is also available via China.
Compounding pharmacies & clinics
In the U.S., there are state-licensed compounding pharmacies and larger outsourcing facilities. They purchase the raw API and manufacture injectable solutions or sometimes oral drops/pills. This occurs without FDA oversight. Some names that have appeared in lawsuits are Empower Pharmacy and Strive Pharmacy - large compounders working nationally. Additionally, there are local pharmacies that make individual magistral preparations. They often operate in tandem with telehealth clinics. Their marketing trick was to claim these were personalized medicines tailored to the patient. In reality, these were standard knockoffs of Wegovy/Ozempic, just unapproved. They violate various laws (including FDA approval laws and sometimes state laws against corporate practice of medicine - meaning non-physicians directing treatment).
Telehealth platforms and online clinics
This is the newest link that enabled the explosion. Some named companies are Hims, Fella Health, Henry Meds, Mochi Health, Ro, Ageless, etc. These platforms often employ doctors who assess the patient via online consultation and then write a prescription for the compounded drug, usually directly filled at a partner pharmacy. Lilly’s lawsuit claims these telehealth companies actively steer patients away from FDA-approved options toward their own cheaper compounded drugs under false pretenses. Their interest is financial: they often charged subscription fees and profited from compound sales. In short, telehealth provided scale: aggressive online marketing reached hundreds of thousands of consumers across the U.S., outside the traditional healthcare system.
Patients - consumers
Naturally key stakeholders - why did they choose this route? Two reasons:
Availability - long waiting lists for Wegovy or doctors unwilling to prescribe; compounded versions were easier to obtain via simple online questionnaires.
Price - compounded versions often cost between USD 300 and USD 500 per month, significantly cheaper compared to the USD 1300 list price. Many saw it as a way out: the same active ingredient for a fraction of the price. This created high demand for these alternatives.
However, patients are also victims: they had less oversight and potentially unsafe products (overdose incidents, variable quality). The FDA warned that such compounds have not been assessed for efficacy or safety and carry risks.
Government & regulators
As stakeholders in the sense that they are parties influenced: The FDA and state boards of pharmacy try to protect public health. The FDA was criticized for a slow response, but eventually took a clear stance against this practice and, in cooperation with Justice, started enforcing the rules in 2025. Politics has also become involved through hearings.
Impact on Novo & Eli Lilly: How much volume do Novo and Lilly lose due to Compounding?
The compounders made copies of both semaglutide (Novo’s product) and tirzepatide (Lilly’s). However, by far the majority of the copycat products involved semaglutide (Ozempic/Wegovy). There are several reasons for this:
Semaglutide was earlier widespread and better known. Ozempic has been on the market since 2018, Wegovy since 2021. The public and doctors became familiar with Ozempic as a concept. Tirzepatide (Mounjaro) only came mid-2022 and was initially only for diabetes (though much off-label use for obesity did happen). Compounders mainly capitalized on the hype around Ozempic for weight loss - Semaglutide was a known name, easy to sell to consumers. The term ‘Ozempic compound’ circulated, even though Wegovy is the obesity brand.
Price of Semaglutide were more pronounced: Wegovy was almost never reimbursed, making all obesity use cash-pay. This encouraged people to take cheaper compound alternatives. Mounjaro was partially reimbursed by insurers (for diabetes), and Lilly offered substantial coupons in 2022 and 2023. Therefore, the need for diabetes patients to seek illegal tirzepatide was smaller. They could get Mounjaro via insurance or coupon for USD 25.
Complexity: Tirzepatide is a larger, more complex peptide. It is possibly harder (or more expensive) to synthesize. Although Chinese labs offer it, semaglutide has probably been more widely available since it is a known molecule since 2017. This would lower the barrier for semaglutide compounds. Prices of compounded preparations reflected this: so-called ‘compounded tirzepatide’ injections were often more expensive than Semaglutide alternatives, but still cheaper than the branded Mounjaro.
Still, Lilly is not immune: tirzepatide was compounded on a large scale too. Lilly indicated tirzepatide was on the shortage list for 2 years, allowing compounding, and some pharmacies continued after the shortage ended in December 2024. Lilly filed lawsuits over this to for example Empower and Strive Pharmacy - who kept selling tirzepatide despite bans.
Interestingly, Lilly proactively tried to prevent compounding: they made deals with telehealth partners to halt compound sales. However, in June 2025 research showed some telehealths continued compounds by other means. Lilly responded with lawsuits. That Lilly used such contractual tactics suggests they already had influence over telehealth distribution of official Zepbound behind the scenes. They demanded: if you want to offer our product, then no more copycats. This shows Lilly’s management saw the problem and tried immediately to limit potential market loss.
Actions by Novo Nordisk and Eli Lilly to solve the problem
Both companies have taken unprecedentedly aggressive steps to tackle compounding, using legal, commercial, and educational approaches.
Novo Nordisk’s actions:
Legal battle: Novo has opened a true legal campaign. They started suing some compounders in 2023 and intensified this in 2024 and 2025. As mentioned, by August 2025 Novo had filed 132 lawsuits in 40 states. On August 5, they announced 14 new lawsuits against organizations illegally offering semaglutide compounds. They target both compounding pharmacies and telehealth companies.
Novo has had successes: courts issued 44 permanent injunctions against certain compounders. These prohibitions order them to stop unlawful compounding and misleading claims. Courts even forced offenders to hand over illegally earned profits, which serves as a deterrent to others. Novo’s strategy is to wear down the practice through litigation, and with results: dozens of providers had to cease operations.
Collaboration with regulators: Novo actively lobbies the FDA and state governments to encourage enforcement. They openly praise FDA warnings (for example, an FDA alert from July 29, 2025 about compound risks is cited in Novo’s press releases). Novo’s US VP Dave Moore urged regulators to enforce public health laws to protect patients. In sum, Novo exerts pressure in Washington and State Boards of Pharmacy to enforce strict actions.
Education and warnings: Novo runs a public campaign about risks. They emphasize that “patients deserve safe, effective treatments from trusted companies, and should not gamble with their health via counterfeit drugs.” This narrative is shared in press releases and likely through doctor visits. They have also instructed their salesforce to educate physicians and insurers about dangers of compounded drugs such as overdose and lack of quality control. Novo wants to keep trust in official medicines high and stigmatize compounds as potentially dangerous.
Commercial measures; own distribution & pricing: Novo recognized that one reason for compounds was high prices. In response, they launched the NovoCare Direct-to-Consumer platform in March 2025. Through this, patients without good insurance can buy Wegovy directly from Novo at a reduced rate. As of August 2025, Novo considered expanding this cash sales model to other markets. They also expanded cash-pay options in the US: early 2025 about 4% of Wegovy prescriptions were cash, now about 10%. Novo facilitates this with coupons or direct sales channels to lower the barrier and keep people away from compounders.
Additionally, Novo is ramping up production to prevent shortages. In H1 2023 supply constraints drove compounding; Novo invested heavily in new manufacturing capacity (including new plants in the US and Denmark, plus contract manufacturing) to meet demand and be able to say “there is no shortage, so you don’t need to use compounders.”
Novo said they might consider selling directly to patients outside the regular pharmacy. This is unusual, but the idea is if insurers won’t pay, let patients buy directly from Novo at a reasonable price - better to accept lower margin than lose the entire patient to compounders. This concept is being explored in 2025.
Eli Lilly’s actions:
Legal Steps (since 2023 / 2024): Like Novo, Lilly took the legal path. Initially, Lilly focused on compounding pharmacies. They filed cases against Empower and others for compounding tirzepatide. In April 2025, Lilly shifted focus to telehealth companies: on June 13, 2025, law firm Holland & Knight announced Lilly sued four telehealth firms for selling illegal copies of Mounjaro/Zepbound. Lilly argues similarly to Novo: misleading advertising, unfair trade practices, exploiting Lilly’s brand without a license. Lilly’s goal is clear: drag both compounding pharmacies and online referrers to court to stop them. Lilly admits legal proceedings can be lengthy but aims to send a message about the risks of large claims.
Collaboration & contractual intervention: Lilly chose a smart tactic by working with telehealth platforms on condition they cease compound sales. In June 2023, Lilly made deals with large platforms (like Ro, Calibrate, etc.) to distribute Zepbound/Mounjaro via them, provided no compounded GLP-1s were offered. This forced many telehealth companies to choose: cooperate with Lilly (access to official product and customer base) or continue with compounds but be cut off from official distribution. Some platforms agreed and stopped compounds in exchange for partnership. However, when it appeared some continued secretly (e.g., adding vitamin B12 to semaglutide and renaming), Lilly filed lawsuits in April 2025. Still, this shows Lilly actively engaged with the distribution chain.
Scaling official access: Like Novo, Lilly ensured official medications are easier to obtain. They ramped up Mounjaro production strongly in 2023, resolving shortages by year-end. This removes the need for compounders. After FDA approval of Zepbound in November 2023, Lilly made it quickly available through specialty pharmacies. They also work on broader insurance coverage for obesity (including trials for sleep apnea to reinforce medical necessity). The more patients helped formally, the less leakage to the grey market. Lilly also provides direct patient savings programs—for example, a direct-buy option for uninsured patients via a platform (with Anthem) at a reduced rate. This resembles Novo’s approach: setting up a controlled channel to divert price-sensitive consumers from illegal alternatives.
Outlook: Will compounding remain important in H2 2025 and 2026?
The compounding issue is now declining rapidly in the second half of 2025 and is expected to become marginal in 2026.
Thanks to the actions described, the heyday of large-scale compounding is over. The FDA has the legal basis to intervene. Deadlines in March/April 2025 forced most serious parties to stop, and since September 2025 the FDA has escalated with warning letters, seizures of illegal API shipments, and coordinated actions with the Department of Justice. In its November 5, 2025 Q3 report, Novo Nordisk stated that the impact of compounded semaglutide is now “materially lower than assumed three months ago” and that the company sees a clear path to the copycat market becoming negligible in 2026.
A full disappearance will still take a little more time. Driving factors — high list prices and pockets of uncovered patients — remain. A few rogue providers continue to seek workarounds (e.g., mixing semaglutide with vitamins and labeling it differently, or sourcing from overseas), and there will always be some “cowboy” clinics willing to take the risk for profit and patients willing to accept lower safety standards for a cheaper price.
For the mainstream market, however, the risk has become prohibitive: compounders now face active lawsuits from both Novo and Lilly, permanent injunctions, and FDA sanctions that include criminal referrals. Most large telehealth platforms and outsourcing facilities have exited the category entirely in Q3/Q4 2025. Novo and Lilly have also resolved all supply constraints, and both companies are heading into 2026 with the prospect of oversupply rather than shortage, removing the last legal and practical justification for compounding.
In H2 2025, Novo is already regaining patients faster than previously expected. US Wegovy scripts in September and October 2025 were the highest on record, driven in large part by former compound users switching to the branded product. The temporary patient drop-off that management feared in August has proven smaller and shorter-lived than anticipated.
For 2026, the legal, enforcement, and supply environment points to compounding becoming a fringe phenomenon rather than a material headwind. Remaining volume is likely to be limited to a small grey-market segment that both Novo and the FDA appear determined to extinguish through continued litigation and import controls. As a result, the base-case assumption for 2026 and beyond is that compounded GLP-1s will no longer be a meaningful drag on branded sales or pricing power.
US Pricing Situation – What can we expect?
In the U.S., there is a large gap between the list price which is the pharmacy price without discounts and the net price which is the manufacturer revenue after discounts. This results from the system involving health insurers and Pharmacy Benefit Managers (PBMs) who negotiate substantial rebates in exchange for placement on formularies. For diabetes medications (traditionally a competitive field), discounts can reach 50% or more. For new obesity medications, the situation differs somewhat: initially few insurers covered these drugs, so much of the sales were cash-pay without discounts. But that is beginning to change, with more insurers partly covering Wegovy in exchange for discounts.
Novo Nordisk’s CEO Lars Jørgensen noted that many Americans with insurance often pay only USD 25 out-of-pocket for Ozempic. The rest is paid by the insurer, which ultimately means Novo grants discounts to the insurer. Senator Sanders rightly pointed out this results in higher premiums - the costs do not disappear but are passed on elsewhere. But it illustrates that the USD 969 list price rarely fully reaches Novo per pen. Novo’s gross-to-net adjustment (discounts, returns, etc.) for the US is estimated by analysts to be around 30 - 40% for Ozempic. For Wegovy, it was lower initially because rebates and coverage were limited, but now that they are fighting for coverage, they offer significant discount deals.
An illustrative example: Suppose Ozempic’s list price is USD 969. After a typical rebate of about 50% for Medicare/commercial PBMs, the net price falls to USD 485. For Wegovy, which is less broadly covered, the net price may have been higher initially, but Novo had to make a deal in 2023 with Express Scripts (Cigna’s PBM) to include Wegovy in their formulary, undoubtedly at a substantial discount.
Additionally, Novo’s revenue mix in the US is about 72% revenue vs. about 50% volume, indicating net prices in the US remain higher than international levels, but not literally ten times higher.
What forces are at play?
It is unlikely federal legislation on pricing will pass in 2025 or 2026, as Congress is divided. However, administrative pressure - for instance, the FDA demanding more transparency or Medicare prioritizing GLP-1s - is certainly possible in the short term.
Inflation Reduction Act (IRA)
If Ozempic or Mounjaro rank among the top 15 Medicare drugs in 2026 and are older than 9 years (Ozempic will just be 9 years old in 2026), they could fall under negotiation in 2027 or 2028. This would force price reductions, potentially to about 40% of current price levels.
Lilly’s Mounjaro was only approved in 2022, so 9 years later is 2031. However, there is a chance tirzepatide might be considered a biologic, which grants 13 years of exclusivity. Tirzepatide is ultimately a peptide, so it might be classified as a small molecule (chemically synthesized) resulting in only 9 years exclusivity. Then Mounjaro would be eligible around 2031.
Specific obesity legislation
If the Treat & Reduce Obesity Act passes (uncertain chance), Medicare would cover obesity medications. Politically, this would only be acceptable with price limits (otherwise budgets would explode). Congress might then require lower prices or direct Most Favored Nation (MFN) pricing. Senator Bernie Sanders explicitly stated in hearings: “if Medicare reimburses, we demand MFN so Americans pay European prices.” This would be a more severe intervention and more than IRA which is negotiated and limited. Whether this is politically feasible remains unknown.
Import Tariffs - Trump scenario
The Trump administration could threaten or impose extra tariffs on imported pharma products under trade law (Section 232) as leverage. Novo’s products are mostly manufactured in Denmark. Trump recently threatened tariffs of 250%. Novo has recently invested in U.S. production capacity, mitigating tariffs largely, so the impact is estimated to be negligible.
How could Novo react?
When it comes to pricing, part of the price reduction will be borne by direct sales instead of sales to middlemen. Sales to patients through middlemen often come at very large discounts. By cutting out the middleman, the companies can sell the medicine cheaper to patients.
In addition, President Trump demands a pricing compared to other countries (mainly specifically targeting on Europe) and does not request a certain fixed price reduction. Therefore, the rest of the world will pay for US price reductions. There are several options for Novo to both live up to the agreement, which is hardly yet 100% contractually enshrined:
The world outside the US will pay more.,
Novo will not only move production but perhaps also research to the US if individual countries outside the US do not agree to increased prices.,
Several products may only be marketed in the US. Or Novo can launch other brand names in low-cost countries. This way, there is no basis for comparison to assess prices.,
Product modifications can occur, making it more difficult to compare products. The analogy is that a price guarantee only applies to 100% identical products that we know from other places.
We’ve seen above actions play out in reality during Q3 of 2025 when Eli Lilly announced price increases of Mounjaro in the UK in August 2025, from GBP 122 to GBP 330 per month for the highest dose of Mounjaro.
Regarding the import tariffs, Novo seems to be on the safe side as companies who manufacture in the US or are constructing a factory in the US are exempted from these higher tariffs. Novo is building a facility in Clayton, North Carolina and already has an existing plant in Clayton. Nevertheless it is not a guarantee, since these US facilities are mainly focused on filling and finishing and majority of actual GLP-1 production takes place in Kalundborg, Denmark.
Where does Novo focus on to regain market share?
Strategy IO
In addition to focusing on and accelerating R&D/pipeline for next-generation products, Mike Doustdar places great emphasis on growth in emerging markets.
Local production & partnerships
For example, in Africa, there is a collaboration with Aspen Pharmaceuticals to locally formulate insulin. This ensures market presence and goodwill under the “Made in Africa” concept.
Investments in Latin America and Asia
Novo invests in production facilities and supply chain capacity in these regions to quickly meet local demand and reduce dependence on imports (useful against, for example, tariff threats).
Improving accessibility
Novo has offered human insulin at low cost in poorer countries for many years. They might offer GLP-1s in dosed forms (e.g., half-strength semaglutide) at lower prices to maintain market share before generics arrive. This is speculative, but in India, Novo could license local companies or launch its own generic semaglutide once patents expire to keep market share.
Commercial expansion
Doustdar identifies global expansion in Asia and Africa as a strategic pillar. Novo is opening new offices and expanding the sales force in urban centers in countries such as China to ensure that as GLP-1s become more popular, Novo remains top-of-mind for physicians.
Tender strategy
For insulin, Novo already employs a two-track approach: introducing premium products (like the new insulin Icodec) so that older insulins can go generic without losing the entire portfolio. They will continue similar tactics for GLP-1s - for example, when semaglutide becomes generic in China, they plan to have an improved, patent-protected formulation to be preferred in public hospitals.
The emerging market focus described above is also partly risk diversification: less dependence on the US/EU markets. If by 2030 they serve millions of patients in Africa, India, and China (albeit at lower margins), they will have significant volume and relevance. Doustdar emphasized that by 2026 local production could cover 100% of Africa’s insulin demand - a principle they can later apply to GLP-1s.
They plan to compete with Lilly aggressively in the US market - for example, seeking exclusivity in PBM contracts for Ozempic in exchange for higher rebates. This means sacrificing margin but retaining market share. Although this is primarily relevant for the US, similar dynamics occur in the EU where some countries tender for a preferred GLP-1 (e.g., specific hospitals). Novo may have to offer semaglutide at a lower price to avoid being displaced on formularies by Lilly’s tirzepatide.
Novo stated they will sharpen commercial focus by:
Better segmenting which doctors and patients are not yet on GLP-1s and targeting them to prescribe semaglutide (to increase class share, of which they hold the largest portion).
Maximizing Wegovy rollout in new markets before Lilly arrives, securing early adopters for Novo and maintaining first-mover advantage.
Running marketing campaigns to sustain brand preference, since the Ozempic effect as a well-known name is a marketing strength.
Possibly expanding deals like co-pay assistance programs so patients stay on Novo products.
Maintaining and scaling production capacity remains critically important as well.
Strategy US
D2C
The U.S. market has seen innovative distribution strategies as Novo Nordisk and Lilly compete to get their drugs to patients. Novo Nordisk launched NovoCare Pharmacy in March 2025, a direct-to-patient fulfillment service for Wegovy. Through NovoCare Pharmacy, operated via Humana’s CenterWell Specialty Pharmacy, patients can receive home delivery of Wegovy with convenience services such as refill reminders and support coaches. Novo used this channel to introduce flat-cash pricing in response to affordability issues – offering self-paying patients Wegovy for USD 499 per month. Special short-term promotional pricing as low as USD 199 – USD 299 for the first month was offered in summer 2025 to entice new patients. Novo will bet heavily on this D2C platform for the near future.
CVS deal
To compete on access, Novo Nordisk and Eli Lilly have negotiated with PBMs. In a coup for Novo, CVS Caremark (a top PBM) updated its standard formulary effective July 1, 2025 to prefer Wegovy over Zepbound. This deal means millions of insured patients under CVS-managed plans will find Wegovy as the covered option for obesity therapy, whereas Lilly’s Zepbound might require higher copays or special authorization. CVS’s Prem Shah noted this arrangement will expand Wegovy access at a more affordable price for patients, implying Novo granted CVS significant rebates. Lilly’s CEO downplayed the impact of the CVS move publicly, but such formulary wins can tilt market share.
Express Scripts (Cigna’s PBM) and Optum (UnitedHealth) are also key gatekeepers – as of late 2024, most PBMs cover at least one GLP-1 for obesity, but many use step edits. In diabetes, Ozempic and Mounjaro are generally covered on par with other diabetes drugs, though their high cost means insurers often require patients to step through metformin and other classes first.
What top-line growth can we expect?
Looking at the current stock price and related PE, the market is extremely negative for the coming years. Let’s dive into the potentials and the market size to get some feeling around the revenue growth potential.
Period
The patents for Ozempic – for diabetes – and Wegovy – for obesity – are valid for the key markets until 2031/2032. Therefore, I will limit my analysis to a scenario up to 2030. For companies where patents are such an important part of the business model, everything beyond that period is purely speculative.
Diabetes Market – Past
First, let’s take a quick look back over the past period of the diabetes market and revenue:
Market: 463 million people had diabetes in 2019. This grew to 537 million in 2021 (strong growth of 7.5% per year). The expectation is that by 2030, 643 million people will have diabetes. That represents a growth of 2% per year.
Treated by Novo: Novo provides an annual overview of the number of people they treat. From 32.8 million in 2022 to 43 million in 2024. That is growth of about 7% per year – faster compared to the growth of the total patient population per year. This makes sense; they currently have an estimated 7.5% market share of the total TAM.
Total Global Sales TAM: 5% and 3% growth in 2020 and 2021. Then 25% and 17% growth in 2022 and 2023 due to the use of diabetes medicines for weight reduction. With the introduction of specific weight-loss drugs, this growth rate is not expected to continue in the future (although Ozempic remains an important brand linked to weight loss). Currently 523 billion DKK.
Novo Sales: Novo’s growth in DKK slightly outpaced market growth, although I expect that part of the 10% growth in 2021 already includes weight-loss sales. Sales in other years are roughly in line with the sales volume growth of the market.
Revenue per Patient: If we divide Novo’s revenue by their own reported number of treated patients, we see a limited growth of 5% in 2021 – indicating no visible weight-loss impact yet. After that, the estimated cost per person grows faster at 17%, 11%, and 12% per year – which in my view is driven by the weight-loss impact and therefore unlikely to be sustainable in the long term.
Diabetes Market - Future
Back to the future – what can we extrapolate, and what not? Let’s start with the expectation for the number of people with diabetes:
Novo bases its projections on research showing that 643 million people will have diabetes by 2030, representing a growth rate of 2% per year. I find this a reasonable basis to use.
Then, looking at the number of people treated by Novo: this is an important and reliable ratio to filter out weight loss sales from total sales. There has been about 5-6% growth in treated patients over recent years, with a spike of 11.5% in 2023. Given Novo’s strong track record in the diabetes market and their solid patent protection, I find it plausible to extend this 5% growth rate through 2030. This is higher than the 2% overall market growth, but part of this increase comes from reaching new patients. Currently, they serve an estimated 7.5% of the total TAM, which with 5% annual growth would increase to approximately 9% by 2030. In my opinion, this is quite achievable, leading to an estimated 57.6 million treated patients by Novo in 2030.
Revenue per Patient. This is a self-calculated ratio by dividing Diabetes Sales by the number of treated patients. The rate has increased significantly – which, in my view, is largely attributable to weight loss (since growth in 2021 was only 5% without weight loss). Because Wegovy will to a large extent replace Ozempic, this ratio is expected to decline. I take 2027 as a recalibration point – assuming that in 2025 and 2026 Ozempic volume will still be used for weight loss. I extend the 5% growth rate through to 2027, so my recalibration point is 5% growth from 2021, resulting in 4,384 DKK per person. For 2025 and 2026, I let the cost per person decline linearly to this figure in 2027. For the years after that, I assume only 2% growth due to the patent expiration.
This results in the following overview for Diabetes:
Obesity - Present
Market
According to studies that Novo refers, there are 934 million people worldwide with obesity. This number is expected to grow to 1.245 billion by 2030. That is growth of about 7% per year (!). Of those 934 million, only 2,2% (!) are currently treated with a Branded Anti-Obesity Medication (BAOM). A significant two-stage rocket; on one hand >97% of the market is still untapped, and on the other hand, it is a rapidly growing market. Very difficult to grasp!
Novo’s market share
57% market share in May 2025. However, underneath the surface, the figures are striking: market share declined from 80% in Q4 2024 to 57% in Q2 2025 – a reduction of 23%(!) in just one year!
The market is growing at absurd rates, with year-on-year growth above 100%, so there is still growth possible for Novo in absolute terms. Q4 2024 was the first quarter in which competitors added more revenue year-on-year than Novo.
This is clear at the product level as well. Outside the US, Ozempic was completely overtaken by Mounjaro in Q2 2025, dropping from 53% to 41% market share in just one quarter. In the US itself, from 54% down to 47%.
In the US, we see similar behavior for Zepbound compared to Wegovy; from 41% to 34% market share in just one quarter. Novo still holds 100% market share outside the US.
When both product categories are combined, we see that Lilly has taken over the market leader position in Q2 2025, with Novo at 44% and Lilly at 56%.
Revenue per Patient
Dividing revenue by the number of treated patients yields a Revenue per Patient of approximately DKK 37,000 per year, translated to circa EUR 400 per month.
Obesity - Future
All above results in the following assumptions for the future:
TAM of people with obesity grows by approximately 7% per year to reach 1.245 billion people, as stated in the research Novo refers to.
I conservatively increase the number of treated people at a very modest rate of 0.25% per year starting from 2026, eventually reaching close to 2% annual growth and nearly 25 million treated people by 2030.
I reduce Novo’s market share from 2026 to a flat 30% until 2030. For 2025 I assume a 35% market share, due to >50% market share in H1 2025 and expected <50% market share in H2 2025. This assumption includes rising competition from Lilly in the short term in the USA, new entrants in the medium term, and China dropping out due to patent expiration. This is obviously the largest and most important assumption!
Revenue per Patient I assume will decline to about 50% of the current cost by 2030. This is due to an increase in competitors and a standard reduction related to patent expiry. 2026 will show a bigger decline as a result of lower prices and an expected reduction in revenue for 2026.
This results in projected revenue of DKK 127.7 billion in 2030.
I expect there is no further upside in pricing, but there is certainly still upside in the number of treated people and market share in 2030. In my opinion, that is where the bull case could be.
Validation of expected Obesity market and market share
In September 2025, an article was published in the prestigious scientific journal Nature, which showed a graphic of the expected obesity market size and the expected market shares of Eli Lilly and Novo Nordisk. They defined the market as the sales of obesity drugs in 7 major markets, i.e. USA, Germany, France, Italy, Spain, UK and Japan and is based on market research from the company Clarivate Disease Landscape & Forecast. Based on this research I double checked my expected market size and volume for Novo.
Nature predicts a USD 43.5 billion or DKK 326 billion total revenue for the selected 7 markets in 2029. During my analysis I expect a total of DKK 406 billion global revenue, which therefore is in line with the article since the global sales of the deep dive will be higher compared to the expected 7 markets total sales.
When zooming into Novo’s expected revenue, Nature predicts a total of USD 20.6 billion or DKK 154 billion vs an expected DKK 122 billion sales for Novo in 2029 as a result of the deep dive. It confirms my conservative approach when it comes to Novo’s market share and as a result, however these Nature prediction is aged and it was predicted before the decline in prices. However, I’m still quite confident with the expected obesity revenue of Novo Nordisk in 2030.
Rare Disease – Short assumption
I have not looked deeper into Rare Disease for now. It has been almost stagnant over the past years, and therefore I have currently factored in 0% growth as a fixed value. It also accounts for only 6% of the revenue.
Overview Revenue – Present & Future
This all results in the following revenue projection per division and total revenue overall:
This all comes down on the following top- and bottom line until 2030
Total revenue in the scenario analysis reflects 310 billion DKK, which is mostly in line with the mid-range of Novo’s management guidance of 7% expected growth (DKK currency) for 2025. Therefore, I used 7% growth as my baseline for 2025.
Due to some more expected reduction of market share and reduced prices for Obesity in 2026, the expected revenue decline for 2026 will be 1.6% in my scenario, which is in line with the expectation of Novo for a low single digit decline. Currently Lilly has a better product and therefore I do expect a growth impact for next year.
Following years will be stable around 30% market share for Obesity – which in my opinion is a modest assumption – and therefore Novo will be able to take advantage of the growing Obesity market, even though prices will drop at the same time. This results in revenue growth between 6% and 10%.
Operating Profit
In the most recent guidance disclosed by Novo on September 11th 2025, an operating profit growth of 4-10% at CER, or (1)-5% at DKK, is expected for 2025. This lower guidance is a result of the personnel lay-off. Therefore, I took a 3% operating profit increase for 2025.
Tax
I expect tax rate will increase over time from 22% till 23.25% in 2030.
Net Profit & EPS
Net Profit will also decline from 33% in 2025 towards 31% in 2030, due to;
Tougher market circumstances in the US,
Lower Obesity pricing due to competition,
Additional depreciation due to increased capex spend.
EPS will increase faster compared to net profit due to continuation of share buyback program as of 2026.
Valuation feels very cheap - but is it true?
I think valuing a pharma company like Novo Nordisk is particularly challenging because I have to acknowledge how little I truly know and how unreliable my growth forecasts may turn out to be. Hence, I demand an extra-large margin of safety.
FiscalAi projects a Forward PE of 12.5 - while my own projection expects a Forward PE of 14.4 based on an expected 102.5 million DKK net profit in 2025 and a current stock price around 331 DKK. This feels like a bargain, but we will have to look at the Reverse DCF and DCF as the capital expenditures for Novo impacts the free cashflow significantly and have been increasing recently.
Valuation gap between Novo and Lilly
The valuation gap between Eli Lilly and Novo Nordisk is hard to ignore. Lilly is trading at 30 times next year earnings, while Novo sits around 14 times. Let’s put this another way - despite having very similar unit economics, if you were buying these companies outright, you could have two Novo Nordisk’s for the price of one Eli Lilly! However, Eli Lilly is increasing market share and Novo Nordisk is losing market share. I won’t be valuing Eli Lilly in this company, but the difference in P/E is remarkable.
Reverse DCF
For the Reverse DCF I have taken my growth assumptions I have explained earlier and have calculated the unlevered free cash flow by adding / deducting non cash items like depreciation and amortization and the cash outflows for capital expenditures and a change in Net Working Capital. I end up at DKK 48.3B for 2025 and DKK 53.1B for 2026. Last year this Unlevered Free Cash Flow hit DKK 60.2B. The huge decline towards 2025 is a result of an increase in capital expenditures by ~DKK 12.8B and the increase in operational expenses as a result of restructuring costs resulting in a lower EBIT margin. This is a one-time expense, however next year this upside is offset by lower pricing. Hence, it explains why the stock price decreased significantly.
This means as of 2025 the Free Cash Flow has to grow by 14.7% per year to get a 10% return. Everything depends a lot on how much capital expenditures Novo Nordisk needs in the future to grow their business. For 2026 I expect this will be reduced to DKK 51.7B, but obviously these numbers have high impact on the total valuation. So after all, the company doesn’t seem to be that cheap at all. If I take 2026 as year 1, with 53.1B as expected free cash flow, then it still needs a 13.25% annual growth to get a 10% return per year.
Discounted Cash Flow
For the Discounted Cash Flow I have entered my, what I think, conservative assumptions, which I have discussed earlier in the future sections of e.g. Diabetes and Obesity and which are for Obesity:
Market share of 30% as per 2026 and flat until 2030
People treated globally increasing with 72M per year
Percentage of patients treated globally growing by 0.25% per year as of 2026
Revenue per patient at 28.000 DKK for 2026 and 2027 and declining towards 18.000 DKK for 2030.
I have predicted the first five years till 2030 and then assumed an increase of 7.5% for the last 5 years.
The result shows an intrinsic value of 228.0 DKK which is 26% below the current stock price. As I think my assumptions are conservative this would be my conservative case but with all the unknowns around pricing, competitive pressure, patents expiring, high capital expenditures I think it’s fair to have a margin of safety.
If I take a more positive view on the Obesity market, and use the following assumptions:
Year 1 is 2026 instead of 2025 (as we are close to the end of the year)
Market share gradually decline to 30% in 2030 (instead of a direct decline towards 30%)
People treated globally increasing with 75M per year (instead of 72M)
Percentage of patients treated globally growing by 0.3% per year as of 2026 (instead of 0.25%)
Revenue per patient at 28.000 DKK for 2026 and 2027 and declining towards 18.000 DKK for 2030 (no change)
Capital expenditures declining from currently 19.2% of revenue for 2025 and dropping towards 17% of revenue in 2027, 14% of revenue in 2027 and then stable at 11% of revenue in 2028 - 2030
Growth rate after 2030 of 10%.
Then the intrinsic value is above todays stock market price. It’s important to realize that the impact of the capital expenditures is huge. If I wouldn’t have lowered the capital expenditures forecast, the intrinsic value still would have been lower versus current stock price. Hence, most important for investors to watch is the capital expenditures. How much does management need to grow the business in the future? It’s very difficult to predict this, but to compare with Eli Lilly they spend 11.2% of their revenue on capex in 2024 and are expected to spend ~12.6% on capex in 2025. So I feel more comfortable with the conservative approach and hence my buy below price is 228 DKK.
Investor Takeaway
Core Strength
One of the more unusual features of Novo’s structure is its ownership: the Novo Nordisk Foundation owns just 28.1% of the shares, but controls 77.3% of the votes through a dual-share structure. It allows management to focus on long-term innovation and sustainable growth instead of chasing quarterly earnings targets.
Novo Nordisk’s management has substantial insider ownership. Novo mandates that the CEO hold at least 3× their annual base salary in Novo Nordisk shares, and EVPs hold at least 1.5× their salary in shares. All executives meet or exceed these ownership guidelines.
Novo Nordisk distinguishes itself operationally through its fully integrated supply chain, allowing it to oversee all stages of production - from sourcing raw materials to delivering finished products. This end-to-end integration minimizes reliance on external suppliers and has been developed over years of organic growth, supported by complex and often costly acquisitions. Such vertical integration is a significant competitive strength, as manufacturing advanced biologics like semaglutide at scale demands unique expertise and capabilities that few competitors can match.
Although Eli Lilly currently has the better Obesity product on the market until mid-2026, Novo has been able to develop a competitor. CagriSema must compete with Tirzepatide (the already marketed Zepbound). CagriSema 2.4 mg has comparable (even slightly better) weight reduction compared to Tirzepatide, at 22.7% and 21.1% respectively.
But more importantly, Novo currently took the lead when it comes to oral obesity medications. Oral obesity medications are under investigation at both companies. Novo already has an advantage with Rybelsus, but it shows limited weight reductions of approximately 4–5 kg. Therefore, Novo has developed a Semaglutide 50 mg pill that achieves 17.4% weight reduction. Eli Lilly has developed an Orforglipron 36 mg pill, which in August 2025 showed a result of 12.4% weight reduction. Novo’s Semaglutide 25 mg has a weight reduction of 16.6%, has already been filed with the FDA, and results are expected in Q4 2025. Semaglutide 50 mg is nearly Phase 3 completed. Lilly expects to file with the FDA in Q4 2025.
Profitability? Still high with the first 9 months at 81.0%, however declining versus 84.6% for last year. Also operating margins are declining, at 41.7% for the first 9 months versus 44.7% last year.
Key Dependency
Production capacity. To meet increasing demand, ensure a stable supply and therefore avoid (legal) compounding situations, Novo Nordisk has continued to invest heavily in scaling up manufacturing capabilities. The acquisition of three fill-finish sites formerly run by contract and development manufacturer Catalent Inc., expands its production capacity in the United States, Belgium and Italy. It has also expanded existing production facilities in Denmark, France, Brazil and China and will significantly improve supply stability and increase output.
The ‘Big Three’ pharmaceutical wholesalers McKesson, AmerisourceBergen, and Cardinal Health are critical stakeholders of Novo Nordisk (and Eli Lilly). They purchase all medication for the US market and distribute them to retail pharmacies like CVS, Walgreens, Walmart, etc., mail-order pharmacies, and hospital pharmacies. Pricing is mainly determined by these parties. They basicly control the entire distribution chain of Novo’s medication in the US. It is of utmost importance of Novo to maintain perfect relations with them and improve their sales channel, especially post-compounding and because of the changing regulation environment in the US.
Top Growth Driver
There is only one answer to this; 934 million people worldwide have obesity. This number is expected to grow to 1.245 billion by 2030. That is a growth of about 7% per year. Of those 934 million, only 2,2% (!) are currently treated with a Branded Anti-Obesity Medication (BAOM). A significant two-stage rocket; on one hand >97% of the market is still untapped, and on the other hand, it is a rapidly growing market. Very difficult to grasp!
Main Risk
In all obesity segments, Novo was the market leader, but in recent quarters it has lost significant market share. Particularly notable is GLP-1 – with a drop from 56.1% to 51.9% in just one year – and Obesity – with a drop from 80% to 57%, also in just one year!
When we add together the revenues of Ozempic, Mounjaro, Wegovy, and Zepbound, Lilly took over the market leader position since Q2 2025 with a 56% market share – despite the fact that Zepbound is still hardly available outside the US and has negligible revenue in those regions.
At the same time, the market is growing with such high numbers, that even a drop in market share still results in revenue growth.
Novo has been hit hard by compounding – harder compared to Lilly. Novo has opened a true legal campaign. They started suing some compounders in 2023 and intensified this in 2024 and 2025. By August 2025 Novo had filed 132 lawsuits in 40 states. On August 5, they announced 14 new lawsuits against organizations illegally offering semaglutide compounds. Compounding is expected to wane in the second half of 2025 but not disappear completely - and its impact may still continue in 2026, although smaller.
The Trump administration could threaten or impose extra tariffs on imported pharma products under trade law (Section 232) as leverage. Novo’s products are mostly manufactured in Denmark. Trump recently threatened tariffs of 250%, but these were retoric as there is no pharma specific implementation so far. Novo has recently invested in U.S. production capacity, mitigating tariffs largely, so the impact is estimated to be negligible.
If the Treat & Reduce Obesity Act passes, Medicare would cover obesity medications. Politically, this would only be acceptable with price limits (otherwise budgets would explode). Congress might then require lower prices or direct Most Favored Nation (MFN) pricing. MFN pricing could reduce Wegovy’s price to around USD 200 – USD 300. Whether this is politically feasible remains unknown.
Biggest Unknown
I’ve stopped obsessing over whether Novo’s drugs deliver 23% weight loss or 25%. Novo is behind in product efficiency when it comes to marketed products, but both Novo and Lilly do have perfect products in final phases of research or submission to the FDA. The real value lies in how much of the significant (potential) obesity market it can capture - and that comes down to the scale, efficiency, strong management, and vertical integration of its operations. That’s why Novo has been pouring a lot of money into capital expenditures and expanding its manufacturing footprint and appointed Doustdar as new CEO due to his clear vision and track record of driving growth through strong execution and team building.
Biggest unknown is whether Doustdar (and his management team) will be able to turn the ship, since I expect that their results (whether positive or negative) will have a major impact. Another big question mark is how soon Novo can launch new patents on dual and triple agonist to be able to protect the obesity products well after 2032.
Final Conclusion
Novo Nordisk is, without question, a very high-quality business:
A 100-year-old foundation-owned structure that effectively removes short-term pressure.
Management with decades of tenure, personal ownership, and a proven capital allocation track record.
Vertical integration that is very difficult to replicate at scale.
A dominant position in diabetes (still growing) and the current #1 or #2 spot in the fastest-growing drug class in history (GLP-1).
Add the fact that >97 % of the global obesity population remains untreated, and you are looking at a legitimate multi-decade growth runway that very few companies ever get.
Yet, after a lot of work of Steven in putting this together, my personal conclusion is simple: I will not own the stock at current levels, and probably not at any realistic level in the coming years.
Why?Because pharma at this stage of the cycle is simply too binary and too dependent on variables I cannot forecast with any acceptable margin of safety:
Will Novo regain share with CagriSema, amycretin, or the oral 50 mg pill? Possibly, maybe even probably, but Lilly is not standing still either.
How fast will U.S. net prices collapse once Medicare potentially negotiates or the Treat & Reduce Obesity Act forces most favored nation pricing?
When exactly will CapEx peak and start declining as a percentage of sales? The difference between 19 % forever and dropping to Lilly-like 11–12 % is literally hundreds of kroner per share in intrinsic value.
Patent cliffs in China (2026) and eventually the rest of the world (2031–2032) are coming, no matter what.
Even in my bull case (30–35 % obesity market share held longer, faster CapEx normalisation, successful oral pill leadership), the stock is only fairly valued to slightly cheap today. In the conservative base case it is still meaningfully overvalued.
Quality investing is not about buying every great company — it is about buying great companies only when the price embeds a sufficient margin of safety against permanent capital loss. It’s one of the most important lessons for me this year.
At today’s ~14× forward earnings (and a reverse DCF that still requires 13–15 % perpetual FCF growth for a 10 % return), Novo Nordisk offers almost no forgiveness for the many things that can still go wrong.
The oral obesity pill could indeed be the catalyst that puts Novo back in the lead. New dual/triple agonists could extend the runway well beyond 2032. Mike Doustdar and the new team might execute flawlessly in international markets and turn the ship faster than anyone expects.
All of that is possible. But none of it is probable enough, in my view, to justify the risk/reward at current or foreseeable prices.
So yes, Novo Nordisk has been a textbook quality compounder the last years and Denmark’s best business ever, but it is just not an investment for me. Not yet, and maybe not ever.
If you have the risk tolerance for pharma mega-cycles and believe the obesity total adressable market will overwhelm all the risks above, Novo can still be a wonderful long-term holding.
That’s it…
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Disclaimer
The information in this article is provided for informational and educational purposes only.
The information is not intended to be and does not constitute financial advice or any other advice, is general in nature, and is not specific to you. Before using this article’s information to make an investment decision, you should seek the advice of a qualified and registered securities professional and undertake your own due diligence.
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Amazing
What a phenomenal write up and then interpretation and philosophy on the valuation and external factors!