London, 25 October 2026 — EBM Weekend Read — By Nick Staunton
Two years ago, Novo Nordisk was the most valuable company in Europe. Its weight-loss jab Wegovy and diabetes drug Ozempic were so sought after that shortages spread around the world, celebrities talked openly about using them, and the company’s growth was big enough to move Denmark’s entire economy.
Today the picture is very different. Novo’s shares are down about a third over the past year, while American rival Eli Lilly’s are up more than half. Cheap generic copies are flooding into India and Canada. In February the company warned that sales would fall this year for the first time in decades. EBM has charted the scale of that meltdown before. The question now is different: can Novo fight back? Its answer is a small daily pill.
How the Lead Was Lost
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SubscribeNovo’s problem was never demand. Obesity drugs are one of the biggest commercial opportunities in the history of medicine, with Wall Street forecasting a global market of $100bn to $150bn by 2030. The problem was that it stopped being the only option.
Eli Lilly’s rival drug, sold as Mounjaro and Zepbound, produced greater weight loss in trials and won over doctors in America, the world’s most lucrative market. Novo struggled to make enough Wegovy at the peak of the boom, and in the US, pharmacies stepped in to sell cheaper “compounded” copies. A next-generation Novo drug, CagriSema, disappointed investors when its trial results fell short of expectations.
The company’s chief executive, Mike Doustdar, now concedes the point. “Eli Lilly has been gaining market share,” he said in August. “And they’re more diversified than Novo Nordisk.” Obesity and diabetes account for about 90% of Novo’s business, against about 60% at Lilly. Novo has even taken its rival to court over advertising claims, a move EBM argued shows a company that knows it is losing.
The Price Squeeze
The other threat is price. Under pressure from Washington, Novo and Lilly have both cut the US prices of their drugs. The pressure on European drugmakers from the Trump administration is part of a wider pattern, as seen in Washington’s threats over Europe’s Starlink restrictions. Lower prices were supposed to unlock far more patients. So far, volume growth hasn’t made up for the lost revenue.
In February, Novo warned that 2026 sales and operating profit would fall by between 5% and 13%, and its US-listed shares dropped almost 15% in a day, according to MarketScreener. It has since narrowed that forecast to a decline of about 3%, but investors remain unconvinced.
The Generic Flood Begins
The deeper long-term threat is patent expiry. Semaglutide, the active ingredient in Wegovy and Ozempic, lost its patent protection in India and China in March. In India, at least a dozen generic manufacturers launched within days, with the cheapest versions selling for around a quarter of Novo’s price. In Canada, Dr Reddy’s launched a copy in May at roughly half Novo’s list price.
China has not yet approved any generics. Novo says its data protection there runs until April 2027, but more than ten companies are waiting. In the US and Europe, key patents run until the early 2030s.
This is a familiar story. Chinese manufacturers already dominate global markets from solar panels to electric cars, and their growing export machine is likely to extend to cheap weight-loss drugs. When that happens, the price of semaglutide around the world will fall sharply.
The Pill That Could Save Novo
Novo’s comeback plan rests on a tablet. In January it launched an oral version of Wegovy in the US, the first obesity pill on the market. The launch has been a genuine success. Doctors have written more than five million prescriptions, about 1.5 million patients now take it, and it generated about DKK 5.5bn (roughly $843m) in sales in the first half of the year. Doustdar has called it the best pharmaceutical launch in history.
Pills matter because many patients dislike injections, and tablets are cheaper to make and distribute at scale. They already account for about a third of US obesity prescriptions, and Novo holds more than 80% of new oral prescriptions. Doustdar believes pills could capture up to half the global market by 2030. Crucially, he says patents on the pill’s delivery technology protect it from generic copies into the mid-to-late 2030s, years longer than the injection.
The catch is that Lilly has a pill too. Its trials showed less weight loss than Novo’s, around 12% against 17%, but the two drugs have never been tested head to head, and Lilly has a formidable sales machine.
The New Strategy
At its capital markets day in September, Novo set out a plan to launch more than five “multi-blockbuster” drugs by 2030 and reach sales of more than DKK 150bn (around $23bn) by 2035, CNBC reported. It also signalled it would use acquisitions to expand into liver, cardiovascular and rare blood diseases.
Investors were unimpressed. The shares fell almost 8%, their worst day since February. Doustdar admitted there was “still some work to do in convincing some of the investors.”
The weight-loss boom has also had effects well beyond pharma. Sugar prices hit a five-year low as demand fell, and food companies have had to rethink their products for a generation of patients who simply eat less.
Where I Land
Novo Nordisk is not finished, but its era of near-monopoly is over. Like De Beers in diamonds, it built an extraordinary business on a product nobody else could match, and it is now learning how quickly that advantage fades when competitors and cheaper alternatives arrive. The Wegovy pill is a genuine success and gives Novo a real chance to lead the next phase of the market. But it is competing against a stronger, more diversified Lilly, and against a global flood of cheap generics that will steadily push prices down. For Europe, which has too few global champions of its own, the stakes are high. Novo’s best outcome is no longer dominance. It is to become one strong player in a crowded, cheaper market, and to use its pill to buy time to find its next breakthrough.
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