Ozempic And Wegovy Maker Cuts Outlook In Surprise Move, Picks New CEO
Novo Nordisk A/S (NYSE:NVO), the Danish pharmaceutical giant renowned for its weight-loss drug Wegovy and diabetes treatment Ozempic, experienced a significant downturn on Tuesday following the company’s decision to trim its 2025 financial outlook.
This marks the second time this year the company has revised its guidance downwards, signaling growing headwinds in key markets. Novo Nordisk now projects 2025 sales growth to be in the range of 8-14% at constant exchange rates, a notable reduction from its earlier forecast of 13-21%.
Similarly, the outlook for operating profit growth has been lowered to 10-16% from the previously anticipated 16-24%. This revised guidance largely stems from a slower-than-expected penetration of its branded GLP-1 treatments, particularly in the United States, a market increasingly impacted by the persistent use of compounded GLP-1 alternatives.
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The company specifically cited lower growth expectations for Wegovy in the U.S. obesity market and for Ozempic in the U.S. GLP-1 diabetes market. Furthermore, Wegovy’s penetration in certain international markets has also fallen short of expectations, attributing to slower market expansion and heightened competition.
In May, Novo Nordisk already lowered its 2025 guidance, reflecting lower-than-planned penetration of branded GLP-1 treatments in the U.S., impacted by compounded GLP-1s.
Despite the expiry of the FDA’s grace period for mass compounding on May 22, 2025, Novo Nordisk asserts that unsafe and unlawful mass compounding has continued unabated. The company’s market research indicates that numerous entities persist in marketing and selling compounded GLP-1s under the guise of “personalization,” directly impacting Wegovy’s penetration within the cash payment channel.
In response, Novo Nordisk has launched NovoCare Pharmacy in March 2025, which has facilitated approximately 11,000 total weekly Wegovy prescriptions, alongside an additional 20,000 weekly prescriptions in the broader retail cash channel.
In the insured channel, new commercial initiatives for Wegovy launched in the first half of 2025 have not fully offset the slower market expansion and competitive pressures, leading to lower-than-anticipated penetration.
To counter these challenges, Novo Nordisk is actively pursuing multiple strategies, including litigation, to safeguard patients from what it terms “knockoff ‘semaglutide’ drugs.” This comes amid a broader industry concern, highlighted by a recent letter from over 80 bipartisan U.S. congressional members to FDA Commissioner Marty Makary, urging the agency to curb the proliferation of counterfeit and copycat GLP-1 drugs.
On a more positive note, Novo Nordisk anticipates a beneficial impact from changes to CVS’s national template formulary, effective July 1, 2025, where Wegovy is now the sole GLP-1 medication covered for obesity. The company also continues to invest in commercial activities and label updates to enhance Ozempic’s market penetration, despite increased competition in the U.S.
Internationally, while Wegovy sales are experiencing robust growth rates and launches are progressing, the revised outlook reflects lower-than-expected penetration in select markets due to slower expansion and competition.
For the first six months of 2025, Novo Nordisk reported an 18% increase in sales and a 29% rise in operating profit at constant exchange rates. These figures were positively influenced by gross-to-net sales adjustments related to prior years, including a significant adjustment of approximately $450 million (3 billion Danish kroner) in the second quarter of 2025 pertaining to the 340B provision. Operating profit growth also benefited from the reversal of an ocedurenone impairment in the second quarter of 2024, partially offset by impacts from the acquisition of three Catalent manufacturing sites.
The company’s free cash flow is now expected to be in the range of 35-45 billion Danish kroner, a revision reflecting the lower projected sales growth, primarily driven by reduced volume growth of GLP-1-based treatments in the U.S. and associated cash flow implications, further amplified by the intricacies of the U.S. gross-to-net system.
In a key regulatory development, Novo Nordisk expects a regulatory decision regarding the Wegovy Metabolic Dysfunction-Associated Steatohepatitis (MASH) indication during the second half of 2025, which could potentially open up a significant new market for the drug.
Leadership Transition
Adding to the day’s significant announcements, Novo Nordisk also revealed a leadership change. Maziar Mike Doustdar has been appointed as the new president and chief executive officer, effective August 7, 2025.
Doustdar, currently Novo Nordisk’s Executive Vice President of International Operations, will succeed Lars Fruergaard Jørgensen, who will be stepping down from his role.
Price Action: In premarket trading on Tuesday, Novo Nordisk’s stock plummeted 18.5% to $56.21, reflecting investor apprehension regarding the revised financial projections and the ongoing challenges posed by the compounded drug market.
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