Novo Nordisk Revises Profit Forecast Amid Growing Competition

The Danish pharmaceutical giant, Novo Nordisk, known for its diabetes and obesity treatments Ozempic and Wegovy, has once again revised its sales and profit projections downward. This adjustment reflects the company’s struggles to keep pace in an increasingly competitive market.

Mike Doustdar, who assumed the role of CEO in August, explained that the company’s revised guidance stems from "the lower growth expectations for our GLP-1 treatments." In a video message accompanying the announcement of the third-quarter results, Doustdar acknowledged the heightened competition in the marketplace, stating, "The market is more competitive than ever."

Novo Nordisk's latest forecast indicates that it now anticipates an operating profit growth of a maximum of 7% for the full year 2025. This is a significant drop from the previous estimate of up to 16%. Furthermore, the company expects sales to increase by no more than 11% at constant exchange rates, down from an earlier projection of up to 16%. This marks the fourth time this year that Novo Nordisk has adjusted its forecasts.

In the third quarter, Novo Nordisk reported sales of 75 billion Danish kroner (approximately £8.9 billion), which represents a 5% increase compared to the previous year. However, this figure fell short of analysts' expectations, which were set at 76.2 billion kroner. The company also reported an 11% growth in sales during the same period.

Recently, Novo Nordisk experienced a significant shake-up in its leadership. In a surprising turn of events, the company announced that its chair, Helge Lund, along with six other board members, would be stepping down following a dispute with its majority shareholder. This leadership transition comes on the heels of the earlier announcement that Lars Fruergaard Jørgensen would be resigning as CEO.

As Novo Nordisk navigates these challenges, it is also engaged in a competitive pursuit of the US obesity-focused biotech firm Metsera, going head-to-head with Pfizer. In late October, Novo Nordisk made headlines with a surprise bid of $9 billion (£6.9 billion), aimed at outmaneuvering Pfizer’s existing offer. Both companies have since submitted enhanced proposals as they vie for dominance in the lucrative weight-loss market.

In a notable development, Pfizer sought a temporary restraining order in a US court to halt Novo’s bid for Metsera, but a Delaware judge denied this request. A subsequent hearing is scheduled for Wednesday, underscoring the legal complexities involved in the takeover battle.

Metsera has attracted attention due to its promising pipeline of obesity drugs, which includes four ongoing clinical trials. These trials feature a weight-loss pill, a monthly injection, and two drugs designed to enhance the sensation of fullness. This makes Metsera a highly sought-after target in the pharmaceuticals industry.

Derren Nathan, head of equity research at Hargreaves Lansdown, commented on the situation, stating, "Novo Nordisk’s CEO Mike Doustdar’s first set of results in the hot seat have come with slimmed-down guidance for the full year. Hardly an ideal start but better for him to cut now while fingers can still be pointed at legacy issues." He further emphasized that the stark contrast between Novo’s results and the impressive third-quarter performance of its rival Eli Lilly highlights the challenges Doustdar faces in steering the company toward recovery.

This year has been a tumultuous one for Novo Nordisk, with its share price halving amidst these developments. Despite the challenges, Novo Nordisk remains one of Europe’s largest companies, continuing to navigate a complex landscape in the pharmaceuticals industry.

As Novo Nordisk confronts these multifaceted challenges, the company's ability to adapt and innovate will be crucial for its future. With leadership changes, competitive pressures, and a shifting market landscape, the coming months will be pivotal in determining the direction of this influential player in the pharmaceuticals industry.