Novo Nordisk Faces Dual Challenges as Alzheimer Trial Fails and Price Wars Intensify

Novo Nordisk finds itself navigating significant headwinds. The Danish pharmaceutical giant, already contending with rising competition in the lucrative weight-loss injection market, has been dealt a substantial setback this week with the failure of its hoped-for expansion into Alzheimer's therapy. Concurrently, the company is aggressively pushing into emerging markets, a strategy now marked by steep price reductions.

The competitive landscape in India is heating up dramatically for Novo Nordisk. According to Reuters, the company is preparing to launch Ozempic in the country this December. This move comes in a rapidly intensifying market where rival Eli Lilly has already established a strong foothold; its drug Mounjaro, launched in October, has become India's top-selling medication with 262,000 doses sold. This figure starkly overshadows the mere 26,000 units of Novo's Wegovy sold there.

In response, Novo Nordisk recently slashed Wegovy prices in India by up to 37%. The firm also announced a collaboration with the Indian health-tech startup Healthify, which will use AI-powered services to support patients in weight management. The urgency is clear: the Semaglutid patent expires in India in March 2026. At that point, generic drug manufacturers are expected to flood a market located in a country with the world's second-highest number of Type 2 diabetes patients, after China.

Major Setback in Neurological Drug Development

Hopes for a new therapeutic avenue in Alzheimer's disease have been dashed. At the Clinical Trials on Alzheimer's Disease conference in San Diego, Novo Nordisk presented detailed results from its EVOKE and EVOKE+ studies. The conclusion was definitive: the drug Semaglutid (marketed as Rybelsus) failed to slow cognitive decline in nearly 4,000 elderly patients with mild cognitive impairment or early Alzheimer's disease.

Over a two-year period, the medication showed no statistically significant improvement compared to a placebo. Only moderate improvements of around 10% were observed in certain biomarkers for inflammation and neurodegeneration—a result insufficient to constitute a breakthrough.

Should investors sell immediately? Or is it worth buying Novo Nordisk?

"This is not what we had hoped for," acknowledged Dr. Peter Johannsen, Novo Nordisk's Vice President of Medical Affairs. The company has not ruled out further research into earlier disease stages or other forms of dementia but currently has no concrete plans to announce.

Market Analysts Express Caution

Wall Street has reacted with skepticism to these developments. Several prominent firms have revised their outlooks downward. Goldman Sachs reduced its price target from $60 to $54, while BMO Capital Markets cut its target from $50 to $46. Morgan Stanley maintains an "Underweight" rating on the stock with a $42 price target. The overall analyst consensus currently stands at "Hold."

Institutional investors are adjusting their holdings accordingly. Beacon Pointe Advisors, for instance, reduced its stake in Novo Nordisk by 67.5% during the second quarter. The company's shares have declined approximately 45% since the start of the year.

A potential bright spot exists in the company's development pipeline. In January, a registration trial is set to begin for the obesity drug CagriSema in children and adolescents aged eight and above. The study aims to enroll 460 participants across 97 centers worldwide.