Novo Nordisk Faces Mounting Legal and Market Pressures

The pharmaceutical giant Novo Nordisk, once a dominant force in its sector, is confronting a series of significant challenges. A recent ruling from its home country of Denmark has intensified investor anxiety, adding to existing pressures from steep stock declines and fierce price competition. The Danish Patient Compensation Board has officially approved damages for patients who suffered blindness linked to the company's blockbuster GLP-1 drugs, raising the specter of unpredictable litigation.

The decision from Denmark is seen as a major boost for plaintiffs in the United States, where complex multidistrict litigation (MDL) is already underway. These lawsuits allege that Novo Nordisk failed to adequately warn patients and physicians about the risk of vision loss associated with medications like Wegovy and Ozempic.

Market observers have labeled the Danish ruling a "public relations nightmare" and a "gift for US attorneys." The core concern is that this official state-backed confirmation of a "probable causal link" between the drugs and NAION—a condition that can cause sudden blindness—could substantially shift the burden of proof against the company in the far more costly US legal arena. This development is particularly damaging as it follows a mandate from the European Medicines Agency (EMA) in June for updated warning labels.

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

A Perfect Storm of Corporate Challenges

The new Chief Executive, Maziar "Mike" Doustdar, who took leadership in August, is navigating a perfect storm of corporate crises. The company is battling on multiple fronts:

• Aggressive Price War: To defend market share against competitors such as Eli Lilly, the US price for Wegovy was slashed to $349.
• Cost-Cutting Measures: A substantial reduction in force, targeting 2,000 employees, is being implemented to lower operational costs.
• Eroding Investor Confidence: The stock has been in a persistent downtrend for months.

The financial data underscores the severity of the situation. Having shed over 52% of its value since the start of the year, the share price is now hovering just above its 52-week low of 39.05 euros. The technical chart outlook remains bleak, and analysis from firms like Jefferies has led to sharply reduced price targets.

While the compensation awarded to the four patients in Denmark is a manageable financial sum for the pharmaceutical behemoth, the legal precedent it sets carries immense weight. Investors are now closely watching how the US market reacts to this official validation of health risks, with the level of uncertainty surrounding Novo Nordisk reaching a new peak.