Novo Nordisk Shares Face Mounting Pressure Amid Clinical and Commercial Setbacks

Once a celebrated darling of the equity markets, Danish pharmaceutical leader Novo Nordisk is navigating one of its most challenging periods in recent memory. Investors are left assessing the damage, questioning whether this represents a painful but temporary correction or a fundamental break in the company's long-term growth narrative.

Beyond its research disappointments, Novo Nordisk is engaged in a fierce commercial battle, particularly in emerging markets. In a strategic move to regain lost ground, the company is preparing to launch its diabetes drug Ozempic in India this month. This initiative is a direct response to the overwhelming market dominance established by its chief rival, Eli Lilly.

Eli Lilly's product Mounjaro surged to the top of the Indian market in October, with 262,000 doses sold. In stark contrast, Novo Nordisk's Wegovy trailed significantly with only 26,000 units sold. The strategic importance of India is underscored by its status as home to the world's second-largest population of type-2 diabetics, after China, making it a critical battleground the Danish firm is determined not to cede.

Alzheimer's Hopes Dashed at San Diego Conference

The immediate focus for the investment community has been the CTAD conference in San Diego. There, Novo Nordisk disclosed the disappointing outcomes from its Phase 3 trials, EVOKE and EVOKE+. The high-stakes hope that the drug semaglutid could slow the progression of early-stage Alzheimer's disease by at least 20 percent has not materialized.

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

The studies, which involved nearly 3,800 participants, did show improvement in certain biomarkers. However, the crucial clinical benefit for patients was not achieved. For a share price already under substantial strain, this outcome serves as a further confirmation that semaglutid is not a universal therapeutic solution for all neurological conditions.

Valuation Plummets Amid Structural Headwinds

The cumulative weight of these challenges is reflected in the company's stock performance. Since the start of the year, the equity has lost over 52 percent of its value, trading perilously close to its 52-week low. Alongside clinical setbacks, structural issues are pressuring profitability.

• U.S. Pricing Agreement: A recent settlement with the U.S. government compels the company to drastically reduce prices for its GLP-1 medications—from a previous high of up to $1,000 to as low as $150 per month in some cases.
• Patent Expiry Concerns: In India, patent protection for semaglutid is already set to expire in March 2026, paving the way for lower-cost generic alternatives.

The market has delivered a harsh verdict despite solid third-quarter revenue figures. The company's valuation has been severely downgraded: the price-to-earnings (P/E) ratio, which stood above 30 a year ago, has now collapsed to approximately 12. This dramatic compression clearly signals that investors are fundamentally reassessing the firm's growth prospects and pricing power. Whether the expansion into India and the remaining drug pipeline can restore investor confidence will be tested in the coming months.