(Bloomberg) -- The obesity-drug hype that fueled huge gains in Novo Nordisk A/S looks to be running out of steam.
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Novo shares fell as much as 4.6% to a seven-month low on Friday after a JPMorgan Chase & Co. analyst said the Danish firm’s third-quarter results may show slower-than-expected sales of its blockbuster weightloss drug Wegovy. The drop extended recent declines in the stock, which is now trading about 20% below June’s record high and has lost almost 1 trillion Danish kroner ($149 billion) in market value.
JPMorgan’s Richard Vosser, who still recommends investors be overweight Novo Nordisk shares, said in a note that the Danish company’s third-quarter report, slated for Nov. 6, “could cause some disappointment.”
Steady newsflow concerning potential rivals to Novo Nordisk’s weight-loss and diabetes drugs Ozempic and Wegovy has dented the investment case, said Soren Lontoft Hansen, senior analyst at Sydbank, in emailed comments. He added that the recent release of disappointing data from Novo’s pipeline weight-loss pill monlunabant, published on Sept. 20, hasn’t helped.
Novo’s recent stock-market struggles are in contrast with its biggest obesity-drug rival, US firm Eli Lilly & Co. While Eli Lilly’s closest Wegovy and Ozempic rivals, Mounjaro and Zepbound, arrived after Novo’s offering, momentum for the treatments has been building gradually. Novo is however still Europe’s most valuable firm, with luxury conglomerate LVMH in second place.
Second-quarter sales for Wegovy also disappointed, and its August earnings sent shares 6.7% lower in one day, its biggest drop in two years.
--With assistance from Sara Sjolin and Joe Easton.
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