A Novo Nordisk stock tumble
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Why did Novo Nordisk's stock tumble by 17%?
Novo Nordisk's value dips as sales shrink. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. I'm Guy Kilty. Good morning. Shares in the Danish pharmaceutical giant Novo Nordisk tumbled 17% on Wednesday after the pioneer of weight loss drugs warned of a decline in sales this year amid increasing competition and pressure on prices. The firm said its outlook has been hit by rival weight loss drugs and the expiry of patents on the active ingredient in its Wegovi and Ozempic drugs in some markets. Novo has lost two-thirds of its stock market value since June 2024, a fall of more than $400 billion. My colleague Leanna Byrne has been speaking to Novo Nordisk's Chief Financial Officer, Carsten Knudsen, and she started by asking about the challenges facing the company.
What I'm looking into in 26 is really driving volume growth. Prices are coming down in obesity and we're accessing more self-paid patients. And as a consequence, we really need to see patient volumes coming up.
I'm going to ask you first about the cheaper versions of semaglutide.
What challenges is Novo Nordisk facing from competitors?
It's going to start appearing in markets like India and China this year. So how much of your international revenue is realistically at risk from generics over the next two to three years?
Our patent expires in India in a few months' time, and it also does so in China. In China, though, there are certain regulatory complications or technicalities that means that I don't expect biosimilars to enter the market until 2027, whereas in India there will be competition. We expect a 2% impact on group sales for this year linked to a generic impact in a few international operations markets.
I guess if patients can buy much cheaper versions of Ozempic or Wegovi, why should they stay with Novo?
So I'm sure a lot of patients, they would prefer to access well-known brands. But of course, with price competition and conversion in pharmacies and the like, there will be a price competition. So we will also be having tactics, including launching second brands, of semaglutide at different price points. So we are going also head to head on pricing with the generic entrance.
Yeah, let's talk a bit more about pricing. You've cut prices in the US and that's to expand access, isn't it? But it is hitting profits. So how much further can prices realistically fall before the economics stop working for you?
It is a price sensitive market when it's self-pay. And given the magnitude of the market in terms of unmet need and patient numbers, We believe it's rational to work on pricing. Also, in terms of the headroom we have, I would say we have a world-class manufacturing setup which is very, very competitive in terms of delivering low unit cost for what we produce.
Liana Byrne there speaking to Novo Nordisk's Chief Financial Officer Carsten Knudsen. Let's do the numbers. Walmart has become the first traditional retailer to hit a $1 trillion market valuation. Its share price has almost doubled in the last 12 months, thanks to the success of its e-commerce platform and higher earners in the US trading down to lower-priced items. Meanwhile, Eurozone inflation slowed to 1.7% in January. The United States has renewed an agreement that gives 32 African countries duty-free access to the US market. The Africa Growth and Opportunity Act was allowed to expire last September after 25 years. It's now been re-authorised until the end of this year. The US Trade Representative Jameson Greer said he would work with Congress to update the programme to gain more access to African markets for American farms and businesses.
The Prime Minister of Spain says he intends to ban social media for under-16s.
How is Novo Nordisk responding to the rise of generic drugs?
Australia became the world's first country to bring in a similar ban last year. France, Denmark and Austria have also announced they're considering their own national age limits. Let's get more on this from Madrid with our Spain correspondent Guy Hedgcoe. Hi Guy. Hello there. So just give us the details of what the Spanish Prime Minister has actually said.
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