TD Cowen said Novo Nordisk could face further pressure going forward due to increased competition and looming patent risks for semaglutide. The bank downgraded the pharmaceutical stock to hold from buy. Analyst Michael Nedelkovic also lowered his price target to $42 from $45, implying an upside of just 6%. Novo Nordisk’s stock price has been struggling of late. It’s down 22% this year and 50% over the past 12 months. NVO 1Y Mountain NVO 1Y Chart Nedelković said Novo Nordisk was not prepared to slow down the loss of exclusivity for semaglutide. While the Wigovy tablets are a catalyst, he noted that its potential won’t completely correct the situation, especially when considered in conjunction with the delayed Ozempic regimen and Novo Nordisk’s Kaglisema trials, which have either failed or been disappointing. Kaglisema is a treatment being developed by Novo Nordisk that aims to provide more effective weight loss results compared to semaglutide. “NVO is an innovative company and deserves considerable credit for unlocking the potential of the obesity market. However, the business faces major challenges, first with brand competition and second with semaglutide LOE, and it is no longer clear that the pipeline can meet that demand,” Nedelkovic wrote. “Kagrisema, amicretin, and diltibekimab all have meaningful potential, but together they do not create a convincing post-Sema trajectory.” Novo Nordisk’s semaglutide patent is secured through 2032, but expires in several countries later this month. Nedelković also believes that Novo Nordisk’s semaglutide patent expiration could start to weigh more on investor sentiment this year. While GLP-1 formulations are likely to decline, analysts predict that brand competition will intensify. “Unfortunately, to the most insensitive eyes, the success of the Wegoby pill only creates a gaping hole that will be filled in the not-too-distant future,” he wrote. “For the Wegobee franchise, rising cash-paying markets and falling net prices may dampen the impact of patent expirations in the future, but it is unclear whether a longer, more gradual decline into the 2030s will be viewed more favorably by investors.” The analyst added that Novo Nordisk faces intense competitive pressures, making it increasingly unlikely that the company will maintain a duopoly in its diabetes and obesity treatment businesses.
