A U.S. ban on copycat versions of Novo Nordisk’s (NOVOb.CO), opens new tab Wegovy has begun to lift use of the weight loss drug, but the company will need to show more robust growth in the months ahead to bolster market confidence, investors and analysts say.
New Wegovy prescriptions have increased by about 33% since May 22, when a U.S. Food and Drug Administration ban on so-called compounded versions of Wegovy took effect, amounting to 181,200 in the week ended July 18, according to data from IQVIA that was shared with Reuters by industry analysts.
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Total Wegovy prescriptions have also increased, narrowing the lead for Eli Lilly and Co’s (LLY.N), opens new tab Zepbound. In the week ended May 23, U.S. Zepbound prescriptions exceeded Wegovy by nearly 175,000. By July 18, the gap was about 133,000.
Early signs of a shift come at a critical juncture for Novo. After Wegovy’s initial stunning success, investor confidence was rattled when Zepbound and compounders started to slow the drug’s growth. And then in May, the Danish company cut its full-year sales and earnings forecasts and announced the surprise exit of Chief Executive Lars Fruergaard Jorgensen, citing market challenges and a stock price nearly 60% below its 2024 peak.
Jorgensen said at the time he expected the FDA compounding ban to lift sales in the second half of this year. Investors are keen to hear whether that is still likely when the company reports quarterly earnings on August 6.
That leaves the drugmaker in what Barclays analyst Emily Field called a “show me” phase – no longer buoyed by optimism about a turnaround but under pressure to deliver. She has an “overweight” rating on Novo’s shares.
“We thought this trajectory change (in new prescriptions) would get the shares moving, but not so far,” Berenberg analyst Kerry Holford told Reuters. “I suspect investors are now waiting for the (second quarter) update – will they/won’t they trim guidance range? I think they will trim the top.” Berenberg has a “hold” rating on Novo.
Novo did not respond to a request for comment.
Investors and analysts note that the IQVIA prescription data is incomplete, because it does not capture sales of Wegovy through the company’s direct-to-consumer platform, NovoCare, launched in March. They estimate the channel is still a small slice of overall Wegovy volume.
“We would hope to see strong growth from the NovoCare channel but are cognizant that this may come at initially lower prices” due to discount offers, said Marcus Morris-Eyton, a portfolio manager at Alliance Bernstein, whose fund holds Novo shares.
“Sentiment towards Novo Nordisk is currently exceptionally weak, but given low expectations, the low valuation and hopefully accelerating prescription data in (the second half of 2025) we believe the market is underestimating Novo’s long term growth potential,” he said.
BRINGING BACK PATIENTS
Booming sales of Wegovy catapulted Novo to become Europe’s most valuable listed company, peaking in June 2024 at about 615 billion euros, after the weekly injection became the first highly-effective obesity treatment approved in the U.S. in 2021.
