Bad study results for blockbusters cagrisema (symbol image, photo: frepik, Mohammadhridoy_11)
The Novo-Nordisk share has been very popular in recent years. At the latest with the breakthrough of the GLP 1 medication Wegovy as a weight loss, Novo Nordisk was one of the largest winners of the stock market.
The IPO of the Danish pharmaceutical giant could almost double within a year. The share reached the all -time high in June 2024 with a course of around 135 euros. It seemed as if the course was only knowing one direction. Novo Nordisk was a “must” for many investors. But what’s going on that the stock has almost halved? Unique chance-or just a return to the bottom of the facts after a hype phase?
The challenges as a pharmaceutical company
Novo Nordisk A/S As a pharmaceutical company, risks are always threatened. Pharmaceutical companies are under constant pressure to result. Inadequate or bad study results can have massive effects on financial success. Furthermore, there is always the risk of side effects and long -term consequences that can lead to sales problems and punishments.
Another challenge for companies in a competitive market like that of the weight loss injections is increasing competitive pressure. In addition, the question also arises whether demand will be long -term, because the side effects are already diverse and long -term success can only occur when taking it constant. It remains to be seen whether customers want to bear the costs and side effects permanently.
Novo Nordisk in competition with Eli Lilly
Novo Nordisk is fighting Eli Lilly for market shares. They are the two dominating companies in the GLP-1-based medication market. While Novo Nordisk became the market leader with Ozempic and Wegovy, the US company Eli Lilly with Mounjaro (Tirepatid) and Zepbound (the weight loss variant of Mounjaro) developed strong competitive products.
But Eli Lilly alone cannot cover the current demand. The US market accounts for around 50 percent of Novo Nordisk’s sales. For this reason, it is already being produced in the United States, and the production capacity should double with an investment of $ 4.1 billion by 2029. If sales problems or increased competitive pressure occur, this can significantly harm Novo Nordisk.
The Down-side catalysts for Novo Nordisk
According to the ongoing euphoria, few catalysts have initiated a steady downward trend of the stock. The first catalyst was concerned about US health insurance. Although Wegovy is approved for weight loss, the US Act of Medicare forbids Health Insurance Act to finance weight loss medication. As a result, many elderly patients with obesity and heart diseases had difficulty receiving costs.
In addition, the two Novo-Nordisk treasurer Ozempic and Wegovy were included in the next round of the Medicare Price negotiations in 2027, which could lead to a price reduction.
The second catalyst sent the Novo-Nordisk share again in December within one day of trading by over 24 percent to the south. Because the study results on the new Blockbuster Cagrisema, a combination of Semaglutid and the experimental active ingredient cagrilintide, remained behind the expectations. The study showed an average weight reduction of 22 percent, which was below the expectations of 25 percent. The result was also disappointing compared to Eli Lillys Zepbound.
The Novo-Northisk share has not been able to catch itself since this news. However, numerous analysts and stock market gurus see a great opportunity to invest in Novo Nordisk.
The fundamental data and evaluation
Compared to the half -year figures of 2023, Novo Nordisk has shown positive sales development, with an increase to around 290 billion Danish crowns. The operational margin has also increased and is now 44.9 percent. These key figures indicate strong growth, despite the recent setbacks.
After a phase of overvaluation, that has Course-profit ratio (KGV) leveling off to a historically normal level of about 25. This could indicate that the share is now an attractive investment, especially with regard to the long-term double-digit profit growth, the high cash quota and the long-term track review.
Conclusion and outlook – Novo Nordisk
Novo Nordisk has reached a fair level of evaluation, provided that growth will occur as expected. Novo Nordisk’s chances are great when product development exceeds expectations. However, risks are the high volatility of the stock, possible side effects of the medication, poor study results and regulatory challenges. Investors should be aware that the market for pharmaceutical products is complex and difficult to predict.
Disclaimer:
No investment advice. No call to buy or sell securities.