Novo Nordisk Faces Challenges as Copycat Competition Intensifies

Novo Nordisk experiences heightened competition from copycat versions of its Wegovy obesity drug, affecting its market share, particularly in the U.S. The company is taking legal action against compounding pharmacies and exploring direct-to-consumer sales to remain competitive amid declining stock and sales expectations.

On Wednesday, Novo Nordisk issued a warning about ongoing competition from copycat versions of its Wegovy obesity drug this year, as it contends with pressure from compounding pharmacies and rival Eli Lilly in the U.S. This follows last year's surge that made Novo Nordisk Europe's most valued company at $650 billion.

Amidst stiff competition, the company recently reduced its full-year sales and profit outlook, surprising investors and resulting in a $95 billion drop in market value. Outgoing CEO Lars Fruergaard Jorgensen reported on a media call that the copycat market equals Novo's business size, with compounded Wegovy versions sold significantly cheaper.

Despite a U.S. FDA ban on compounded copies effective May 22, CFO Karsten Munk Knudsen noted that over a million U.S. patients remain on compounded GLP-1s. Novo plans legal action against pharmacies, while expanding direct-to-consumer sales via its NovoCare platform, as part of efforts to combat market share loss.

(With inputs from agencies.)