Blood in the Streets!
Novo Nordisk. Equity Research! Part 2/3
Novo Nordisk just released earnings, and their 2026 guidance is disastrous!
The stock fell 15% as a result and an additional 3% in the after-market, further putting salt on the wound.
The company expects 2026 sales at the constant exchange rate to decline by 5-13%, whilst most analysts were expecting a contraction of 1-3%.
Meanwhile, adjusted operating income is set to also decline by 5-13%.
This is worse than anyone expected.
While there are many culprits, such as increasing competition, patent expirations, and high reinvestment.
The biggest reason is the Most Favored Nation agreement reached with Trump.
Novo will provide discounted GLP1s to the US government programs, Medicaid (low income), and Medicare (elderly), from as low as $149 p/m in some cases, to $300 p/m.
This is a significant discount to the $500-1000 p/m currently.
The agreement states that as soon as a new drug is launched, its US price must align with the lowest price offered in other comparably developed nations (OECD countries).
Some analysts expected that this deal alone would decrease Novo’s 2026 revenue growth rate by 1-3 percentage points.
But as we now know, the actual impact is much, much worse.
This is part 2 of my 3-part Novo Nordisk Deep Dive.
In the first part, I discussed Novo Nordisk’s business model and how Ozempic transformed the company.
The release of part 2 is quite timely to yesterdays events, as I will be taking a look at Novo Nordisk’s competitors and the risks to its business. Additionally, I will discuss the management and competitive advantages.
Let’s begin.
1. Management
2. Competitors
3. Risks
4. Competitive Advantages
1. Management
Novo Nordisk has historically been managed very conservatively with Danish CEO’s. This served them well through the years as the company steadily grew.
However, due to the recent underperformance and execution setbacks, Nordisk’s obesity GLP1 crown was taken by Eli Lilly.
The board of directors found CEO Lars Fruergaard Jørgensen directly responsible for this underperformance, so in May 2025, he was fired.
Maziar “Mike” Doustdar was hired as his replacement, becoming the first non-Danish CEO in the company’s history.
His appointment was seen as a move to make Novo “less Danish” and more aggressive. Analysts often pointed out that Novo’s cautious, consensus-driven Danish culture was a disadvantage when competing against the fast-moving, marketing-heavy American heavyweight like Eli Lilly.
Despite being Austrian-Iranian, Doustdar was raised in the US. His experience running the international operations segment was seen as an asset that would help the company fight back. He famously told investors that Novo had become “too comfortable” and needed to act with more “urgency.”
Since becoming the CEO, he has taken steps to address various issues facing the company.
Focusing on oral GLP1’s
Rather than fighting Trump, work with him to lower prices
Fast-tracked the expansion of US manufacturing facilities
Fired 9,000 employees to streamline operations
Ended the work-from-home system, forcing employees back to the office
Strengthened the sales organization
In short, he is taking steps to change the culture of the company.
To bring some needed dynamism and a US-style corporate culture that prioritises results over the conservatism of the Danish corporate culture that prioritises stability. 2026 is a transitional year, so time will tell if this change of strategy will be successful.