How Ozempic Transformed Novo Nordisk!
Novo Nordisk. Equity Research! Part 1/3
Today, millions of investors and ordinary people know of Novo Nordisk because of its world-famous, highly effective, and revolutionary drug called Ozempic.
When Ozempic was released in 2017, no one could have imagined it would become a global media sensation.
Celebrities such as Kim Kardashian, Oprah, and Adele appeared noticeably slimmer in public after rumors that they had used Ozempic. This made Ozempic the topic of general and entertainment news, and an incredibly rare feat for a medicinal drug. Understandably, as the word spread of Ozempic’s incredible weight-loss effects to all corners of the world, the demand for the drug exploded.
This free media exposure allowed Novo Nordisk to achieve incredible financial results.
In just 6 years, from 2017 to 2023:
Ozempic sales grew from $0 to $14B.
Total revenues almost doubled to $49.6B
Operating income increased by 93% to $15.2B
Net income grew by 102% to $12.4B
These results pushed Novo Nordisk’s stock up 663%, peaking at a market cap of over $600B, becoming the largest company in Europe.
But then the fairytale story ended with Novo’s stock collapsing in a spectacular fashion, falling over 70%. Their CEO was fired, and the company kept issuing lower and lower guidance and dealing with setback after setback.
Investors went from loving Novo Nordisk at $142 a share to hating it at $48!
However, 2026 has brought some optimism, as they have begun sales of their next-generation oral weight loss pill, raising the stock by 26% in 2026.
Can Novo Nordisk recover from this slump and achieve a turnaround, or are they destined to lose to Eli Lilly and other GLP1 weight-loss entrants?
I will answer that question with this 3-part Novo Nordisk company Deep Dive.
Part 1 – Brief History and Business Model.
Part 2 – Management, Competitive Advantages, Competitors, and Risks.
Part 3 – Opportunities, Financial Analysis, and a Valuation Model.
Let’s begin with Part 1.
1. The Story of Novo Nordisk
2. Drug Development
3. Patent Expirations
4. Business Model
1. The Story of Novo Nordisk
Novo Nordisk is a 103-year-old pharmaceutical company founded by Danish Nobel award recipient August Krogh.
In 1921, August’s wife, Marie Krogh, was diagnosed with diabetes, which at the time was effectively a death sentence. Diabetes is a disease where the body can’t properly control blood sugar because it doesn’t make enough insulin or can’t use it effectively.
Insulin is a hormone produced by the pancreas that regulates blood glucose levels.
In the early 1900s, it was incredibly deadly because insulin hadn’t been discovered yet, so people, especially children with type 1 diabetes, would slowly starve to death despite eating, with doctors able to offer little help.
Despite her condition, Marie joined her husband on a trip to the US in 1922, where August was expected to give lectures on his Nobel-winning work in cardiovascular physiology.
While in the US, they heard that researchers in Toronto had successfully extracted insulin.
Marie, realizing this was her only hope and a miracle for others, urged August to secure the rights to produce it in Denmark. August met with the Toronto team, received their blessing, and returned to Copenhagen to change history.
Nordisk Insulinlaboratorium was founded, and Marie became one of the first patients not only in Denmark, but in all of Europe to receive this revolutionary treatment. Insulin saved her life, enabling her to live for 22 years past her diabetes diagnosis, until she died from breast cancer in 1943.
In 1989, Nordisk Insulinlaboratorium merged with its main Danish competitor, Novo, and formed the Novo Nordisk of today. Since then, the company has grown into a massive conglomerate with over 78 thousand employees in dozens of countries.
2. Drug Development
The company spent $8B on R&D in the last 12 months, which is about 16% of total revenues, making it one of their largest expense categories. This is not a surprise, as drug development is an extremely difficult and time-consuming ordeal.
This is a high-risk, high-reward game that typically takes 10 to 15 years to bring a single new medicine to market!
The financial investment required is substantial, with estimates for the cost of developing a successful new molecular treatment ranging in the billions when accounting for the cost of failed attempts.
The standard development pipeline follows several distinct stages:
Drug Discovery
Preclinical Research
Clinical Trials
Phases 1,2 and 3
Regulatory review
Post-market monitoring
First, researchers identify an unmet medical need and look for biological targets, such as specific proteins or genes, that play a role in a disease. Thousands of potential compounds are screened to identify “hits,” which are then refined into “leads” with optimized therapeutic properties.
Then, promising candidates undergo rigorous laboratory testing to assess safety, toxicity, and pharmacokinetics (how the drug is absorbed and excreted). Only about 250 out of every 5,000–10,000 initial compounds show enough promise to reach this stage.
Just these two stages take years and cost tens if not hundreds of millions.
In the rare cases when a drug shows promise, it leaves this arduous discovery process and begins human trials.
Phase 1 involves small-scale studies, typically 20–100 people, primarily in healthy volunteers, to determine safety, tolerability, and appropriate dosing.
Phase 2 increases the number of patients to 100–500 with the target disease to assess the drug’s efficacy and further explore side effects.
Phase 3 begins large-scale, pivotal trials involving thousands of patients to definitively prove that the drug is safe and effective.
Human trials are the most expensive part of a drug discovery, and it is also where many drugs fail. Rarely does the drug demonstrate the same results in a human that they do in the lab, as there are many real-life factors that are hard to simulate.
Lastly, if Phase 3 is successful, the company submits its data to a regulatory authority such as the FDA, European Medicines Agency, or National Medical Products Administration of China. This review phase, which evaluates clinical data and manufacturing processes, typically lasts 1 to 2 years.
Following approval, the drug is continuously monitored for long-term safety and rare side effects in the general population.
The industry faces an incredibly high attrition rate, as most drugs fail during development!
Only about 10–15% of drugs that enter human clinical trials eventually receive approval. Due to these high failure rates and the long timelines involved, pharmaceutical companies often rely on acquisitions to fill gaps in their pipelines created by expiring patents.
Recently, companies have begun to use AI, hoping to accelerate discovery. Including Nordisk’s main competitor, Eli Lilly, which just signed a $1B drug research partnership with Nvidia.
3. Patent Expirations
Capitalism is great at incentivizing companies to make more profit, but often, it is criticized for ignoring questions of morality and public good. If a pharmaceutical company develops a life-saving drug, it is entitled to billions in profits. However, the more expensive the drug, the fewer people can afford it.
Millions die every year from diseases that have been “cured” because they don’t have the money for the treatment.
In theory, governments could force companies to sell a drug for a low price, and many governments do, but that stifles the development of new drugs. The society needs pharmaceutical companies to keep innovating and releasing new, more effective medicines.
So, a system has been developed to incentivize new drug development. When a drug is developed, pharmaceutical companies get patent protection for 20 years. After a patent expires, other companies are free to recreate the drug and sell it for cheap, called generic drugs. This ensures pharmaceutical companies are compensated for their efforts with profits to reward shareholders for funding drug development, new drugs keep getting developed, and low-income patients get cheaper access to old drugs.
In the picture above, we see the cycle in which pharmaceutical companies live. It takes many years from discovery to start making any money and a few more years to recover the development costs. During the middle stage of a drugs life, the company must earn enough profits to pay for the development of a drug that will replace the current one once the patent expires.
While this system is criticized, it’s the best one that we have.
If patents lasted forever, there would be no incentive to develop new drugs. Meanwhile, if patents lasted only a few years, there wouldn’t be a profit incentive to develop new drugs.
The patent clock starts ticking when a pharmaceutical company files patent documents with the government, not when a drug is approved or commercialized. So, companies always file early to stop a competitor from filing a patent for a similar formulation.
As we can see in the picture above, the Ozempic patent expires in China this year, but it is active in the US till 2032, Japan till 2031, and Europe till 2031. With the current sales trajectory, this could be long enough for Novo Nordisk to generate over $100B in sales before patent exclusivity expires everywhere.
Furthermore, Wegovy’s patents expire at the same time as Ozempic, because it is based on the same formulation.
Simply put, Wegovy is just a repacked and remarketed Ozempic. When a pharmaceutical company uses the same chemical formulation to release a new drug with a different name for a new indication, it doesn’t get patent extensions.
However, if Novo Nordisk combines semaglutide with other molecules to create a new drug, that new drug will get additional protections. This is exactly how Novo Nordisk plans to release new drugs for many years past the patent expiration.
4. Business Model
Novo Nordisk is a vertically integrated pharmaceutical drug discovery, manufacturing, commercialization, and distribution company.
Its business can largely be categorized into 3 segments:
Insulin
Rare Diseases
GLP1’s
4.1. Insulin
Despite it being over 100 years since Novo Nordisk has been selling Insulin, it still remains the company’s bread and butter, generating $8.7B in sales in LTM Q3 2025, about 17.6% of total revenues.
However, Novo Nordisk is deprioritizing it as it is a highly mature no-growth segment with no patent protections and lots of competition.
As you can see in the picture above, overall insulin sales are flat and show a clear downward trend.
4.2. Rare Diseases
The Rare Diseases segment had sales of $3.14B in LTM as of Q3 2025, generating 6.3% of total revenues.
As you can see in the graph above, this segment has done nothing for over a decade and has underperformed expectations. Furthermore, while Novo Nordisk continues to invest in the segment, it is unlikely to a be a meaningful growth driver in the future.
As the name implies, within this segment, the company makes treatments for rare diseases, such as blood, hormone, and genetic disorders. And that inherently limits its earnings potential.
Unlike diabetes or obesity, patient populations are small and fixed.
For instance, haemophilia and sickle cell disease blood disorders have a stable occurrence rate. This means that Novo can only grow by taking market share, raising prices, or launching next-generation innovations. Each method is problematic in its own right, making strong growth unlikely.
Investors should view the rare disease as a long-cycle, high-quality option for future innovation, not a business designed to compound revenue every year.
4.3. GLP1’s
It’s time to talk about the star of the show and the real money maker for the company, GLP1s.
GLP-1 stands for glucagon-like peptide-1, a hormone in the gut that regulates sugar and insulin levels in the blood. Originally, early medicines were developed to treat diabetes. However, researchers observed that many patients lost a lot of weight and reported a loss of appetite and a strange apathy towards food. Novo Nordisk quickly realized that if redirected towards treating obesity, these drugs could be extremely effective.
They were right on the money!
GLP-1s could potentially become the highest-earning medicines in history!
Victoza is Novo Nordisk’s first GLP1 drug, released in 2009 as a once-daily injection for type-2 diabetes using liraglutide as the active ingredient. Back then, patients noticed a small weight loss of 2-4KG over 6-12 months, but that was viewed merely as a side effect. Sales peaked at $3.7B in 2017 but have now fallen to $0.6B.
Saxeda was released next in 2015 as the first GLP1 specifically intended for the treatment of chronic obesity. It doubled the dose of liraglutide from Victoza to achieve a stronger appetite-suppressing effect. Patients experienced a weight loss of 5-8% in bodyweight, which was clinically meaningful, not just a side effect. Sales peaked at $1.5B in 2022 but have now fallen to $0.7B.
Both Victoza and Saxenda have lost their patent protections and are having to compete with generics. I will expand on patents later in this report.
Ozempic was released in 2017, and it completely transformed the industry. Instead of using liraglutide, it was based on semaglutide. This new active ingredient was significantly longer lasting, requiring weekly, rather than daily injections. That not only increased adherence to the drug regimen but also made Ozempic more potent. It was still categorised as a diabetes treatment, as insurance coverage for obesity treatment was low.
Patients quickly realized that they lost a lot of weight, and subsequent trials demonstrated an average 6-8% loss in body weight. However, what made the drug especially popular was that it was significantly more effective than Saxenda on the extremes, with many patients losing significantly more than 10% of their body weight.
When the word spread that Ozempic was real and effective, not some snake-oil salesman’s miracle cure, the demand exploded!
As you can see in the graph above, Ozempic grew from $0 in 2017 to $20.3B today!
After Ozempic, in 2019, the company released Rybelsus, its first oral GLP1. It can lead to a 2-5% weight loss.
It is expected that Oral GLP1 pill treatments will become bestsellers.
While oral pills are less effective, and have comparable side effects, they are easier and more convenient to take, and are a more acceptable form of treatment for patients who prefer pills over injections.
A core problem for all medical treatments is adherence to the prescribed schedule. Patients often forget to take the medicine or stop taking it due to discomfort or side effects. Pills have significantly higher adherence than injectables, thus making them better suited to have a sustained long-term result.
This is why Rybelsus sales are still growing, despite the low weight loss results.
Wegovy is Novo’s latest obesity treatment drug that’s based on semaglutide. Since being released in 2021, sales have grown at an incredible pace, reaching $12B in LTM as of Q3 2025. Patients consistently achieve 12-16% weight loss after 68 weeks.
Just this month, in January 2026, the company launched a once-daily oral pill version of Wegovy!
Recent trials demonstrated that the oral Wegovy has similar effectiveness to its once weekly injectible, providing a great alternative to patients preferring pills over injectables.
Reuters reported that the Wegovy Pill hit over 18,000 prescriptions in the first week of launch, which is a better result than injectable Wegovy and Eli Lilly’s Zepbound.
5. Parts 2 and 3
Thank you for reading this Novo Nordisk Deep Dive.
Parts 2 and 3 are available for my Premium Members.
Here is what my Premium Members can expect:
Portfolio Review - Each month, I will present the portfolio performance and discuss my stock watchlist and my best ideas.
Recent developments.
Unwarranted pullbacks.
Insider activity.
Potential catalysts.
Deep Dives – 8,000+ word detailed analysis of a company, delivered in 3 Parts.
Part 1 – Brief History of the company and its Business Model.
Part 2 – Management, Moats, Competitors, and Risks.
Part 3 – Opportunities, Financial Analysis, and a Valuation Model.
You can expect a comprehensive research report that is educational, interesting, and provides actionable insights!
To see what you can expect, read my Palantir Deep Dive!
Members of the Premium service get access to my library of 11 Deep Dives and to all future Deep Dives, which will be released on semi-monthly basis.
Investment Cases – A short, concise report with actionable insights.
This report is about the size of a single part of a Deep Dive.
Focused Investment Thesis
Main drivers of the Bull Case
Valuation Model
To see what you can expect, read my Oscar Health Investment Case!
Earnings Reviews and Updates – For companies that are of great interest to me and my readers, I will provide regular quarterly or semi-annual updates after earnings reports.
Financial performance
Business Update
New developments
Updated Valuation Model
To see what you can expect, read my Google Q2 2025 Earnings Review!
Equity Research Report List
You can follow me on Social Media below:
X(Twitter): TheRayMyers
Threads: @global_equity_briefing
LinkedIn: TheRayMyers
Disclaimer: Global Equity Briefing by Ray Myers
The information provided in the “Global Equity Briefing” newsletter is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. Ray Myers, as the author, is not a registered financial advisor, and readers should consult with their own financial advisors before making any investment decisions.
The content presented in this newsletter is based on publicly available information and sources believed to be reliable. However, Ray Myers does not guarantee the accuracy, completeness, or timeliness of the information provided. The author assumes no responsibility or liability for any errors or omissions in the content or for any actions taken in reliance on the information presented.
Readers should be aware that investing involves risks, and past performance is not indicative of future results. The author may or may not hold positions in the companies mentioned in the “Global Equity Briefing” report. Any investment decisions made based on the information in this newsletter are at the sole discretion of the reader, and they assume full responsibility for their own investment activities.
Thank you so much for sharing this, this is an extremely well researched article with a lot of valuable insights for investors who do not follow the industry as closely. From a purely financial statement analysis angle, this company screams the word "execution risk" while multiples are low, capex high, free cash flow volatile, margins highly profitable and debt rising. I am curious to see how your analysis continues.