Novo Nordisk Shares Tumble 18% as CEO Warns It Will Get Worse Before It Gets Better

COPENHAGEN – Novo Nordisk, the Danish pharmaceutical giant behind the blockbuster weight-loss drug Wegovy, saw its market value plummet Wednesday after a surprise forecast for 2026 signaled significant pain ahead, erasing its entire year-to-date stock gains in a single session. The company’s stock plunged by as much as 17% in Copenhagen, mirroring a dramatic slide in its American depositary shares Tuesday evening.

The sell-off was triggered by a pre-released forecast that stunned analysts and investors alike. The company projected that both sales and operating profit would decline by 5% to 13% in 2026, a stark reversal for a firm that has enjoyed meteoric growth.

In a candid interview with CNBC, CEO Mike Doustdar delivered a sobering message, directly managing expectations for a swift recovery. "People should expect that it goes down before it comes back up," he stated, attributing the downturn to a strategic, albeit painful, decision to slash U.S. prices for Wegovy.

The Shock Forecast

The guidance for 2026 represents a dramatic strategic pivot, moving from a high-price, high-growth model to one focused on volume and affordability, a move that will come at a significant short-term cost.

• The Numbers: Novo Nordisk guided for a 5% to 13% decline in both sales and operating profit for the full year 2026. This was far below consensus estimates and indicated a severe margin compression that the market had not priced in.

• CEO's Rationale: Mr. Doustdar framed the price cuts as a necessary headwind to achieve long-term market penetration. "We are creating affordability for the patients, millions of patients that are right now in need of GLP-1 products, but simply could not afford it," he explained. "To do that short term, you have to take a headwind. But of course, there's a very long tailwind for years to come."

Decoding the Headwinds

The grim forecast is the culmination of several mounting pressures, primarily centered on the lucrative but increasingly competitive U.S. market, which is by far Novo's largest.

• Aggressive U.S. Pricing: The core of the issue is the "significantly lower U.S. pricing" on Wegovy. While the company did not specify the exact magnitude of the cuts, the guidance implies they will be substantial enough to offset growth in other areas.

• The Eli Lilly Factor: Novo Nordisk faces intense and growing competition from its chief rival, U.S.-based Eli Lilly. Lilly's own GLP-1 drugs, Mounjaro (for diabetes) and Zepbound (for weight loss), have been immensely successful and are directly competing for market share, putting natural downward pressure on prices.

• The Compounding Pharmacy Threat: The company has also been battling cheaper, unauthorized "knockoff" versions of its drugs from compounding pharmacies. These pharmacies replicate semaglutide, the active ingredient in Wegovy and Ozempic, and sell it at a fraction of the cost, further eroding Novo's pricing power and market control.

A Pattern of Disappointment

For investors, this week's announcement carries a troubling sense of déjà vu, raising questions about the company's forecasting credibility. This is the second time in recent history that Novo has delivered a shocking guidance cut that has vaporized billions in shareholder value.

• Precedent from 2025: In July of last year, Novo Nordisk slashed its guidance for 2025, also citing a challenging U.S. market. That announcement led to a staggering 23% one-day crash in its share price.

• Analyst Skepticism: The repeated negative surprises have made analysts wary. As analysts at Barclays noted, some might view the new 2026 forecast as a "kitchen sink" guide—setting the bar so low it becomes easy to beat. However, they cautioned, "we note the same was said last year, and this proved not to be the case."

The Paradox of a Successful Launch

Ironically, the bleak financial outlook comes just as Novo Nordisk is celebrating a wildly successful new product launch. The oral pill version of Wegovy has exceeded all internal expectations, demonstrating massive underlying demand for the treatment.

• Wegovy Pill Success: "We knew it's going to be the best in terms of efficacy of 16.6% we had expected it to do well, but we did not think that after four weeks of introduction, we will have 170,000 people on the pill," Mr. Doustdar said.

• The Math Doesn't Add Up (Yet): Despite the pill's blockbuster debut, the financial reality is stark. The CEO explained that the immediate, negative impact of price cuts on the massive existing business of injectable Wegovy and Ozempic far outweighs the initial revenue gains from the new pill. "No matter how well it does in the initial period, the price hit on the existing business trumps, basically, the great pill launch that we've had," he concluded.

The Road Ahead

With the market now recalibrating for a period of negative growth, the central question is about the nature and timing of the eventual recovery. Novo Nordisk is betting that sacrificing short-term profitability will secure long-term dominance in a market with hundreds of millions of potential customers.

• Investor Outlook: The immediate focus for investors is no longer on growth, but on the shape of the recovery. As HSBC analyst Rajesh Kumar aptly put it, "The question becomes if the recovery from here, [will be] a Nike swoosh or U-shaped recovery."

• A High-Stakes Gamble: Novo's strategy is a calculated, high-stakes gamble. By proactively cutting prices, it aims to fend off competitors, neutralize the threat from compounding pharmacies, and vastly expand the accessible patient pool. If successful, the company could emerge with an even larger, more defensible market position years from now. For now, however, investors must brace for a period of significant turbulence.