Novo Nordisk CEO says drugmaker ‘overpromised and underdelivered’

Novo Nordisk ↘ 2.51% CEO Mike Doustdar acknowledged on Tuesday that the Danish drugmaker has "overpromised and underdelivered," eroding investor trust, as the company scrambles to chart a path beyond its blockbuster weight-loss franchise ahead of looming patent cliffs.

"What we have learned the last couple of years is overpromising and underdelivering loses trust very quickly," Doustdar said in a Bloomberg TV interview on Tuesday. "Investors want to know what happens next."bloomberg

Capital Markets Day Falls Flat

The remarks came a day after Novo's capital markets day in London on Monday, where shares slid as much as 9% as analysts grilled executives on pricing power, dealmaking strategy, and how the company plans to grow once semaglutide — the active ingredient in both Wegovy and Ozempic — loses patent protection in the early 2030s. Shares fell further on Tuesday, dropping as much as 1.3% in Copenhagen.marketscreener+1

Doustdar outlined targets including launching more than five blockbuster drugs by 2030 and generating over 150 billion Danish crowns ($23 billion) in pipeline sales by 2035. Executives also said the balance sheet can support larger acquisitions, not just bolt-on deals, though the sales target excludes any future M&A.933thedrive+1

Both investors and analysts called the targets underwhelming. BMO analyst Evan Seigerman wrote that the guided 3.6% revenue growth was already priced in, leaving the "burden of proof" on management. Markus Manns, a portfolio manager at Union Investment, said the 2030 sales outlook and stable margins failed to impress, adding that Novo "should buy something in other diseases" rather than tripling down on obesity.kwsn+1

A Bruising Decline

Novo's share price has plunged more than 70% from the record highs it reached after becoming Europe's most valuable listed company in 2023 with a market capitalization above $600 billion. Eli Lilly's ↘ 1.23% rival injection Zepbound is on track to outsell Wegovy by more than $7 billion this year, according to LSEG data.kwsn+1

The company has cut deep to control costs, with staff departures reaching 13,000 following layoffs and subsequent exits. On the pipeline front, management detailed plans to launch CagriSema early next year, followed by standalone cagrilintide and high-dose CagriSema in 2028, before advancing zenagamtide in both oral and injectable forms simultaneously.933thedrive+1

The Road Ahead

Sydbank analyst Soren Lontoft Hansen captured the challenge facing Doustdar: "It will be a very tough task actually to convince the market that the company is in really good shape because of the competition from Lilly, the price pressure, and also the patent expiry of semaglutide at the beginning of the next decade".kwsn