Novo Nordisk's shock 2026 guidance points to obesity battle heating up

By Maggie Fick and Jacob Gronholt-Pedersen LONDON/COPENHAGEN, Feb 4 (Reuters) – Danish obesity drug giant Novo Nordisk is set to be punished by investors on Wednesday after it gave a far bleaker-than-expected outlook for 2026 and flagged a tough weight-loss market battle ahead as prices come under pressure. Wegovy maker Novo warned on Tuesday that profits and sales could drop as much as 13% this year, the first declines in years, as heavy price pressure from U.S. President Donald Trump adds to fierce competition in the weight-loss market. The warning, which hit unexpectedly after the market close in Europe, dragged down Novo's U.S.-listed depository receipts nearly 15%, overturning a promising start to the year as the shares had rallied on strong sales of the new Wegovy pill. "Novo has provided shocking guidance for 2026," said Markus Manns, a portfolio manager at Union Investment that holds Novo and Eli Lilly shares, adding most investors had expected a mid-single-digit decline in sales and profit. "Nobody had a double-digit profit decline on the agenda." Shares of U.S.-listed obesity drug rival Eli Lilly and other developers also slid, as investors worried about intensifying competition in the blockbuster weight-loss market. JPMorgan estimated that Novo's Denmark-listed shares would fall over 10% on Wednesday. WEGOVY PILL SALES OFFER A 'GLIMPSE OF HOPE' Novo said it expects adjusted operating profit and adjusted sales at constant exchange rates to both fall by between 5% and 13% this year. Sales rose 10% last year, and analysts had, on average, forecast a 2% decline this year. The firm said its outlook was hit by lower realised prices, especially in the U.S., fierce competition, and the expiry of patents on semaglutide – the active ingredient in its Wegovy and Ozempic drugs – in some markets outside the U.S. Barclays in a note after the results said that the guidance was worse than expected which would see the main Denmark-listed shares "open significantly down" on Wednesday, though could gain some reprieve if investors consider the guidance "conservative". "We expect bulls to suggest this NOVOB guide is a 'kitchen sink' that will be beaten, though we note the same was said last year, and this proved not to be the case," it said, adding the other key positive was the performance of the Wegovy pill. Union Investment's Manns agreed the strong pill sales, with consumers seemingly willing to pay out of pocket, offered "a glimpse of hope". Novo's warning ends a years-long run of double-digit percentage gains in profits and sales since the launch of Wegovy in June 2021, which ignited a boom in demand for obesity drugs and meteoric growth for the Danish company. In 2024, it was Europe's most valuable listed company, worth $600 billion. (Reporting by Maggie Fick and Jacob Gronholt-Pedersen; Additional reporting by Stine Jacobsen; Writing by Adam Jourdan; Editing by Sonali Paul)

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