Novo-Nordisk A/S

Novo hosted its 2026 Capital Markets Day on Sept. 21, where it disclosed 2030 financial targets, including mid-single-digit top-line growth and roughly steady operating margins. Shares fell 8%.

Why it matters: Investors are looking for signs that Novo is regaining its footing in the rapidly evolving obesity market, where it has lost significant share to Eli Lilly and will face numerous new competitors over the next few years. We think mid-single-digit top-line growth through 2030 looks achievable and in line with our current projections (6% 2026-30 CAGR), although the burning question is how hard semaglutide revenue will be hit when patents on the molecule begin to expire in the US and Europe in 2031-32. Novo aims to maintain gross margins through manufacturing efficiency despite price headwinds, although we remain somewhat skeptical as the obesity market moves in a more consumer-focused (and lower-priced) direction, adding to the traditional pharma pricing pressure from competition.

The bottom line: We've slightly lowered our fair value estimate for wide-moat Novo Nordisk to DKK 275/$42 from DKK 285/$44 after increasing our long-term R&D expenditures, partly offset by assigning more longevity to Wegovy pill (formulation patents to the late 2030s). Shares remain relatively fairly valued in our view, with midstage data for triple combination assets or significant business development standing out as possible catalysts. Wegovy pill is the key near-term revenue driver, and guidance on serving 10 times more patients by 2030 fits with our projection for $2.5 billion in 2026 sales growing to $12 billion by 2030, assuming average global prices falling roughly 15% annually.

Long view: Our pipeline estimates are roughly in line with management's DKK 150 billion in risk-adjusted 2035 sales, but we see zenagamtide (2029 launch) as more promising than cagrisema (2027) and cagrilintide (2028) due to its potential for an oral formulation and stronger efficacy.

For our long-term view of Novo's position in the obesity market, we're particularly interested in dynamics around long-term obesity drug compliance and Novo's peptide manufacturing efficiencies. More telehealth prescriptions for GLP-1 therapies are bringing in patients at lower price points and as part of subscriptions, which tend to help encourage long-term maintenance. We expect oral options (like Wegovy pill) and less frequent injections (led by Amgen's maritide) to help lengthen average duration of treatment.

In addition, we're still weighing the long-term competitive advantages of Novo's peptide manufacturing expertise in the obesity care market. If Wegovy pill maintains a market share edge beyond the US over Lilly's easier-to-manufacture small-molecule oral, Foundayo, then the oral peptide market could become a larger value driver for Novo. This could not only be protected by formulation patents running to the late 2030s, but also Novo's manufacturing scale and know-how.

For a deeper dive into Novo Nordisk's portfolio and pipeline, please see our May 2026 Healthcare Observer.

We're lowering our fair value estimate to $42 from $44, after increasing our long-term R&D expenditures to fit management's Capital Markets Day outlook, partly offset by assigning more longevity to Wegovy pill (with formulation patent protection lasting into the late 2030s).

We expect Novo to gain $45 billion of a $172 billion global GLP-1 market in diabetes and obesity by 2031, ahead of semaglutide's 2032 patent expiration, with Lilly as the key competitor. After a mid-single-digit expected top-line decline in 2026, we expect Novo's top line to resume mid-single-digit growth, on average, through 2031, largely driven by demand for GLP-1 therapies.

We assume that US GLP-1 market prices fall by 17% in diabetes and 39% in obesity in 2026, following a drug pricing agreement with the Trump administration in November 2025, and we assume high-single-digit annual US price declines for the GLP-1 class beyond 2026 due to competition and a combination of rising cash-pay use and lower prices for insured patients.

We convert our fair value estimate to dollars at the current spot rate of DKK 6.52/$1.

Our WACC estimate stands at 8.0%. Our beta of 0.7 reflects a combination of biopharma's generally defensive nature, the cash-pay GLP-1 market's discretionary nature, and Novo's own fundamentals and market returns.

We include a placeholder for future litigation risk at roughly 2% of non-GAAP net income (high relative to the rest of the branded drug industry).

Novo Nordisk products accounted for $30 billion of a roughly $80 billion global diabetes market in 2025, across its portfolio of insulin and GLP-1 therapies. In obesity, its GLP-1 therapies comprised $12 billion out of a nearly $30 billion market. We think its strong intangible assets in diabetes and related cardiometabolic diseases, like obesity, give the firm a wide Morningstar Economic Moat Rating that will shield profitability in the long run.

A focused research and development strategy allows the firm to repeatedly extend patent protection through innovation. Efficient manufacturing techniques and economies of scale have enabled Novo's insulin business to deliver strong global profitability, a quality it shares with the only two other global insulin players, Sanofi and Eli Lilly. However, we don't think Novo's cost advantages are strong enough to stand as a moat source for the entire firm, given that Novo’s foundation has rapidly shifted from insulin (17% of 2025 sales) to GLP-1 therapies (76% of 2025 sales). If peptide-based GLP-1 therapies remain the standard of care for the next 10 years, we expect Novo could hold a minor cost advantage in this market as well. However, the massive potential of GLP-1 therapies beyond diabetes—particularly in obesity—has drawn multiple competitors, several of which could launch with easier-to-manufacture pill treatments.

We think the firm does face environmental, social, and governance risks, particularly related to potential US drug price-related policy reform (Novo sees roughly 56% of its sales from the US pharmaceutical market) and ongoing potential for product governance issues (including litigation). While we have factored these threats into our analysis, we don't see them as material to our valuation or moat rating.

Novo's insulin business is continuing to evolve as next-generation versions steadily replace older versions. Novo's human insulin has been largely replaced by modern insulin and next-generation insulin analogs that provide better blood sugar control—with less hypoglycemia and weight gain—than their human counterparts. In addition, generic and branded competitors entering the insulin market face significant challenges, including upfront costs for clinical trials and manufacturing as well as relatively low negotiated prices for the branded versions. Novo can maintain strong profitability despite price concessions partly due to its manufacturing scale and expertise, specifically in manufacturing complex biologics with modern injection devices. Successful commercialization of diabetes products also requires a strong global sales presence. These dynamics have led to branded insulin products and generic versions from branded players (like Lilly's Basaglar, a generic version of Sanofi's Lantus) retaining most of the insulin market.

While GLP-1 treatment appears to delay the need for insulin and has reduced insulin demand recently, we expect Novo, Sanofi, and Lilly to enjoy continued insulin volume growth in the long term, as the increasingly overweight and aging global population initiates or requires more intensive treatment to control blood sugar and prevent diabetes-related complications or death. US patents have expired for Novo's three biggest modern insulin therapies—NovoLog (2017), NovoMix (2017), and Levemir (2019)—but the patent clock is reset with newer insulin therapies like Tresiba (2029) and Fiasp (2030). We expect further insulin improvements—such as Novo's weekly insulin Awiqli—to continue refreshing the firm's insulin portfolio.

While Novo's foundation was in insulin, its growth is coming from the GLP-1 business. In diabetes, injectable GLP-1 analog Ozempic (patent 2032) has grown its reach into the oral diabetes treatment market. Obesity drug Wegovy is also protected in the US through 2032 (as it is composed of the same semaglutide molecule as Ozempic) and has had strong uptake, despite supply limitations and competition from compounded drugs and Eli Lilly's GLP-1/GIP therapy, Mounjaro/Zepbound (tirzepatide). Cardiovascular and weight loss benefits on top of blood sugar control position the GLP-1 market for continued double-digit growth, and we expect global GLP-1 sales in diabetes and obesity to approach $200 billion by 2034. Novo's pipeline continues to move forward, with combination therapy cagrisema poised to launch in obesity in 2027, and zenagamtide (amycretin) in 2029. GLP-1 therapies also have potential in other cardiometabolic and related indications, such as heart failure, fatty liver disease, and sleep apnea. Novo and Lilly are gaining approvals in these adjacent indications for semaglutide and tirzepatide and are testing pipeline drugs in phase 3 studies.

Novo's historically more profitable rare-disease arm (less than 10% of sales) includes the hemophilia drug NovoSeven and the endocrine therapy Norditropin. We think newer hemophilia competition has made it difficult for Novo to maintain its competitiveness in this area, but the company does have its own newer hemophilia and growth hormone products at the launch phase or in the late-stage pipeline.

Novo's Wegovy and Wegovy pill are expanding the obesity treatment market with strong efficacy and convenience, and are poised to remain key drugs until US and EU patent expirations begin in 2031-32.

With a portfolio of older GLP-1 products, including injectable Ozempic and Ozempic pill, as well as cagrisema and amycretin in the pipeline, Novo is well positioned to defend its formidable diabetes market share.

Semaglutide could see significant sales potential in obesity-adjacent markets like liver disease (MASH), and Novo could achieve a strong share in these nascent markets.

Tresiba's strong profile in the long-acting insulin market hasn't been enough to defend it from US pricing pressure due to competition from Sanofi and Lilly, and biosimilar insulins have weighed on category pricing since 2017.

Novo's Victoza and Ozempic have made GLP-1 a key part of the firm's diabetes growth, but the Ozempic pill has had slower uptake, and Lilly's Mounjaro provides strong competition.

Wegovy had a slow launch due to supply constraints, and Zepbound, Lilly's obesity drug, has a superior profile.