Novo Nordisk, the largest pharmaceutical company in Europe, experienced a significant drop of 27% in its stocks in March, the worst monthly decline since July 2002. By the end of March, the Danish company's share price had fallen to 469.8 Danish Krone (€63), the lowest level since February 2023. The stock has fallen 54% from its peak in June 2024, losing its position as Europe's most valuable company to LVMH and SAP.
The decline in Novo Nordisk's shares was triggered by increased competition from American competitor Eli Lilly. Eli Lilly's weight-loss drugs, Zepbound and Mounjaro, directly compete with Novo Nordisk's Wegovy and Ozempic, intensifying the competitive environment. Novo's shares dropped by 25% year-to-date, while Eli's stock saw a 4.6% increase.
Recent data on weekly prescriptions in the US suggested that Novo Nordisk could be losing market share to Eli Lilly, leading to a 0.9% decrease in Novo's stock and a 0.4% increase in Eli Lilly's shares on the last trading day of March.
In addition, Novo Nordisk's net profit margin decreased to 34.8% in 2024 from 36% in 2023. The company also provided a cautious forecast for 2025, anticipating revenue growth of 16% to 24% at constant currency—a slower pace compared to previous years. Analysts at Bank of America anticipate further downward revisions to Novo's 2025 growth outlook when it reports quarterly earnings in May.
Investors are also worried about potential profit margin erosion due to President Donald Trump's plans to impose tariffs on pharmaceutical products.
Concerns over Novo Nordisk's competitiveness were heightened by disappointing trial results for its new weight-loss drugs. The company's next-generation obesity drug, CagriSema, fell short of projected weight loss targets in phase 3 trials, causing a significant drop in its share price.
On the other hand, Eli Lilly is expected to release trial results for its new weight-loss drug, retatrutide, later in the year, with promising preliminary results indicating a 24% weight reduction. Both CagriSema and retatrutide are expected to seek regulatory approval in early 2026.