Novo Nordisk (NYSE:NVO) has been knocked back by Morgan Stanley, which has cut its rating on the Danish drugmaker from equal weight to underweight and lowered its price target from DKr 380 to DKr 300.
The shares fell 2% to DKr 341.95 in Copenhagen after the note landed.
The bank’s concern is the slowing pace of prescriptions for Wegovy, Ozempic and Rybelsus in the United States, which together make up Novo’s blockbuster GLP-1 diabetes and obesity franchise.
Prescriptions have flattened out in recent months, while Eli Lilly’s rival Mounjaro has kept growing. Morgan Stanley forecasts just 5% annual sales growth in 2026 and 2027, below consensus expectations of about 8%.
Competition is heating up. Generic versions of Ozempic are expected to launch in Canada next year, with copycats also likely in emerging markets such as China, India and Brazil. In the US, cheap compounded versions of GLP-1 drugs are already nibbling at market share.
On top of that, the US government is due to announce by November how much it will cut Medicare prices for Ozempic, with Morgan Stanley pencilling in a 50% reduction from 2027.
The pipeline offers some hope. Oral Wegovy is due in 2026, though Novo faces a trade-off between protecting its injectable franchise and competing against Lilly’s oral rival.
A new drug, CagriSema, could arrive in 2027, but any gains may be offset by looming price pressure. The Alzheimer’s trial of semaglutide, due later this year, is another potential catalyst, but Morgan Stanley assigns only a one-in-four chance of success.
At DKr 300, the price target implies Novo would trade on about 11 times 2028 earnings, in line with Novartis and not far off Sanofi and GSK.
In other words, the premium rating that investors have long paid for Novo’s growth is under threat as its dependence on semaglutide becomes clearer.