Citi stays 'neutral' on Novo Nordisk as crowded obesity market threatens to erode its competitive edge
Novo Nordisk (NYSE:NVO), the Danish pharma giant behind the Ozempic and Wegovy weight-loss drugs, faces a tightening competitive landscape after a US rival published late-stage trial data showing comparable efficacy to its flagship products with a better side-effect profile.
Regeneron's weekly injectable GIP/GLP-1 agonist, a drug that mimics gut hormones to suppress appetite, achieved 19% weight loss at 48 weeks in a Chinese phase III trial, matching the performance of Eli Lilly's Zepbound at the same time point but with lower gastrointestinal toxicity.
Citi analyst Nicholas Herman says the result underscores how crowded the obesity drug market is likely to become over the next few years, increasing pressure on Novo's pipeline to deliver meaningful differentiation.
On a more positive note, Novo announced a partnership with US telehealth platform Hims & Hers under which the company will offer branded Ozempic, Wegovy and a Wegovy pill at self-pay prices, while Hims ceases to advertise compounded, or copycat, versions of GLP-1 drugs.
Citi views the commercial upside as limited, however, noting that Hims sales of compounded GLP-1 were modest and regulators were already moving to remove them from the market.