The Danish leader in healthcare for serious chronic diseases, Novo Nordisk (CPH:NOVO-B), is undergoing a transformation from a company with explosive growth driven by GLP-1 treatments (Ozempic, Wegovy) to a more mature company focused on growth through volume rather than profit margin.
With its new CEO, Maziar Mike DOUSTDAR, and having lost its ability to impose higher prices (TrumpRx, Medicare, IRA), Novo Nordisk is adapting to a more elastic consumer market, particularly in the anti-obesity treatment sector, where its main U.S. competitor, Eli Lilly (NYSE:LLY), appears to be better positioned thanks to its orforglipron, a pill that does not require dietary restrictions.
Despite these challenges, the majority of Novo Nordisk’s revenue remains recurring (RR 80%-90%) due to the barrier to entry posed by its refrigerated storage infrastructure, the complexity for patients switching treatments, the network effect through its connected injectors, and the indispensability of its diabetes treatments.
With approximately 10 to 15 million patients currently, the volume growth Novo Nordisk is targeting in the anti-obesity segment seems realistic, given that the total number of obese people worldwide is estimated at 800 million.
Summing up, Novo Nordisk remains a quality asset, especially considering the massive 56.22% drop in its share price since July 2024, suggesting that the market may have already priced in the aggressive competition and the pressure on selling prices.
Trading at approximately 16 times earnings, compared to 45 times in 2024, NOVO-B could represent an opportunity to acquire a world-class company with a rare industrial moat and exceptional ROE within a large addressable market driven by massive future global demand for obesity and diabetes treatments.
Furthermore, the new generation of products currently under development (Amycretin, CagriSema) could provide the necessary long-term structural growth to mitigate the impact of increased competition and disruption in a profitable and therefore attractive sector.
It remains to be seen to what extent the significant increase in CAPEX to 20% of revenue and the acquisition of Catalent Inc. will generate sustainable value within a company whose stability, stemming from Novo Holdings’ 77% ownership stake, could also lead to some inertia – a scenario currently contradicted by the new direction adopted in recent months (volume rather than margin, new CEO).
The likelihood of competition and disruption eroding NOVO-B’s competitive advantage in the anti-obesity segment should instead encourage it to strengthen its dominance in the diabetes treatment segment, where the company benefits from a more favorable environment thanks to stable demand, a strong track record, and a solid reputation, holding 50% of the global insulin market.
The primary risk, therefore, lies not in demand itself, but rather in the extent to which U.S. regulations, competition, and disruption will impact NOVO-B’s margins, particularly in anti-obesity treatments.
January 20, 2026, Charles Rault | cr AT charlesrault.com
To date, the author is a shareholder in the companies (CPH:NOVO-B) mentioned in this document.
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