Novo Nordisk’s weight loss drug, Wegovy, is experiencing a surge in new prescriptions following a US ban on its copycat versions, though analysts caution that more substantial growth is needed to reassure investors.
Since the US Food and Drug Administration (FDA) implemented a ban on ‘compounded’ versions of Wegovy on 22 May, new prescriptions for the drug have risen by approximately 33 per cent. This culminated in 181,200 new prescriptions in the week ending 18 July, according to IQVIA data shared with Reuters by industry analysts.
The overall increase in Wegovy prescriptions is also narrowing the market lead held by Eli Lilly and Co’s rival drug, Zepbound. While Zepbound prescriptions outpaced Wegovy by nearly 175,000 in the US during the week ending 23 May, this gap had reduced to around 133,000 by 18 July.
Early signs of a shift come at a critical juncture for Novo. After Wegovy’s initial stunning success, investor confidence was rattled when Zepbound and compounders started to slow the drug’s growth. And then in May, the Danish company cut its full-year sales and earnings forecasts and announced the surprise exit of Chief Executive Lars Fruergaard Jorgensen, citing market challenges and a stock price nearly 60% below its 2024 peak.
Jorgensen said at the time he expected the FDA compounding ban to lift sales in the second half of this year. Investors are keen to hear whether that is still likely when the company reports quarterly earnings on August 6.
That leaves the drugmaker in what Barclays analyst Emily Field called a “show me” phase – no longer buoyed by optimism about a turnaround but under pressure to deliver. She has an “overweight” rating on Novo’s shares.
“We thought this trajectory change (in new prescriptions) would get the shares moving, but not so far,” Berenberg analyst Kerry Holford told Reuters. “I suspect investors are now waiting for the (second quarter) update – will they/won’t they trim guidance range? I think they will trim the top.” Berenberg has a “hold” rating on Novo.
Novo did not respond to a request for comment.
Investors and analysts note that the IQVIA prescription data is incomplete, because it does not capture sales of Wegovy through the company’s direct-to-consumer platform, NovoCare, launched in March. They estimate the channel is still a small slice of overall Wegovy volume.
“We would hope to see strong growth from the NovoCare channel but are cognizant that this may come at initially lower prices” due to discount offers, said Marcus Morris-Eyton, a portfolio manager at Alliance Bernstein, whose fund holds Novo shares.
“Sentiment towards Novo Nordisk is currently exceptionally weak, but given low expectations, the low valuation and hopefully accelerating prescription data in (the second half of 2025) we believe the market is underestimating Novo’s long term growth potential,” he said.
Booming sales of Wegovy catapulted Novo to become Europe’s most valuable listed company, peaking in June 2024 at about 615 billion euros, after the weekly injection became the first highly-effective obesity treatment approved in the U.S. in 2021.
But supply disruptions and gaps in health insurance coverage for Wegovy helped fuel the market for cheaper compounded – or copycat – versions, which are allowed under U.S. law when drugs are in shortage.
Investor sentiment on Novo soured after the company lost ground to U.S. rival Eli Lilly, which launched Zepbound in late 2023.
Capturing more of the patients who had turned to compounded drugs is key to meeting targets. The FDA determined that Wegovy was no longer in shortage in February, leading to the ban on compounded versions. Novo has rolled out new tactics to bring patients back, including a limited-time discount for one month’s supply, and secured better coverage from insurer CVS Health.
Analysts at Berenberg and UBS are sceptical these moves will provide enough momentum and expect that Novo will reduce or narrow its full-year guidance ranges, according to research notes. TD Cowen said the outcome was hard to predict due to limited visibility on NovoCare. Bank of America and Guggenheim said they did not expect another guidance cut and Barclays said it was unlikely. ($1 = 0.8513 euros)
