Novo Nordisk trims profit outlook as competition intensifies in obesity drug market

Danish pharmaceutical giant Novo Nordisk has revised its profit forecasts downwards for the fourth time this year as competition in the slimming and diabetes treatments market continues to grow. The company, famous for its weight loss and diabetes treatments Wegovy and Ozempic, now expects full year operating profit to rise between 4 and 7 percent, reduced from its previous estimate of up to 10 percent. Projected sales growth for 2025 has also been narrowed to a range of 8 to 11 percent, lower than the earlier upper end prediction of 14 percent.

In the three months ending September, Novo Nordisk’s operating profit fell 30 percent to 23.7 billion Danish kroner, missing analyst expectations. Despite sales of Wegovy rising by 18 percent year on year to 20.35 billion kroner during this period, the figure was below the 20.9 billion kroner anticipated by the market. Changeable prescription habits and mounting pricing pressures have further squeezed margins for the company, while a one off 9 billion kroner restructuring charge also weighed on quarterly performance.

Mike Doustdar, who assumed the chief executive’s role in August after the departure of Lars Fruergaard Jorgensen, faces significant challenges as he steers the group through its more turbulent phase. The company’s quarterly results mark the first under the new leadership, amid an atmosphere of restructuring and change at the board level—driven by pressure from the controlling Novo Nordisk Foundation, which has expressed concerns about the pace of management decision making, especially in response to shifts in the vital US market.

Over the nine month period to the end of September, operating profit still rose five percent to 95.9 billion kroner compared with the same interval last year. Without factoring in the one off restructuring costs, the increase would have been a more robust 15 percent. Net profit for the period totalled 75.5 billion kroner, up from 72.8 billion kroner a year earlier.

The weight loss market has experienced substantial growth since the pandemic, at one point helping Novo Nordisk claim the title of Europe’s most valuable company. More recently, the firm’s momentum has faced several setbacks: lacklustre clinical trial results, persistent competitive pressure from US firms such as Eli Lilly and Pfizer, US tariffs, and ongoing leadership changes have all contributed to a more challenging business environment.

Pfizer has filed a lawsuit alleging anti competitive behaviour after Novo Nordisk increased its bid to 10 billion dollars to acquire Metsera, a rival obesity drug developer. Meanwhile, discord within the Novo Nordisk board continues, with several directors stepping down and a fresh election for board positions scheduled for the middle of November. With the battle for supremacy in the lucrative weight loss market intensifying, investors and analysts will be watching closely for signs that the Danish group can regain its footing.