Novo Nordisk (NVO) - Q3 FY12/25 Earnings Review
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Can $NVO Sustain Its Growth?
by Nathan Brinkman for Cestrian Capital Research, Inc
Novo Nordisk is a global pharmaceutical company focused primarily on diabetes care, obesity, and other cardiometabolic diseases, with additional positions in rare disease (hemophilia and other rare blood/endocrine disorders). Over the last several years, the company has been defined by the success of its GLP-1 franchise—especially semaglutide-based products—driving exceptional revenue growth, margin expansion, and a re-rating of the stock.
However, can NVO sustain extraordinary growth in a market constrained by manufacturing capacity, payer scrutiny, and intensifying competition (notably Eli Lilly), while successfully transitioning from first-wave GLP-1s into next-generation therapies? Instead of a “patent cliff” NVO has suffered from more of an “execution cliff” due to issues with supply scale-up, pricing durability, clinical differentiation, and lifecycle evolution.
Ozempic / Wegovy / Rybelsus (Semaglutide)
Novo’s GLP-1 engine spans multiple products and patient segments:
- Ozempic – Type 2 diabetes (injectable semaglutide)
- Wegovy – Chronic weight management / obesity (injectable semaglutide)
- Rybelsus – Oral semaglutide (Type 2 diabetes; platform for future oral obesity expansion)
Semaglutide sales make up about 70% of NVO’s total revenue and have suffered declining / levelling growth (~27%) vs. historical due to significant competition from Eli Lilly (LLY). Although declining, this is still double digit growth which is expected to continue into the future in both the diabetes and weight loss markets due to expansion into various markets (China), by continued uptake as a standard diabetic therapy, and continued growth in weight loss.
However, LLY and NVO continue their aggressive price wars targeting the “cash” and “micro-dose” markets from online pharmacies while also providing direct access pharmacies to those looking to lose weight. These can definitely reduce NVO’s margins as competition continues to drive down the price of GLP-1 medications.
Another risk, not widely communicated, is NVO’s purchase of the Catalent facility in Indiana to conduct the fill/finish operations of Wegovy in the US, to address increasing demand. This facility recently received an FDA warning letter citing improper investigation over the presence of "mammalian hair” in vials of Wegovy. I believe this hair was identified to be from a cat and human. If this slows production capacity, growth in 2026 may be impacted, especially in the US.
Pipeline
Novo’s pipeline is heavily concentrated in next-generation obesity and diabetes therapies, with selective expansion into cardiometabolic comorbidities and rare disease.