Novo Nordisk shares extend losses, erasing nearly all gains since Wegovy launch

The weight-loss drug Wegovy is shown in this undated photo. THE CANADIAN PRESS/handout, Novo Nordisk Canada Inc.

Shares in Novo Nordisk fell as much as six per cent on Friday to their lowest since August 2021, extending recent losses to wipe out almost all the gains made since the drugmaker launched its blockbuster weight-loss treatment Wegovy.

The fall comes after U.S. President Donald Trump on Thursday sent letters to 17 major pharmaceutical firms, including Novo Nordisk, telling them to cut drug prices in the United States. That prompted share price declines across the sector.

Novo Nordisk on Tuesday slashed its forecast for 2025 sales growth due to competition from compounded, or copycat, versions of Wegovy and appointed veteran insider Maziar Mike Doustdar as its new CEO, prompting its shares to fall 23 per cent on the day.

Novo became Europe’s most valuable listed company following the launch of Wegovy in June 2021. But its shares have plunged by more than two-thirds since peaking last year on concerns the drugmaker is losing ground in the obesity drug race.

“The U.S. healthcare system is complex, but Novo Nordisk will continue to work to find solutions that help people access the medicines they need at affordable prices,” Novo said in an emailed statement.

Novo’s shares were 4.9 per cent lower at 08:39 GMT. Friday’s drop brings this week’s losses to more than 30 per cent - the stock’s worst-ever weekly fall.

The European healthcare index .SXDP was down 1.6 per cent, its lowest since April.

“Trump doesn’t have the mandate to tell Novo Nordisk how to price their products in the U.S., but investors are just panicking about the risk of another downgrade,” said Nordnet analyst Per Hansen.

The pressure to lower prices adds to Novo’s problems in the United States, its biggest market. It faces competition from Eli Lilly LLY.N and from compounders - custom-made medicines that are based on the same ingredients as branded drugs.

“This is a repricing of the obesity market, it’s a repricing of the United States as the world’s most attractive drug market, and it’s a repricing of the risk from Donald Trump,” Hansen said.

(Reporting by Anna Pruchnicka, Elviira Luoma, Jacob Gronholt-Pedersen and Louise Breusch Rasmussen. Editing by Amanda Cooper and Mark Potter)