Novo Nordisk $NVO ( ▲ 3.63% ) just gave back nearly all the market value it added during the blockbuster rise of Wegovy. A rough one-two punch of weak guidance and copycat drug fears sent shares tumbling about 20% last week, undoing a January rebound that had been fueled by excitement over its new oral weight-loss pill.
For a company that was once Europe’s most valuable, the reversal has been dramatic.
Guidance Shock Hits First
The slide started after Novo warned that 2026 sales could drop by as much as 13%. Management cited unprecedented pricing pressure in the US, rising competition, and the looming patent expiry for semaglutide, the key ingredient in both Wegovy and Ozempic.
That outlook rattled investors who had grown used to explosive GLP-1 growth carrying the company’s results.
Copycat Chaos Adds Fuel
Then came the telehealth curveball. Hims & Hers $HIMS ( ▼ 16.03% ) launched a low-cost copy of Novo’s newly approved oral Wegovy pill at just $49 a month, triggering fresh concerns about pricing power and competition. Although regulators quickly warned about illegal copycat drugs and Hims later pulled the pill, the damage to sentiment was already done.
Novo has since moved to sue Hims, and shares bounced somewhat on the legal pushback. But the episode underscored how vulnerable even blockbuster drugs can be to regulatory gray areas and aggressive challengers.
From European Crown Jewel to Catch-Up Mode
Since Wegovy’s FDA approval in 2021, Novo rode a wave of demand for weight-loss and diabetes drugs that pushed its market cap to around $650 billion at its peak. Supply shortages, however, opened the door to cheaper compounded alternatives, while rival Eli Lilly $LLY ( ▼ 1.28% ) gained ground with its own weight-loss drug, Zepbound.
Lilly’s stronger recent outlook only sharpened the contrast, as its GLP-1 portfolio has shown strong efficacy while staying competitive on price.
Novo may still find some support from regulatory action against copycats, but for now, the company that once defined the weight-loss boom is fighting to hold on to the gains that made it a market darling in the first place.