What happens when one of Europe’s largest pharmaceutical companies loses $70 billion in a single day? That’s exactly what happened to Danish company Novo Nordisk, whose shares fell 23% after the firm cut its outlook for the second time this year and announced leadership changes. New CEO Maziar Mike Doustdar takes charge on August 7th at a time when American competitor Eli Lilly is systematically gaining dominance in the weight-loss drug market worth over $100 billion annually.
Shares Lost 61% of Value in Year-Long Drop from $140 to $54
The financial impact of the current crisis is dramatic. Novo Nordisk’s securities fell over the past 12 months from a peak of $139.74 to the current $53.94, representing a 61% decline in value. Since the beginning of 2025, the Danish company has lost more than 40% of its value, with market capitalization dropping by $70 billion in a single trading day.
Despite these challenges, the company still shows very strong fundamental indicators. Gross margin exceeds 84% and the firm continues regular dividend payments, which it hasn’t missed for 37 consecutive years. However, investment bank BMO Capital responded to the current situation by lowering the company’s target share price from $64 to $55.
Second Forecast Cut This Year Reveals US Market Problems
Novo Nordisk drastically revised its projections for this year, marking the second adjustment since May. Expected revenue growth fell from the original 13-21% to the current 8-14%. An even sharper decline was seen in operating profit outlook, which dropped from 16-24% to just 10-16%.
The main cause of these adjustments is the deteriorating situation in the US market, which represents a key revenue source for the company. Pharmaceutical market analysis shows the firm faces three critical challenges:
- Spread of unauthorized copies of Wegovy drugs (cheaper alternatives manufactured by pharmacies) that emerged due to earlier supply shortages
- Slower expansion pace of the entire weight-loss drug market than originally expected
- More intense competition for Ozempic, which negatively affects revenue
Competitor Eli Lilly Offers Higher Weight Loss Efficacy
Competitive pressure from American company Eli Lilly has reached a critical point. Its products Mounjaro and Zepbound, containing the active ingredient tirzepatide, show higher efficacy in weight reduction compared to Novo Nordisk’s preparations containing semaglutide, according to the latest clinical studies.
This clinically proven higher efficacy of tirzepatide represents a fundamental competitive advantage that is rapidly reshaping the market. BMO Capital highlighted Novo Nordisk’s deteriorating position in the weight loss and diabetes drug market, noting that tirzepatide is emerging as a clinically more effective alternative than semaglutide.
New CEO Takes Over Company After 33 Years at Novo Nordisk
In response to the dramatic situation, the company announced extensive leadership changes. Maziar Mike Doustdar, who has been with the firm since 1992 and knows its operations from within, will become the new CEO starting August 7, 2025. He will replace Lars Fruergaard Jørgensen, whose departure was announced in May after shares began declining.
Several other key changes are happening simultaneously:
- Martin Holst Lange will become the new Chief Scientific Officer and lead the merged research and development division
- Marcus Schindler is retiring after a transition period
- Emil Kongshøj Larsen will take over international operations from Doustdar
In his first public statement, Doustdar emphasized the need to face challenges with “a sense of urgency and high performance” and expressed determination to take the company to an even higher level.
Deutsche Bank Sees Value at Today’s Low Prices
The current 61% share decline over the year creates a situation that analysts describe as potentially interesting for long-term investors. Biotech company situations often show similar volatility, while Deutsche Bank repeatedly confirmed its positive assessment and expects possible surprises in second-quarter results to be released on August 6, 2025.
Several factors suggest the current price may be below the company’s long-term value:
- The Danish company remains a global leader in developing treatments for metabolic diseases with decades of experience
- The company shows exceptional profitability with gross margin exceeding 84%
- The firm has paid dividends continuously for 37 years, demonstrating financial stability
- Continued investment in research and development – recently filed for approval of higher Wegovy doses
- New leadership may bring strategic changes and improved operational efficiency
It will be crucial to monitor how quickly the new management can stabilize the position in the US market and maintain competitiveness against Eli Lilly. Second-quarter results will provide important signals about whether the situation is stabilizing, while the global obesity drug market continues rapid growth toward an estimated $200 billion by 2030.
