Novo Nordisk is racing to shore up its supply chain just as a new US Medicare programme threatens to overwhelm existing capacity for its blockbuster obesity drugs. The Danish pharmaceutical group signed a fill-and-finish deal with Indian contract manufacturer Shantha Biologics on Tuesday, outsourcing injection filling to stabilise delivery of its GLP-1 medicines. The move comes days after the launch of the Medicare GLP-1 Bridge Program, which caps out-of-pocket costs for eligible seniors at $50 a month for Wegovy, a price point that analysts expect to trigger a surge in new prescriptions.
The stock has responded vigorously. Novo Nordisk shares closed at €43.72 on Tuesday, stretching their one-month gain beyond 22%. Yet the rally sits atop a fractured year: the equity still trades 3.63% lower year-to-date and has shed 27.29% over the past twelve months. At €61.20, last July’s all-time high remains nearly 30% out of reach, even after a 42.35% rebound from March’s trough of €30.25.
Analyst sentiment reflects the disconnect. HSBC lifted its price target from 280 to 300 Danish kroner, while Jyske Bank went further, setting a target of 330 kroner. Both houses, however, rate the stock a “Hold”, and a separate analyst sets a target of just $42 per share — essentially flat to the current level. The lack of conviction underscores mounting concerns over pricing pressure, reimbursement headwinds, and a deteriorating competitive landscape in the GLP-1 space.
Technical indicators flash a clearer warning. The 14-day relative-strength index has climbed to 70.7, pushing into overbought territory after having stood at 67.4 a session earlier. The reading triggered a brief pullback on Monday before buyers stepped back in. Annualised 30-day volatility sits at 31.47%, and the stock now trades 10.75% above its 50-day moving average and 5.64% above its 200-day average, suggesting the recovery may be stretched.
Should investors sell immediately? Or is it worth buying Novo Nordisk?
A parallel buyback programme is providing a steady floor under the shares. Between June 29 and July 3, Novo Nordisk repurchased 1 million B-shares under the EU Safe Harbour framework launched on May 6. Total buybacks since February have reached 23,009,179 B-shares, costing approximately 6.22 billion kroner. The company’s treasury now holds 40,194,480 B-shares, or roughly 0.9% of share capital. Under the current authorisation, management plans to buy back up to 11.2 billion kroner in B-shares by February 1, 2027, as part of a broader 15-billion-kroner repurchase envelope running from February 2026.
The production deal with Shantha Biologics addresses the most immediate bottleneck. By outsourcing the filling of injectable GLP-1 drugs, Novo Nordisk aims to ensure that the Medicare-driven demand wave does not overwhelm its own manufacturing network. The programme, effective July 1, gives eligible seniors access to Wegovy and other obesity medications at a fixed monthly copay, dramatically lowering the barrier for the roughly 28 million Medicare Part D beneficiaries with obesity.
Still, the rally’s sustainability remains in question until the half-year results due later this month reveal whether the improvement is fundamental or merely technical. The stock is up 42.35% from its March low but remains 29.64% below its July 2024 peak. With an overbought RSI, a divided analyst base, and a competitive GLP-1 market that shows no signs of easing, Novo Nordisk’s dual strategy of production expansion and shareholder returns faces its first real test.
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