Following a punishing week for shareholders, the Danish pharmaceutical titan is launching an aggressive two-pronged strategy to reverse its fortunes. Instead of retreating after a significant clinical setback sent its shares to a multi-year low, management has unveiled a radical pricing maneuver and submitted a new regulatory application over the weekend. This decisive action raises a critical question for the market: is this enough to halt the stock’s precipitous decline?
A Strategic Price War in the US Market
In a move to defend its core business against arch-rival Eli Lilly and mounting political pressure, Novo Nordisk is making a dramatic play. The company announced substantial price cuts in the United States for its blockbuster drugs, Wegovy and Ozempic. A new introductory price of $199 aims to attract patients, after which the standard monthly cost will be $349. This represents a sharp reduction from the previous price point of $499. The strategy appears clear: prioritize market share preservation over near-term profit margins. Management is betting that increased volume will ultimately safeguard revenue streams.
The Clinical Setback That Triggered the Slide
Before this counter-offensive, market sentiment was dominated by disappointment. The recent share price collapse was triggered by the failure of the Phase 3 “EVOKE” trial. Investors had pinned significant hopes on the use of oral semaglutid for treating early-stage Alzheimer’s disease. However, the results were disheartening, showing no statistically significant slowing of disease progression. With the market having partially priced in this potential multi-billion dollar opportunity, investors reacted with a panic sell-off. This setback contributes to a challenging year where the stock has already lost more than 50 percent of its value since January.
Should investors sell immediately? Or is it worth buying Novo Nordisk?
A New High-Dose Formulation Seeks Approval
Simultaneously, the company is leveraging its technological edge to reignite investor enthusiasm. Novo Nordisk has filed for U.S. Food and Drug Administration (FDA) approval of a high-dose 7.2 mg version of Wegovy. The clinical data from the “STEP UP” study provides compelling support for this new formulation:
* Efficacy: Patients achieved an average weight loss of 20.7 percent.
* Superiority: This result notably surpasses the 15 to 17 percent weight loss observed with the standard dose.
* Success Rate: Over 90 percent of trial participants experienced significant weight reduction.
Conclusion: Is a Bottom Forming?
The market now faces a delicate balancing act. Does the loss of the Alzheimer’s opportunity outweigh the aggressive defense of its leadership in the obesity sector? On Friday, the shares showed tentative signs of stabilization, gaining just over 2 percent to close at €42.65. The flurry of aggressive news over the weekend sends one unmistakable signal to investors: Novo Nordisk is not backing down from a fight.
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