Novo Nordisk Implodes After Wegovy Warning—Is The Weight-Loss Bubble Bursting?

Novo Nordisk A/S NVO suffered its worst trading session on record Tuesday, plunging as much as 25% in European markets after issuing a surprise profit warning tied to its blockbuster obesity drug Wegovy and appointing a new CEO.

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The Danish pharmaceutical giant now expects 2025 sales to grow 8%–14%, down from a previous range of 13%–21%, and has cut its operating profit forecast to 10%–16%, from 16%–24%. That marks the second guidance cut of the year.

Shares have now fallen 35% year-to-date and are down a staggering 65% from their June 2023 all-time high, wiping out billions in market cap.

Goldman Sachs analyst James Quigley wrote that the reduced expectations were driven by "no change in the compounded semaglutide headwinds and slower-than-expected commercial progress for both Ozempic and Wegovy, with reimbursement access not progressing as planned."

Novo Nordisk Crashes 26% in Worst Day On Record

Key Drivers: Compounding, Competition And Slow Reimbursement

The company blamed ongoing use of compounded semaglutide drugs in the U.S. for undercutting demand for Wegovy, with the CFO’s estimates suggesting over 1 million patients are on off-brand versions.

Novo has sued telehealth firms like Hims & Hers Health Inc. HIMS for marketing what it calls knockoff Wegovy, warning about the risks of illicit or unregulated active ingredients.

Meanwhile, lower-than-expected growth for Ozempic in the U.S. diabetes market and sluggish Wegovy penetration overseas also contributed to the downgrade.

"We expect investors to remain cautious on the outlook for Novo and the obesity market, particularly given the slow resolution of compounding, which has been pushed into at least 2026, and due to concerns about potential further price cuts in order to drive access," Quigley said

Leadership Shakeup

Alongside the downgrade, Novo Nordisk appointed Maziar Mike Doustdar as CEO, effective Aug. 7. Currently head of international operations, Doustdar replaces Lars Fruergaard Jorgensen, ousted in May.

Analysts say Doustdar's challenge will be to expand U.S. Wegovy adoption while scaling international markets and managing intensifying competition from Eli Lilly Co.‘s LLY Zepbound.

Is the Weight-Loss Drug Trade Topping Out?

With Novo's crash, a broader question looms: Is the weight-loss trade entering correction territory?

The sharp shift in investor sentiment suggests that valuation multiples may no longer be justified if volume growth stalls and compounding remains unresolved into 2026.

NVO Price Action: Novo Nordisk shares were down 20.36% at $54.95 at the time of publication on Tuesday, according to Benzinga Pro data.

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