Has Novo Nordisk Hit Bottom? 50% Price Cut and MASH Exclusivity Spark Growth Momentum

TradingKey - Amid competition from Eli Lilly and generic drugmakers, obesity drug leader Novo Nordisk (NVO) has seen its stock nearly halved year-to-date. After reporting a below-expected Q2 earnings, Novo Nordisk’s shares appear to be recovering from a bottom, driven by a 50% price reduction for Ozempic and new-use expansion for its weight-loss drug Wegovy.

On Monday, August 18, Novo Nordisk announced it would adjust the price of Ozempic on its self-pay pharmacy platform, NovoCare, to $499 per month — about half the U.S. list price.

At the same time, Novo Nordisk is partnering with the prescription discount platform GoodRx, allowing patients to purchase Ozempic and the weight-loss drug Wegovy at the same $499 monthly price across pharmacies nationwide.

Due to widespread shortages of weight-loss drugs, many patients have long been unable to directly purchase Novo Nordisk’s weight-loss medications and instead turned to cheaper compounded alternatives through telehealth platforms like Hims & Hers. 

Starting in March, Novo Nordisk followed Eli Lilly’s lead by launching a new direct-to-consumer online pharmacy, NovoCare, to sell Wegovy directly to consumers. This cash-pay option serves millions of patients without insurance coverage for the injection, priced at $499 per month — significantly below the $1,350 list price.

The company’s latest move to apply a similar strategy to Ozempic aims to expand the drug’s accessibility and offer greater affordability. BMO Capital Markets analysts said this strategy directly targets chain pharmacies and is a modest positive for Novo Nordisk’s stock.

In addition, the U.S. Food and Drug Administration (FDA) approved last Friday a new use for Wegovy in treating metabolic dysfunction-associated steatohepatitis (MASH) — making it the first and only GLP-1 therapy approved for MASH.

MASH is characterized by fat accumulation in the liver, leading to inflammation and damage, affecting approximately 5% of U.S. adults. Analysts believe Novo Nordisk’s breakthrough in MASH gives it a first-mover advantage over rival Eli Lilly in this field.

BMO analysts said the MASH approval could begin to shift momentum for Novo Nordisk, which had a difficult start to the year, as competition from compounded drug manufacturers and a series of guidance downgrades weighed heavily on the stock.

From the beginning of the year to the release of its Q2 earnings, Novo Nordisk’s stock trended downward, hitting a year-low with a decline of over 47%. Since then, the stock has rebounded 15% in fewer than ten trading days. According to TradingKey, the average analyst target price for the company is $70.64, implying about 35% upside from current levels.

Novo Nordisk Stock Price, Source: TradingKey