Novo Nordisk A/S (NYSE:NVO) experienced a significant drop in its stock price on Wednesday after the company released a forecast for fiscal year 2026 that fell short of market expectations. The stock has retreated toward the lower boundary of its 52-week trading range of $43.08 to $93.80, reflecting investor concerns about the future revenue trajectory.
On Tuesday, the company provided guidance anticipating that its adjusted sales growth for 2026, calculated excluding revenue from the reversal of 340B provisions, will contract by 5% to 13% at constant exchange rates (CER). This outlook incorporates expected revenue headwinds due to lower realized prices, which are influenced by factors such as the “Most Favoured Nations” pricing agreement affecting the U.S. market and patent expirations on the semaglutide molecule in select international markets. Additionally, increased competition within the pharmaceutical sector has contributed to these subdued growth expectations.
Recent Performance and Earnings Details
In its latest financial results, Novo Nordisk posted earnings per share of 94 cents (6.44 Danish kroner), surpassing analyst consensus estimates of 89 cents per share. However, adjusted net profit declined by 6% to 28.66 billion Danish kroner, reflecting some margin pressures.
During the fourth quarter of 2025, the company generated sales of approximately $12.34 billion (79.14 billion Danish kroner), outperforming expectations, which stood at $12.08 billion. Despite this, sales experienced a decrease of 8% in Danish kroner terms and a 2% decline at CER relative to the same period in 2024, largely influenced by underperformance in the U.S. market segment.
A breakdown of sales by therapeutic categories for the quarter showed a 5% decline at CER in GLP-1 diabetes treatments, totaling 37.53 billion Danish kroner. Conversely, sales in the obesity care segment rose by 11% to 22.45 billion Danish kroner. Insulin product sales dropped by 10% to 13.40 billion Danish kroner, while sales of treatments for rare diseases remained steady at 5.35 billion Danish kroner.
The company’s operating profit declined by 14% to 31.74 billion Danish kroner, or 4% at constant exchange rates. This reduction was driven by lower sales volumes as well as increased amortization and depreciation expenses linked to three former manufacturing sites acquired from Catalent. Reflecting these pressures, the operating margin contracted from 42.9% in the previous year to 40.1%.
Notably, sales of Novo Nordisk’s flagship drug Ozempic edged up slightly by 1% to 31.83 billion Danish kroner, while sales of Wegovy, another key obesity treatment, surged by 17% to 21.86 billion Danish kroner.
To potentially support shareholder value, the company also announced plans for a share repurchase program in 2026 with a maximum allocation of 15 billion Danish kroner.
Management Perspectives and Forward-Looking Statements
Mike Doustdar, president and CEO of Novo Nordisk, addressed the challenging pricing environment the company expects to confront in 2026 amid growing market competitiveness. However, he expressed optimism regarding the early adoption of the Wegovy tablet in the United States and reaffirmed the company’s confidence in driving volume growth in upcoming years.
The company also anticipates regulatory decisions on next-generation treatments, including Mim8 for haemophilia and CagriSema for obesity, later this year. Several research and development milestones are expected, including phase 3 clinical trial results for etavopivat and ziltivekimab, which may impact future growth trajectories.
Pipeline Developments and Project Terminations
In terms of pipeline adjustments, Novo Nordisk has discontinued a phase 1 clinical trial involving an oral NRLP3 inhibitor designated NN6705, terminating further development based on portfolio strategic considerations rather than safety or tolerability concerns. The firm remains committed to pursuing other preclinical NLRP3 inhibitors.
Additionally, the company ceased development of the Pumpsulin project, which is in early-phase trials, again driven by portfolio review decisions. This phase 1 trial will proceed to completion according to initial plans.
Further, development efforts for TMPRSS6, employing RNA interference in early stages for treating a rare blood disorder, were also halted due to portfolio considerations.
Market Reaction
Following this comprehensive update, Novo Nordisk’s shares declined 4.27% during premarket trading on Wednesday, closing around $48.15 according to market data.