Novo Nordisk’s sales were up 15% to 229.9bn Danish Kroner (DKK) in the first nine months of 2025, when ignoring currency moves.
Sales of anti-obesity injection Wegovy were the largest contributor to the uplift and grew 54%. Declines in legacy treatments Victoza and Saxenda were the biggest drag on top-line growth.
Operating profit grew by 10% to 95.9bn DKK, restrained by around 9 billion DKK of restructuring charges. On an underlying basis there was an increase of 21% despite a deterioration in gross margins.
Free cash flow fell 11% to 63.9 billion DKK reflecting increased capital expenditure. The company had net debt of 68.6 billion DKK. Novo Nordisk returned 51.8 billion DKK to shareholders in dividends and buybacks.
Full year sales growth guidance was lowered from 8-14% to 8-11%, with expected operating profit growth of 4-7% down from 4-10%.
The shares were flat in mid-morning trading.
Our view
Novo Nordisk’s third quarter results revealed yet another downgrade to recently trimmed guidance, and investor confidence ebbed away further as the day progressed. Cost-cutting is one lever the group’s looking to pull on to stop the rot, with some of the planned 8bn DKK of annual cost savings to be directed towards sales and research initiatives.
We still think the company has a very large opportunity ahead, but new CEO Mike Doustdar has his work cut out if he’s to win back investors trust. Diversifying Novo’s therapeutic focus and regaining the upper hand in bringing differentiated anti-obesity products to market are targets we’d like to see prioritised.
Acquisitions offer a potential shortcut, but multi-billion-dollar investments for companies without product approvals carries a high level of risk. Novo’s ongoing bidding war for Metsera is a prime example. The prospect of a once-monthly weight-loss medicine is a tantalising one, but $10bn is a hefty price for a company with no revenues.
In the United States, Novo’s been losing market share in the all-important GLP1 class of drugs for diabetes and weight loss. Competition is also starting to hold back growth in international markets. With rival Eli Lilly’s competing product comparing well on both price and efficacy, that’s perhaps no surprise
We’re encouraged by recent distribution deals. Novo’s also edging ahead in the race to bring an oral candidate to the market in the US. That’s another opportunity to claw back some ground, but approval still isn’t guaranteed. There’s plenty of work still to do to recapture the high ground.
Downwards pressure on pricing is another headwind to contend with, but a recent deal struck with the US authorities doesn’t look to be too punishing, while the addition of Medicare coverage has the potential to significantly expand the addressable market.
With the valuation under pressure, Novo’s dividend yield looks more meaningful than it has for a while. But share buybacks have been placed on pause following a period of high investment, and no payouts can be assured.
We still think the company has a huge opportunity ahead and there’s not much growth priced into the valuation. If the new CEO can steady the ship, there could be some significant upside on offer. But despite the weakness in the valuation, the shares are still proving sensitive to disappointments. With plenty of execution risk ahead, investors may still need to stomach some volatility.
Environmental, social and governance (ESG) risk
The pharmaceuticals sector is relatively high-risk in terms of ESG. Product governance, particularly with safety and marketing, and affordable access to treatment are the key risk drivers. Labour relations, business ethics and bribery and corruption are also contributors to ESG risk.
According to Sustainalytics, Novo Nordisk's management of ESG risks is strong.
Executive pay is linked to both financial and non-financial targets, including sustainability targets, though it's unclear exactly how the two are linked. Novo Nordisk's product quality and safety programmes are adequate. The company also addresses pricing and access to medicine in emerging markets and the US. In general, Novo Nordisk has strong policies and programmes to address business ethics issues, but fails to address anti-competitive practices and has been implicated in alleged price fixing and questionable promotional activity controversies.
Novo Nordisk key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.