Novo Nordisk’s Wegovy once-daily oral pill for weight management has received FDA approval in the US. This marks the first approved oral GLP-1 therapy for weight management.
The pill delivered an average weight loss of 16.6% in recent trials – a comparable result to its injectable Wegovy.
Novo now expects to launch its oral Wegovy pill in the US in early January 2026.
The shares rose 9.9% on the day.
Our view
Novo Nordisk has found good news hard to come by this year, but the FDA’s approval of its oral Wegovy pill for weight management was a welcome relief. It’s the first of its kind and offers a more convenient alternative to the injectable version, with similar weight-loss results in recent trials. The pill’s set to be launched in the US in January 2026, and markets reacted positively to the news on the day.
We 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 after recent earnings downgrades. 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 competition to bolster pipelines in the sector is fierce. Novo’s recent attempt to acquire Metsera is a prime example. The prospect of a once-monthly weight-loss medicine was tantalising enough prospect for rival Pfizer to outgun Novo in a bidding war, 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.
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 recent slip-ups have dented investor confidence, and 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
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