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(Sharecast News) - Shares in Novo Nordisk opened sharply lower on Wednesday, after the obesity drug specialist warned of thinning sales and profits.
The Ozempic manufacturer said the global GLP-1 market was expected to grow in the current year, while new treatments include higher doses and a pill version of weight-loss jab Wegovy. However, Novo warned that sales and profits were still expected to slide year-on-year, reversing a long run of growth.
Adjusted sales in the year to 31 December 2026 were forecast to decline by between 5% and 13%, weighed down by fierce competition, patent expiry in certain markets and pricing pressures, including Donald Trump's crackdown on drug costs.
Adjusted operating profits were also guided to fall between 5% and 13%.
As at 0830 GMT, the Danish stock had slumped 18%.
Mike Doustdar, Novo's newly-installed chief executive, said: "In 2026, Novo Nordisk will face pricing headwinds in an increasingly competitive market.
"However, we are very encouraged by the promising early uptake from the US launch of Wegovy pill, and we remain confident in our ability to drive volume growth over the coming years."
The update came as Novo published full-year earnings after markets closed on Tuesday. Sales rose 6%, or by 10% on a constant currency basis, to DKK309.1bn (£35.7bn). Operating profits eased 6% in Danish kroner but strengthened 6% on a constant currency basis, at DKK102.4bn.
Novo said that once costs relating to a company-wide shake-up of around DKK8bn were stripped out, profits rose 13% in constant currencies.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Novo resorted to one of the oldest tricks in the books yesterday evening by trying to sneak out bad news when nobody was watching. But when you're Europe's biggest pharmaceutical company there's no place to hide.
"Donald Trump's crusade on drug prices, patent expiration and competition all had their part to play. It wasn't all bad news, with an extremely strong launch for the Wegovy pill and a reminder of strong clinical progress in the next generation pipeline.
"But Doustdar [will] face some tough questions...[on] his first full-year earnings call later today. The hope is that unlike his predecessor, he's getting all his bad news out of the way at the beginning of the year."
Novo kick-tarted the obesity jab market in 2021, when it launched Wegovy. Sales and profits boomed as demand surged at unprecedented rates, but rival treatments have since come to market, including Eli Lilly's mounjaro, and pressure on prices has mounted.