Novo Nordisks stock keeps falling even when the news is good, and CEO Mike Doustdar just admitted why. Eli Lilly is beating Novo at its own game.
Doustdar sat down with CNBCs Jim Cramer this week to explain the disconnect. Novo, famous for its GLP-1 medication Ozempic, raised its full-year sales guidance on August 4, narrowing its projected annual decline from 8% to 3% at the midpoint. Investors sold anyway. NVO shares dropped roughly 6% that day.
A Beat That Still Lost
Doustdar walked through the math on air. Novo slashed prices on Ozempic and Wegovy last year to widen patient access, and volume hasnt caught up yet to offset those cuts. He compared it to basic arithmetic. Halving a price means you need double the volume just to break even, and volume never doubles on day one.
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That gap between falling average revenue per prescription and rising patient counts is exactly what has investors nervous. Novos obesity and diabetes drugs now make up around 90% of its business, compared to about 60% at Eli Lilly, leaving Novo more exposed to any pricing or competitive shock in that single category.
Doustdars Concession
Oral Wegovy sits at the center of this story. Novo launched the pill version of its weight-loss drug in January, and it quickly became one of the fastest-selling drugs in pharmaceutical history. Doctors have already written more than 5 million prescriptions for it, and 1.5 million patients now take it worldwide. That volume makes Novos stock reaction even harder to explain on the surface.
Cramer pressed him on why Eli Lilly‘s stock rally has outrun Novo’s despite a less dominant pill. Doustdar didnt dodge the question.
“Eli Lilly has been gaining market share. And theyre more diversified than Novo Nordisk… there is no secret that Lilly has been quite successful actually in having volume uptake and market share uptake above and beyond Novo.”
Despite Ozempic‘s success, Novo’s stock is struggling. Image Source: Trading View
He argued Lilly‘s ad campaign leans on an older, lower-dose version of Wegovy for comparison. Novo’s newer high-dose formulation matches Lilly‘s efficacy, according to Doustdar. That dispute sits at the center of Novo’s lawsuit against Lilly over its advertising claims.
The Pill Still Wins on Paper
The stock slump hasn‘t slowed the pill’s numbers. In Novo‘s own trials, the pill cuts weight by 17%, against 12% for Lilly’s rival pill, though the two drugs haven‘t faced off head-to-head. Doustdar called it the best product launch in pharmaceutical history, a claim that’s hard to dispute on volume alone.
Doustdar is betting that two straight quarters of improving trends will eventually pull the stock along with them. Whether that bet pays off depends on a simple race. Patient volume needs to outrun the price cuts fast enough to convince Wall Street the reset is actually over.