Novo Nordisk Pays the Price for Arrogance: Who Will Claim the Next 'Blockbuster Drug' Crown?

Just over two months ago, then-CEO Lars Fruergaard Jorgensen announced his resignation after “reaching an agreement” with the board of directors, citing pressure from “recent market challenges” and a sharp decline in the company’s stock price.

This development has sparked widespread external scrutiny of Novo Nordisk’s leadership and its future strategic direction. The pharmaceutical giant, which once ascended to the pinnacle of the global industry with its semaglutide-based therapies, is now confronting an unprecedented crisis of confidence and market turbulence.

Semaglutide, the product series underpinning Novo Nordisk’s brilliance, has now become the epicenter of a performance “backlash.” The originator product is facing a pincer movement from “legitimate generics,” with channel dilution and pricing dilemmas compounding each other. Meanwhile, Eli Lilly’s tirzepatide is closing in step by step, leveraging superior clinical efficacy and astonishing growth rates. Amidst internal troubles and external threats, Novo Nordisk’s GLP-1 myth is teetering on the brink.

The “encirclement and suppression” tactics employed by domestic Chinese pharmaceutical companies are also not to be underestimated. Domestically produced GLP-1 drugs are accelerating their clinical trials and gradually entering the market, rapidly capturing market share by leveraging cost advantages, policy benefits, and channel flexibility. The PD-1 sector, home to the previous generation’s “blockbuster drug” Keytruda, is also undergoing rapid evolution, with domestic alternatives continuously challenging international giants and driving a reshaping of the global innovative drug market landscape.

On the other hand, Novo Nordisk’s next-generation GLP-1-based therapies, such as GIP/GLP-1 and GLP-1/GIP/glucagon (GCG) agonists, are lagging far behind those of competitors like Eli Lilly; thus, these distant solutions cannot address immediate needs. Industry insiders told VCBeat that Novo Nordisk should “follow Eli Lilly’s playbook,” suggesting the development of a combination of semaglutide with an ActRII-targeting agent, or the combined use of its investigational GLP-1/GIP dual agonist with an ActRII-targeted drug.

Are the aforementioned recommendations feasible? Where should Novo Nordisk go from here? Can semaglutide, once unrivaled, hold onto its global title as the “blockbuster drug king,” or will it yield to emerging competitors with superior clinical and market advantages? These are the questions facing Maziar Mike Doustdar, the new leader at Novo Nordisk, who now finds himself at the eye of the storm. The industry awaits his answers.

01.

Two Downward Revisions to Earnings Forecasts; Leadership Change Turmoil Persists

Leadership Changes Fail to Quell Market Turmoil.

Investors are generally skeptical about internal successors. Although new CEO Maziar Mike Doustdar has long overseen Novo Nordisk’s global commercial operations outside the United States, he lacks direct operational experience in the U.S. market. There are concerns that he may struggle to navigate the complex and critical U.S. market environment, making it difficult to reverse the company’s competitive position and stabilize its largest revenue source.

Some analysts have bluntly expressed surprise at Novo Nordisk’s major strategic decision regarding its leadership selection.

On the morning of July 29, U.S. stocks experienced a "Black Tuesday"-style plunge in Novo Nordisk's share price, which fell more than 20% in pre-market trading before closing down 21.83% at $53.94 per share. Its total market capitalization dropped to $239.443 billion, wiping out over $60 billion in value overnight.

Accompanying the leadership turmoil, Novo Nordisk has lowered its performance guidance twice in the short term.

Just one week before former CEO Lars Fruergaard Jorgensen stepped down, the company lowered its sales and profit forecasts, while Novo Nordisk’s stock price has cumulatively fallen by more than 50% since mid-2024.

To make matters worse, before the market opened on July 29, the company issued another announcement stating that its full-year 2025 sales growth forecast (at constant exchange rates) had been lowered from the previous range of 13%-21% to 8%-14%; the operating profit growth target was also reduced from 16%-24% to 10%-16%.

It is worth noting that Novo Nordisk still achieved an 18% year-on-year increase in sales and a 29% growth in operating profit in the first half of 2025. This clearly indicates that the company holds a pessimistic outlook on its performance prospects for the second half of the year.

Semaglutide: The Making and the Breaking

The successive launches of Wegovy and Ozempic once sent Novo Nordisk’s stock price soaring. These two blockbuster drugs, both based on the same core ingredient—semaglutide—have drawn significant attention from the medical community and capital markets worldwide. At its peak, Novo Nordisk’s market capitalization even surpassed Denmark’s annual gross domestic product, making it the most valuable company in Europe.

Now, Novo Nordisk candidly stated in its announcement that the downward revision of its performance expectations is mainly concentrated in the second half of 2025. The reason lies in the multiple pressures it faces in the U.S. market: Wegovy (the weight-loss version) has expanded more slowly than expected in the U.S. obesity market, Ozempic (the diabetes version) shows a slowing growth trend in the diabetes market, and meanwhile, the penetration rate in international markets has also failed to meet the company's established targets.

02.

Shortages Create a Window for “Legitimate Generics,” Diluting the Originator Market

Behind Novo Nordisk’s Sharp Decline in Performance Lie Multiple Deep-Seated Reasons.

In 2022, Wegovy and Ozempic were successively added to the U.S. FDA’s drug shortage list. At that time, they were the only approved semaglutide injectables.

Under federal regulations, when an FDA-approved drug is in shortage, eligible compounding pharmacies may legally prepare alternative versions for a limited period to meet patients’ clinical needs. This “enforcement discretion” policy has created a gray area of legality for pharmacies, spurring the proliferation of compounded semaglutide injections that have not undergone FDA review and are priced significantly lower than the originator product. Although these compounded formulations lack formal FDA recognition of safety or efficacy, their substantial price advantage has rapidly filled market gaps, meeting the needs of a large number of cost-sensitive patients and leading to swift diffusion across the U.S. market. In response to this phenomenon, Novo Nordisk has repeatedly resorted to legal action, suing relevant pharmaceutical companies for “illegally selling unapproved copycat products.”

Although the FDA issued an official statement in February 2025 announcing that the shortage of semaglutide had been recently resolved and stipulating deadlines for compounding pharmacies to cease production (April 22, 2025, for Section 503A facilities, and May 22, 2025, for Section 503B facilities), a substantial volume of compounded medications had already deeply penetrated the market prior to these dates.

Industry insiders estimate that, at the time, large U.S. compounding pharmacies were already providing standard doses of semaglutide or tirzepatide to as many as 2 million patients. These patients gradually developed adaptation to and dependence on the lower-priced versions during use, leading to structural dilution of Wegovy’s originator product in terms of pricing and distribution channels, with sluggish demand recovery. This cost-driven “preemptive” market penetration has become a significant constraint hindering the rebound of Wegovy’s market share in the United States.

Meanwhile, tirzepatide, the GLP-1 receptor agonist launched by competitor Eli Lilly, has demonstrated robust performance in weight loss and cardiovascular benefits. Its pivotal SURMOUNT-5 clinical trial revealed that, in a 72-week head-to-head comparative study, tirzepatide achieved a mean weight reduction of 20.2%, significantly outperforming semaglutide’s 13.7%. Researchers noted that these findings further solidify tirzepatide’s leading position in the GLP-1 therapeutic landscape, garnering greater recognition within both the medical community and the market, and establishing it as a formidable rival that Novo Nordisk must take seriously.

In the Chinese market, the patent for semaglutide is expected to expire in 2026 (or potentially become invalid earlier due to rulings on patent validity). Leveraging advantages such as flexible distribution channels, affordable pricing, and strong penetration into lower-tier markets, domestic companies have rapidly established their presence. According to incomplete statistics, at least 15 companies in China are currently developing generic versions of Ozempic/Wegovy, with 11 products having entered late-stage clinical trials. Once these domestically produced alternatives hit the market, they will exert substantial pressure on Novo Nordisk in terms of pricing structures and sales networks.

Goldman Sachs analysts pointed out that if generic drug products can meet standards in terms of safety and efficacy, the market price of semaglutide in China is expected to drop by approximately 25%, directly squeezing Novo Nordisk's profit margins.

03.

The Race for the Throne: Who Will Claim the Title of “Drug King”?

Novo Nordisk’s semaglutide drug series rapidly fell from its pedestal after rising to prominence, with the underlying structural shifts having long been foreseeable. In fact, the global pharmaceutical market is undergoing a profound power transition.

Between 2023 and 2024, Novo Nordisk’s semaglutide-based drugs firmly remained among the best-selling pharmaceuticals worldwide. Ozempic’s sales rose by 25.8% year-on-year to reach $17.5 billion, while its sister product, Wegovy, surged by 83%, rapidly climbing to the top of the rankings.

The Q1 2025 financial report shows that global sales of the semaglutide product series reached DKK 55.776 billion, equivalent to approximately USD 7.864 billion, accounting for about 71% of the company's total revenue, indicating a high degree of business concentration.

During the same period, Merck’s PD-1 antibody Keytruda (commonly known as “K drug”) achieved global sales of approximately $7.2 billion, representing a year-on-year increase of about 4%. Despite Keytruda’s long-term steady growth, semaglutide surpassed it in both sales volume and growth rate, becoming the highest-grossing single drug worldwide in the first quarter of 2025.

However, its status as the “blockbuster drug king” has yet to be firmly established, and it already faces multiple challenges within the GLP-1 therapeutic area.

In its first-quarter 2025 financial report, Eli Lilly disclosed that its two products featuring tirzepatide, a dual GLP-1/GIP receptor agonist—Mounjaro and Zepbound—made significant contributions to overall revenue. Data showed that Mounjaro’s global sales reached $3.84 billion, representing a 113% year-over-year increase; U.S. sales of Zepbound amounted to $2.31 billion, compared with just $517.4 million in the same period of 2024.

Although tirzepatide has not yet surpassed semaglutide in total revenue, its remarkable growth rate, combined with significant advantages in clinical weight loss efficacy, has demonstrated strong momentum in catching up.

Beyond the global rivalry between Novo Nordisk and Eli Lilly, China’s GLP-1 drug development is also accelerating its rise.

In March 2024, HDM1005, a dual GLP-1/GIP receptor agonist injection independently developed by Huadong Medicine, was approved for clinical trials in China. It subsequently received clinical trial approval in the United States in April, marking further progress in the globalization of its weight management pipeline.

Innovent Biologics has made industry headlines with Mazdutide, China’s first independently developed dual GLP-1/GIP receptor agonist. Approved in June 2025, the drug demonstrates weight-loss efficacy comparable to semaglutide and tirzepatide, while its relatively reasonable pricing makes it more attractive to price-sensitive consumers.

On the evening of July 30, Madrigal Pharmaceuticals announced an agreement with CSPC Pharmaceutical Group to secure exclusive global licensing rights for its small-molecule oral GLP-1 receptor agonist, SYH2086, for an upfront payment of $120 million. This development has once again drawn industry attention, underscoring the appeal and strategic value of oral GLP-1 products in the global market.

Notably, despite briefly losing its title as the “blockbuster drug king,” PD-1 antibodies have maintained robust growth, firmly establishing themselves as the “revenue cornerstone” in the oncology sector.

According to market forecasts, the global market size for PD-1/PD-L1 inhibitors is projected to reach $62.23 billion in 2025 and is expected to grow to $204.31 billion by 2032, with a compound annual growth rate (CAGR) of 18.5% from 2025 to 2032.

Among multinational pharmaceutical companies, Merck’s Keytruda remains the undisputed leader in oncology treatment. Its continuously expanding indications cover multiple high-incidence cancers, including non-small cell lung cancer, head and neck squamous cell carcinoma, triple-negative breast cancer, and esophageal cancer, providing robust support for its global sales.

Meanwhile, Chinese domestic PD‑1/PD‑L1 pharmaceutical companies have been increasingly active in recent years, with products from multiple firms gradually entering the international market.

BeiGene, Junshi Biosciences, Hengrui Medicine, and Akeso, among others, have successively obtained marketing approval for their PD-1 products in China, with some products accelerating their expansion into overseas markets. The global commercialization capability of domestically produced PD-1 drugs is gradually gaining recognition.

Furthermore, compared with imported drugs, China’s independently developed PD‑1 products have a clear price advantage. Domestic manufacturers have further widened the price gap with imported drugs by rapidly securing inclusion in the National Reimbursement Drug List (NRDL), and have quickly expanded their market share by leveraging NRDL coverage and a large patient base. This “low-price penetration + NRDL-driven” strategy has helped domestic PD‑1 products secure a favorable position amid policy support and in grassroots markets.

Faced with the dual threat of predators ahead and pursuers behind, established giants like Novo Nordisk must rapidly identify their next growth pillar in today’s global landscape, driven by the twin engines of innovation speed and market competition. Otherwise, the throne of the “blockbuster drug king” may gradually tilt toward emerging players better adept at capturing clinical value and mastering market rhythms.