Novo Nordisk Faces a Pivotal Year of Challenges and Strategic Shifts

The year 2026 presents a complex landscape for pharmaceutical giant Novo Nordisk. A confluence of factors, including significant price reductions for a key drug, looming patent expirations, and fierce competition in the obesity treatment sector, is applying considerable pressure on the company. Management is countering with new product launches and formulations in a critical effort to defend its market standing. The central question for investors is how effectively the company can navigate this dual mandate of protecting its existing business while pursuing new growth avenues.

A major defensive move has unfolded in China, where Novo Nordisk has slashed the list prices for its blockbuster weight-loss drug Wegovy by approximately 50% in several provinces. This preemptive strategy is directly linked to the impending expiration of the semaglutide substance patent in China in March 2026. Once this protection lapses, generic manufacturers are expected to enter the market, intensifying price competition. Analysts view this deep discount as an attempt to solidify market share and establish a stronger position before the generic wave hits, underscoring China's growing importance to the Wegovy revenue stream.

The market's reaction to these margin pressures is evident in the stock's performance. Shares have declined roughly 45% over a twelve-month period. The current price of 44.61 euros sits notably below the 200-day moving average of 50.94 euros, reflecting persistent investor concern.

A New Front in the Obesity War: Oral Wegovy

Offsetting some negative news is a significant regulatory win in the United States. In December, the U.S. Food and Drug Administration (FDA) approved an oral formulation of Wegovy specifically for weight management. This marks the first GLP‑1 pill explicitly cleared for this purpose, providing Novo Nordisk with a new entry point into a market historically dominated by injectables.

The company plans a rapid commercial rollout, introducing the tablet version in U.S. self-pay channels in early January. With an aggressive launch price set at about $149 per month, Novo Nordisk is targeting the business of compounding pharmacies. These entities have captured market share by offering customized, and often cheaper, GLP‑1 mixtures. Successfully recapturing this revenue could help mitigate some of the margin compression from international price reductions.

Intensifying Rivalry with Eli Lilly

Competition remains a dominant theme, with Eli Lilly posing the most significant threat. Lilly's oral weight-loss pill, Orforglipron, is anticipated to receive FDA approval by the second quarter of 2026, setting the stage for a direct head-to-head battle in the oral obesity therapy segment. This arena promises substantial volume due to the simpler administration of pills compared to injections.

Should investors sell immediately? Or is it worth buying Novo Nordisk?

From a valuation perspective, the stock has already seen a substantial correction. Novo Nordisk currently trades at about 14 times expected earnings, a discount to the healthcare sector average of 18.4. The company's market capitalization stands at approximately $227 billion, with a dividend yield of 3.30%. This valuation gap signals market skepticism regarding the firm's earnings trajectory in the coming years.

Pipeline Progress as a Critical Catalyst

The company's mid-term narrative heavily depends on its development pipeline. A key asset under watch is the experimental drug Amycretin, designed to target both the GLP‑1 and amylin systems. Currently in Phase 3 trials, initial interim results are expected in 2026. Positive data could reignite investor enthusiasm for a next-generation obesity treatment.

Concurrently, Novo Nordisk has submitted an application to the FDA for a higher-dose 7.2 mg Wegovy injection. Clinical studies for this dosage demonstrated an average weight reduction of 20.7%, a efficacy level comparable to Eli Lilly's Zepbound. Securing approval would strengthen the premium segment of Novo Nordisk's portfolio and help stabilize its competitive position against Lilly.

Structural Headwinds for 2026

Beyond the specific dynamics of Wegovy, Novo Nordisk confronts several broader structural challenges in 2026:

• Patent expirations in key markets including Brazil, Canada, and China.
• Price negotiations with Medicare in the U.S. under the Inflation Reduction Act.
• Potential pressure from consumer-directed pricing tools proposed by the Trump administration.
• Ongoing competition from U.S. compounding pharmacies offering lower-cost alternatives.

This mix of patent risks, regulatory cost pressures, and intense competition sets the stage for a demanding period. The technical picture aligns with this cautious outlook; the 14-day Relative Strength Index (RSI) sits at 34.8, indicating weaker recent demand for the shares.

Upcoming Earnings in Focus

Analysts' consensus rating for the stock is currently "Hold," with an average price target of $53.33. The next major catalyst is the quarterly earnings report scheduled for February 3, 2026. Market participants will scrutinize management's commentary for concrete progress on stabilizing U.S. market share, the early monetization of oral Wegovy, and the initial financial impact of international price cuts and patent expirations.