Novo Nordisk’s Strategic Pivot Amid Chinese Patent Ruling

A recent decision by China's Supreme Court has upheld Novo Nordisk's patent for semaglutide, the active ingredient in its blockbuster drugs Wegovy and Ozempic. The protection will remain in force until its scheduled expiration in March 2026. However, the Danish pharmaceutical giant was quick to temper investor enthusiasm, stating that this legal confirmation does not alter its existing financial forecasts. The company continues to anticipate a negative impact on its sales growth for 2026, coinciding with the patent's lapse and the expected influx of generic versions from Chinese manufacturers.

In a related development that coincided with the court's announcement, it was revealed that Novo Nordisk implemented significant price cuts for Wegovy in China late last December, with reductions reaching up to 50%. This aggressive pricing strategy signals a clear shift in focus from protecting profit margins to aggressively defending market share.

This pre-emptive move is designed to build brand loyalty among patients before domestic competitors, such as CSPC Pharmaceutical Group, introduce their lower-cost semaglutide alternatives. With an estimated 148 million people living with diabetes in China, the objective is to secure as many prescriptions as possible, even if the profit earned per patient declines.

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

Growth Ambitions Shift to American Shores

While adopting a defensive posture in Asia, Novo Nordisk is looking to the United States to drive its expansion. The U.S. Food and Drug Administration (FDA) granted approval for an oral version of Wegovy on December 23, opening access to a new patient demographic: those averse to injectable treatments. Management hopes that success in this segment will help offset anticipated revenue shortfalls in Asia and stabilize overall earnings.

The strategic blueprint for 2026 is now evident: defend existing ground in China while aggressively pursuing new opportunities in the U.S. This two-pronged approach aims to reassure investors following a challenging period that saw the company's shares lose approximately 40% of their value in 2025.

Financial Clarity Awaits Quarterly Report

The upcoming quarterly report, scheduled for early February, is expected to provide detailed quantification of these opposing market forces. Analysts will scrutinize the updated sales guidance for 2026, paying particular attention to the rate of adoption for oral Wegovy in the U.S. and whether its revenue can compensate for the projected losses in China beginning in March. At the very least, the court's ruling has eliminated the worst-case scenario of a retroactive patent invalidation, providing a clearer, albeit challenging, path forward.