Novo Nordisk Stock Whipsawed by GLP-1 Pill Fears: Relief Ahead?

Danish obesity drugmaker Novo Nordisk NVO has had a turbulent few days, with its shares coming under heavy pressure last week. A massive sell-off was sparked by the company’s downbeat 2026 outlook, which overshadowed its fourth-quarter performance that topped expectations.

The situation quickly worsened for Novo Nordisk after Hims & Hers Health HIMS announced plans to expand into the weight-loss space by launching a compounded oral semaglutide pill, offering a needle-free alternative to injectable therapies like NVO’s Wegovy. The move positions the company as a lower-cost, more accessible option in a market largely dominated by Novo Nordisk and Eli Lilly LLY.

This news further aggravated the sell-off of the Novo Nordisk stock. Compounded GLP-1 alternatives have already weighed on the company’s growth narrative in 2025 by curbing demand for its flagship Wegovy injection. HIMS’ move amplified skepticism that a similar dynamic could play out for NVO’s newly launched Wegovy pill, diluting expectations of a meaningful growth inflection.

The timing of the announcement was particularly damaging. Novo Nordisk recently rolled out the first GLP-1 pill approved in the United States for obesity and cardiovascular disease, priced at about $149 per month for starter doses, rising to as much as $299 for higher-strength doses over time. Against this backdrop, HIMS’ introductory $49 pricing for a needle-free alternative raised fears that cost-sensitive patients could gravitate toward compounded options, challenging the pricing power of Novo Nordisk despite strong underlying demand for GLP-1 therapies.

NVO pushed back by reiterating that it is the sole manufacturer of an FDA-approved oral semaglutide and signaled potential legal and regulatory action to protect its intellectual property and patient safety. The company also pointed to prior FDA warnings issued to HIMS over allegedly misleading GLP-1 advertising and highlighted updated obesity care guidelines discouraging compounded GLP-1 use due to safety and quality concerns.

Soon after, the FDA stepped in with a firm crackdown on non-FDA-approved compounded GLP-1 drugs being mass-marketed as alternatives to approved therapies, citing unresolved concerns around safety, quality and efficacy. The agency warned companies, including Hims & Hers Health and certain compounding pharmacies, against misleading consumer marketing and emphasized it could pursue enforcement actions, such as seizures and injunctions for violations of federal drug laws. The regulatory intervention eased investor fears, triggering a sharp rebound in Novo Nordisk shares, which surged 9.9% on Friday.

NVO stock is also up about 6% in the pre-market hours today after HIMS reportedly halted its plans to launch a lower-priced, compounded oral semaglutide pill after discussion with stakeholders over the weekend. Despite these developments, Novo Nordisk is far from out of the woods, as intense competition from compounded GLP-1 alternatives and a formidable rival in Eli Lilly continues to cloud its medium-to-long-term outlook in the obesity market. Moreover, escalating U.S. pricing pressure could weigh on margins and threaten its long-term profitability, even as demand for weight-loss therapies remains robust.

NVO’s Peers in the Obesity Space

Eli Lilly is Novo Nordisk’s fierce competitor in the diabetes/obesity space, which markets its tirzepatide-based drugs, Mounjaro (diabetes) and Zepbound (obesity). Despite being on the market for just over three years, Mounjaro and Zepbound have become LLY’s key top-line drivers. Eli Lilly has also filed a regulatory application seeking the approval of its oral GLP-1 pill, orforglipron, for obesity, which is currently under review by the FDA. A launch is expected later in the year. The HIMS announcement last week also dragged LLY shares lower before they rebounded.

The obesity space has garnered much of the spotlight over the past year due to the sizeable and still underpenetrated market opportunity. Smaller biotech firms, like Viking Therapeutics VKTX, are also advancing GLP-1-based therapies to challenge the incumbents. Viking Therapeutics is developing VK2735, both as oral and subcutaneous formulations, for the treatment of obesity. Last year, VKTX started two late-stage studies evaluating the subcutaneous formulation of VK2735. While one of these studies completed enrolment in November 2025 at a rapid pace, Viking Therapeutics expects to complete enrolment in the other study later in 2026.

NVO Stock’s Price, Valuation & Estimates

In the past six months, Novo Nordisk shares have lost 4.5% against the industry’s 34.5% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

NVO Stock Underperforms the Industry, Sector & the S&P 500

Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 14.31 forward earnings, which is lower than 18.76 for the industry. The stock is trading much below its five-year mean of 29.25.

NVO Stock Valuation

Earnings estimates for 2026 have declined from $3.55 to $3.32 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have declined from $3.65 to $3.39.

NVO Estimate Movement

Novo Nordisk currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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