What's next for Novo Noridsk? Headwinds and Tailwinds

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=== SUMMARY === - The post analyzes the major headwinds (US drug price cuts, clinical trial setbacks) and tailwinds (oral Wegovy pill, potential cardiovascular benefits) facing Novo Nordisk. - The author's thesis is that despite significant challenges, the market has likely priced in the bad news, and the company's stock is currently undervalued based on a conservative DCF model. - This is well-researched DD, presenting a balanced view with specific data points, clinical trial names, and a quantitative valuation model. === SENTIMENT === BULLISH === TRADE IDEAS === TICKER - DIRECTION | confidence: 0.90 | sentiment: +0.70 Speaker: u/stefanliemawan Thesis: 1. THE FACT: The author's DCF calculation, using conservative assumptions for revenue growth and margins, suggests a fair value of DKK 272, which is ~10% above the current price. 2. THE BRIDGE: This valuation implies that the market has overreacted to the negative news (TrumpRx price cuts, CagriSema trial results), creating a mispricing opportunity for a fundamentally strong company. 3. THE VERDICT: The post argues for a long position in Novo Nordisk, as the stock appears undervalued with the market having already priced in the significant headwinds. 4. RISKS: Eli Lilly's competing drugs could prove superior (e.g., in cardiovascular outcomes), further government price controls could be enacted, or Novo Nordisk could fail to offset price cuts with increased sales volume. Timeframe: medium-term Key Points: - DCF model suggests ~10% undervaluation. - Negative news (price cuts, trial data) is priced in. - Oral Wegovy pill provides a first-mover advantage. - Potential cardiovascular benefits vs. competitors. - Focus on increasing sales volume to offset price cuts. TICKER - DIRECTION | confidence: 0.70 | sentiment: -0.30 Speaker: u/stefanliemawan Thesis: 1. THE FACT: Eli Lilly's tirzepatide showed superior weight loss results (2.5% more) compared to Novo Nordisk's CagriSema in a recent trial. HSBC also recently cut its

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We all know that it has not been a great few years for Novo Nordisk. Suffice to say that the company are currently facing enormous challenges.

Here I analyse some of the biggest headwinds and tailwinds for the company.

**Headwind #1: the Most Favoured Nation deal with the Trump administration.**  
The TrumpRx platform directly cut Ozempic and Wegovy prices from $1000 and $1350 to a flat $350 for both, 65% and 75% reduction. Even worse, from January 2027, the official list price (not only from TrumpRx) for both injectables will be a flat $675 a month.

*fyi, I do agree that drug prices in the US is a lot more expensive than in other countries, and that this is a problem for US citizens. But the Trump administration literally blackmailed pharma companies and made them cut by more than 50%, literally overnight. I think they should've given more time.*

**Headwind #2: CagriSema's Failure**  
We've seen the most recent trial on CagriSema delivered around 2.5% less in weight loss than tirzapetide 15mg (highest dose). Essentially, no new better drugs compared to Eli Lilly.  
But the trial was also open-label, which might introduce bias. Over 40% of investigators (doctors running the trials) had prior experience with tirzepatide.

*There is still no direct answers on why they decided to do an open-label trial.*

Despite the above, I still believe that Novo Nordisk has a few tailwinds it can capitalise.

**Tailwind #1: Wegovy Pills (obviously)**  
More than 170,000 people were taking the Wegovy pill, only three weeks after the launch. With a first-mover advantage here, Novo Nordisk enjoy a monopoly on weight loss pills, *for now.* I think people also underestimates the barrier between injectables and oral pill, as pills is significantly more convenient to store, consume, and **adhere to**. As in, it is much easier to keep using weight loss drugs for months or years if it was in a form of daily pill, rather than a weekly painful injection.

*Eli Lilly also just recently got a price cut from* [HSBC](https://www.bloomberg.com/news/articles/2026-03-17/lilly-lly-gets-lone-sell-as-hsbc-sees-more-weight-loss-drug-price-cuts), *citing over inflated investor expectations.*

**Tailwind #2: Lower Cardiovascular Risk**  
The jury is still out for this one as Lilly's SURMOUNT-MMO trial is ongoing. But, for now, based on the STEER result: "*semaglutide was associated with early and significantly greater reductions in the risk of rMACE-3 and rMACE-5 versus tirzepatide among patients with overweight or obesity and ASCVD but without diabetes."*

So even if tirzapetide gives more weight loss, it might also introduce more cardiovascular risk. Semaglutide might be the one to prescribe for people with cardiovascular risk, and obese people have a significantly higher risk of cardiovascular disease.

**DCF Calculation**  
Running a DCF with deliberately conservative assumptions:

* \-9% revenue growth in 2026, normalising to 10% by 2030, never recovering to prior 20% levels, 
* EBIT margins dropping to 33% in 2026, then staying compressed at \~40%

implied a fair value of DKK 272, \~10% undervalued.   
This could suggest that most of the bad news is already priced in.

**Volume**  
As with any other pharma companies facing price cuts from Washington, they would need to offset this by increasing volume.  
I think Novo Nordisk is doing the right thing by partnering with Hims, one amongst the many partnership they announced recently, across countries and companies. What they need to focus on now is channel, increasing sales volume, and reaching as many patients as possible.

*Not financial advice. Do your own research.*  
*Not a single shred of AI is used in this post.*

Full analysis: [here](https://open.substack.com/pub/stefanliemawan/p/whats-next-for-novo-nordisk?r=2wzuop&amp;utm_campaign=post&amp;utm_medium=web&amp;showWelcomeOnShare=true)

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