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For you non-readers, the Economist just did a pretty great, lengthy article about your favorite stock, Novo Nordisk, and how they lost the GLP-1 race to Eli Lilly, and what the CEO’s plan is to turn it around.

The plan to rescue Novo Nordisk
https://economist.com/business/2025/12/15/the-plan-to-rescue-novo-nordisk
from The Economist

Some summarization and my own facts added:

Novo claimed they had the “curse of leadership”. By being first to market with a GLP-1 drug, they had no idea how big the demand would be.

Novo should have owned this market, as they specialized in metabolic diseases and had a really long history with specialized forms of insulin. They modeled demand for Wegovy demand on Saxenda, which was an older less effective obesity drug, but this dramatically underestimated demand.

This led to Wegovy being placed on the shortage list in March 2022, and Ozempic being added in August 2022. Compounding pharmacies took advantage and sold the drug at steep discounts. Though Wegovy has been taken off the shortage list, over 1 million people are still using compounded semaglutide under loopholes like the “clinical difference” loophole.

If a doctor writes that a patient is allergic to a component of wegovy, or needs a dosage not manufactured by Novo, a compounder can just make a new formulation or a dosage that is not available. Sometimes compounders add a relatively benign ingredient to make a new formulation, which should technically not be allowed, but there is lax FDA enforcement of this rule.

Lilly saw all this play out, and mass produced Zepbound in anticipation of approval. When it gained approval in Nov 2023, they had plenty of stock. Mounjaro had already been placed on the shortage list, and Zepbound did briefly have to be placed on the shortage list as well, but the FDA declared the shortage resolved as of October 2024 (to the chagrin of compounders) and began strictly enforcing this after finalizing the Declaratory order in December 2025. So the shortage was shorter and compounders never got procedures and workarounds/loopholes as established as they did for Ozempic/Wegovy.

Lilly then did a head to head trial of Zepbound versus Wegovy (a ballsy move) in which Zepbound showed loss of 20% of body weight with Zepbound as compared to only 14% on Wegovy.

Finally, Lilly was early to recognize that there was a pool of patients who were willing to buy direct to consumer, cash-pay, from Lilly. They offered Zepbound for $400, much lower than the $1100 list price. Lilly started selling direct to consumer in Jan 2024, partnering with Form Health, True Pill, and Amazon pharmacy to provide telehealth prescriptions for the drugs and pharmacy fulfillment of the order

It took Novo until March 2025 to develop a similar direct to consumer route with Novocare pharmacy. They started to partner with HIMS and Hers, Ro, and LifeMD. All of these companies were offering compounded semaglutide at one point. Novo has run into friction with HIMS which has continued to offer compounded semaglutide - undercutting their business partner - but it seems like Novo is in talks to stop this for good.

Finally Novo fired their old CEO, Lars Jorgensen, and seven board members left in a major shakeup. The novo nordisk foundation owns a quarter of the drug makers shares, and is one of the wealthiest charitable organizations in the world. Its chairman, Lars Sorensen, took over as Chairman of Novo.

Maziar “Mike” Doustdar took over as CEO, promoted from VP of international operations in August 2025. He is the first non-Danish to lead the company. He is ethnically Austrian-Iranian, but grew up in the U.S. and has been characterized as “aggressive” and “speed focused” compared to prior CEOs. Sources at the company say he will be “ruthless” and do “what it takes” to recover.

In September, they cut 9000 jobs, including 5000 in Denmark, the biggest layoff ever in the company.

They have the oral version of Wegovy, and it looks like this oral version of Wegovy beat Lilly’s oral weight loss pill in total weight loss in comparisons of the trials. However there is an onerous requirement - it must be taken on an empty stomach and you have to wait 30 minutes before you eat. Lilly’s drug doesn’t require this. I’m not sure what compliance would be with such instructions, but I would estimate it would be low, which could impact absorption and efficacy in the real world.

Novo is also coming out with a higher dose Wegovy injectable. This higher dose actually compares with the weight loss of Zepbound.

They have struck deals with Costco and Wal-Mart to develop more direct to consumer routes.

Novo cut prices for Wegovy direct to $199/months for 2 months, rising to $349/month thereafter. Lilly is also cutting their direct to consumer monthly price to $299 for the 2.5 mg and $399 for the 5 mg dose. There is a risk that both start a price war.

It looks like their new deal with Medicare will allow Medicare coverage, at 1/3 price charged to other insurers, so this opens up a wider pool.

Novo will change its pipeline strategy as well. Most pharmaceutical companies rely on acquisitions of biotechs to build their pipelines these days. Until recently, Novo has relied heavily on internal development, which is costly and risky. They are shifting to a mix heavier weighted to acquisitions under Mike Doustdar, in line with other pharmas.

One risk is that semaglutide patent protection will be lost in China, India, and Brazil in 2026. This is a small amount of total sales of the drug, somewhere around 5-8%, but it means these will not be growth markets, and it will heavily need to depend on the U.S. and Europe.

The Economist suggests the biggest challenge wi the change to a more nimble, consumer facing company.

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