20-F: Novo Nordisk Navigates Transformation Amidst GLP-1 Market Shifts

Novo Nordisk reports 6.4% sales growth in 2025, driven by obesity and diabetes care, but anticipates a sales decline in 2026 due to increased competition and pricing pressures.

Summary

• Sales increased by 6% in DKK and 10% at constant exchange rates (CER) to DKK 309,064 million in 2025.
• Operating profit decreased by 1% in DKK but increased by 6% at CER to DKK 127,658 million, impacted by DKK 8 billion in one-off restructuring costs.
• Obesity care product sales grew by 26% in DKK and 31% at CER to DKK 82,347 million, with Wegovy revenue reaching DKK 79 billion.
• Diabetes care sales remained unchanged in DKK but increased by 4% at CER to DKK 207,109 million.
• Rare disease sales increased by 5% in DKK and 9% at CER to DKK 19,608 million.
• Global GLP-1 market share for Novo Nordisk was 45.8% in diabetes and 59.6% in obesity by volume.
• A company-wide transformation in 2025 led to a reduction of approximately 9,000 employees globally, with annualised savings of DKK 8 billion from 2026.
• Acquired Akero Therapeutics Inc. for $4.7 billion in cash, plus a Contingent Value Right (CVR) of $0.5 billion upon US regulatory approval of efruxifermin (EFX) for MASH.
• Wegovy pill (oral semaglutide 25 mg) was approved by the FDA for weight management and launched in Q1 2026.
• Ozempic received FDA approval to reduce the risk of kidney disease progression, kidney failure, and cardiovascular death in adults with type 2 diabetes and chronic kidney disease (CKD).
• The company expects 2026 adjusted sales growth at CER to be -5% to -13% and adjusted operating profit growth at CER to be -5% to -13%.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed to slightly negative report. While key products like Wegovy and Ozempic show strong sales, market share losses, a significant workforce reduction, and a projected sales and profit decline for 2026 indicate near-term headwinds. The strategic transformation and pipeline advancements are positive long-term, but the immediate outlook is challenging.

Positives

• Wegovy revenue grew 36% to DKK 79 billion in its fifth year after launch, demonstrating strong market acceptance.
• Ozempic sales increased by 6% in DKK and 10% at CER to DKK 127,089 million, maintaining its position as the company's best-performing product by sales.
• The Wegovy pill, the world's first and only once-daily oral GLP-1 therapy for weight management, received FDA approval and launched in Q1 2026, offering new treatment optionality.
• Ozempic received expanded FDA approval for reducing kidney disease progression and cardiovascular death in type 2 diabetes patients with CKD, enhancing its clinical profile.
• Acquisition of Akero Therapeutics Inc. and its Phase 3 asset efruxifermin (EFX) strengthens the pipeline in metabolic dysfunction-associated steatohepatitis (MASH).
• The company initiated a company-wide transformation to simplify its organisation, improve decision-making speed, and reallocate resources towards growth opportunities in obesity and diabetes, with DKK 8 billion in annualised savings expected from 2026.
• Supply situation across products improved throughout 2025 due to continued scaling of manufacturing capabilities.
• The Supreme People's Court in China upheld Novo Nordisk's semaglutide compound patent in December 2025, recognizing its validity.
• An agreement with the U.S. Administration is expected to expand access and affordability for semaglutide medicines in 2026 through Medicare Part D and Medicaid, and the direct-to-patient self-pay channel.
• The company will recognize revenue of USD 4.2 billion in Q1 2026 related to 340B Drug Pricing Program claims, following a favorable ADR ruling.

Negatives

• Operating profit decreased by 0.5% as reported in DKK, primarily due to DKK 8 billion in one-off restructuring costs related to the company-wide transformation.
• Gross margin declined to 81.0% in 2025 from 84.7% in 2024, impacted by amortisations and depreciations related to acquired manufacturing sites and restructuring costs.
• Lost volume market share in the GLP-1 market for both obesity and diabetes in both US and ex-US markets due to increased competition.
• Ozempic lost its leading position in the US GLP-1 market for type 2 diabetes (measured by total weekly prescriptions) to a competing GLP-1 based product during 2025.
• The global branded obesity market leader position (Wegovy by total weekly prescriptions) was overtaken by a competing GLP-1 based product in early 2025.
• Rybelsus sales decreased by 5% in DKK and 2% at CER, impacted by reprioritisation towards other GLP-1 treatments.
• Victoza sales decreased by 45% in DKK and 43% at CER due to market shift towards once-weekly treatments and portfolio priorities.
• The company-wide transformation resulted in approximately 9,000 employees being let go globally.
• The share price decreased by 48% from DKK 624 at the end of 2024 to DKK 325 at the end of 2025.
• The share of renewable electricity for production sites dropped from 100% in 2024 to 86% in 2025 due to acquired sites without renewable electricity setup.
• Total GHG emissions (scope 1, 2, and 3) increased by 19% compared to 2024, challenging sustainability ambitions.
• A US FDA inspection at the Bloomington site (acquired from Catalent) received an 'Official Action Indicated' (OAI) status and subsequent warning letter.

Risks

• Cybersecurity breaches could disrupt business operations, lead to unintended disclosure of confidential information and personal data, and result in legal claims, significant regulatory penalties, and reputational damage.
• Failure to meet regulatory or ethical expectations on environmental impact, including climate change, could expose the company to increased regulatory and reputational risk, materially affecting business and financial condition.
• Portfolio dependency on semaglutide as the active pharmaceutical ingredient exposes the company to innovation risk if new treatments are not successfully developed.
• Geopolitical uncertainty, conflicts, and social unrest may lead to trade restrictions, tariffs, and reference pricing measures, impacting profitability.
• Healthcare reforms, including government-mandated or market-driven price decreases, can increase system complexity, regulatory uncertainty, and price pressure.
• Intensified competition from branded and generic competitors and compounders may lead to price pressure, lowered sales volumes, and supply rebalancing.
• Higher-than-expected demand or disruption of product supply due to geopolitical instability or quality issues may compromise product availability and represent a lost commercial opportunity.
• Exposure to product liability and legal proceedings and investigations, including those related to GLP-1-based medicines causing gastrointestinal injuries, could have a material impact.
• Changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection, and regulatory controls, pose risks.
• Unplanned loss of patents could impact sales, especially with the impending loss of exclusivity for semaglutide in certain markets.
• Reliance on information technology, including the risk of cybersecurity breaches, is a significant operational risk.
• Failure to recruit and retain the right employees, or maintain a culture of compliance, could adversely affect operations.
• Epidemics, pandemics, or other public health crises, and effects of domestic or international crises, civil unrest, war, or other conflict, could impact business.

Future Outlook

Novo Nordisk anticipates a challenging 2026, projecting adjusted sales growth at constant exchange rates (CER) to be -5% to -13% and adjusted operating profit growth at CER to be -5% to -13%. This outlook reflects continued global GLP-1 market expansion and increased patient reach, but is countered by lower realised prices due to the 'Most Favoured Nations' agreement in the US, loss of semaglutide exclusivity in some international markets, and non-recurrent positive gross-to-net sales adjustments from 2025. The company plans targeted investments in R&D and commercial activities, partly funded by savings from the 2025 transformation. Financial items (net) are expected to be a gain of DKK 2.3 billion, with an effective tax rate of 21-23%. Capital expenditure is projected to be around DKK 55 billion, and free cash flow is expected to be DKK 35-45 billion. The company will introduce new Strategic Aspirations at its Capital Markets Day on September 21, 2026.

Management Comments

• "The past year has been one of profound transformation; testing our resilience, sharpening our focus and positioning us for sustainable success in an increasingly dynamic healthcare landscape."
• "This extraordinary period taught us important lessons about serving consumer-driven markets."
• "We are not intimidated by this new reality; after all, our century-long experience in diabetes has taught us how to compete successfully in crowded markets."
• "The most challenging decision of 2025 was the reduction of our workforce – the largest in our company’s history."
• "Our path forward centres on expanding access whilst accelerating innovation."
• "When you have multiple ways to serve patients, patent cliffs become stepping stones to broader access."
• "As we enter 2026, I want to set realistic expectations. As you can see in our financial outlook for the year ahead, we are projecting a sales decline in 2026 and are not promising a rapid return to the extraordinary growth rates of recent years."
• "The hundreds of millions of people we are yet to reach represent an enormous opportunity."
• "That focus on putting patients health and wellbeing first remains our greatest strength."

Industry Context

StockSavvy.ai notes that Novo Nordisk operates in a rapidly evolving pharmaceutical landscape, particularly within the highly competitive GLP-1 market for obesity and diabetes. The entry of major pharmaceutical companies like Eli Lilly, and the rise of compounded drugs, have intensified competition, leading to market share losses for Novo Nordisk in 2025. The industry is also grappling with increasing pricing pressures from pharmacy benefit managers and governmental policies like the US Inflation Reduction Act. Novo Nordisk's strategic shift to focus on core therapeutic areas, coupled with significant R&D investments in next-generation GLP-1 therapies and oral formulations, positions it to defend its leadership. The company's proactive stance against illicit compounding and its efforts to expand access and affordability are critical in maintaining market integrity and patient trust amidst these trends.

Comparison to Industry Standards

• Novo Nordisk's global diabetes value market share decreased by 3.6 percentage points to 30.1% (MAT), indicating a competitive challenge against peers like Eli Lilly.
• In the global GLP-1 market, Novo Nordisk holds a 45.8% value market share, competing primarily with Eli Lilly, which has gained significant ground.
• In the global branded GLP-1 obesity market, Novo Nordisk is the market leader with a branded volume market share of 59.6%, but its leading position in the US (by total weekly prescriptions) was overtaken by a competing GLP-1 based product in early 2025.
• The company's dividend payout ratio for 2025 is 50.7%, which is below the 2024 pharma peer group average of 58.9%, suggesting a more conservative approach to shareholder returns compared to some industry counterparts.
• Novo Nordisk's Lost Time Injury Rate (LTIR) remained stable at 1.2 lost time injuries per million hours worked, which is considered satisfactory when benchmarked against peers, indicating strong health and safety performance.
• The increase in total GHG emissions by 19% in 2025, driven by production scale-up and acquisitions, presents a challenge to its sustainability ambitions compared to industry leaders actively reducing their carbon footprint.
• The acquisition of Akero Therapeutics Inc. for $4.7 billion (plus CVR) aligns with industry trends of strategic M&A to bolster pipelines in high-growth therapeutic areas like MASH, comparable to similar deals by major pharma players seeking diversification and innovation.

Management Changes

Corporate Governance

Legal Proceedings

• Novo Nordisk is defending numerous lawsuits, including putative class actions, relating to the pricing of diabetes medicines in the US, with allegations of conspiracy among manufacturers and PBMs to artificially inflate list prices.
• A qui tam lawsuit alleging Novo Nordisk provided kickbacks related to NovoSeven resulted in a defense verdict in November 2025, but the Relator and Washington State Attorney General have filed an appeal.
• Another qui tam lawsuit alleges Novo Nordisk provided kickbacks to physicians and caused false claims submissions related to Ozempic and Rybelsus, and wrongful termination of Relators' employment.
• Novo Nordisk, along with Eli Lilly, are defendants in numerous product liability lawsuits (mainly in the US) related to the use of GLP-1-based medicines (Victoza, Ozempic, Wegovy, Rybelsus) causing various gastrointestinal and other injuries.
• A class-action lawsuit was filed against NNI, its Board of Directors, and Retirement Committee alleging claims for breach of fiduciary duty in connection with the management of the NNI Retirement Plan.
• A class-action lawsuit was filed against Novo Nordisk A/S, former CEO Lars Fruergaard Jrgensen, and EVP Martin Holst Lange regarding REDEFINE-1 study allegations, claiming misleading information about dosages and expected weight loss.
• A class-action lawsuit was filed against Novo Nordisk A/S, former CEO Lars Fruergaard Jrgensen, CEO Maziar Mike Doustdar, CFO Karsten Munk Knudsen, and EVP Dave S. Moore, alleging misleading investors about capitalizing on the compounded market for GLP-1 medicines and overstating market penetration ability.
• The company is engaged in certain litigation proceedings and various ongoing audits and investigations, which Management does not expect to have a material effect on financial position, operating profit, or cash flow.

Related Party Transactions

• Novo Nordisk A/S is controlled by Novo Holdings A/S, which owns 28.1% of the share capital and 77.3% of total votes, making it a related party.
• The ultimate parent of the Group is the Novo Nordisk Foundation, also a related party.
• Novonesis Group, Catalent Group, Altasciences Group, Single Use Support Group, Ellab Group, Sonion A/S, and NNIT A/S are considered related parties due to shared controlling shareholder (Novo Holdings A/S) or associated company status.
• In 2024, Novo Nordisk acquired three fill-finish sites from Novo Holdings A/S for USD 11.7 billion, mainly debt-financed. A closing mechanism adjustment was made in 2025, with potential future adjustments still to be confirmed.
• In 2025, Novo Nordisk A/S did not acquire B shares from Novo Holdings A/S as part of the DKK 20,000 million share repurchase programme.
• Services provided by Catalent Group to Novo Nordisk amounted to DKK 743 million in 2025.
• Services provided by Novonesis Group to Novo Nordisk amounted to DKK 280 million in 2025, and assets purchased from Novonesis amounted to DKK 125 million.
• Services provided by Altasciences Group to Novo Nordisk amounted to DKK 103 million in 2025.
• Services provided by NNIT Group to Novo Nordisk amounted to DKK 237 million in 2025.
• Dividend payment to Novo Holdings A/S was DKK 14,591 million in 2025.
• Novo Nordisk A/S and Novonesis entered into a joint liability agreement with a local utilities provider for a shared project in 2025, with Novo Nordisk A/S guaranteeing Novonesis' obligations.
• All agreements relating to assets and services with related parties are based on list prices or market prices and are renegotiated regularly.

Stakeholder Impact

• **Shareholders:** Impacted by the 48% decrease in share price in 2025, the projected sales and operating profit decline for 2026, and the DKK 8 billion restructuring costs. However, they benefit from the DKK 51,975 million total dividend for 2025 and the new DKK 15 billion share repurchase program for 2026. The company's long-term strategy in obesity and diabetes, and pipeline advancements, aim for sustained value creation.
• **Employees:** Approximately 9,000 employees were impacted by the global workforce reduction in 2025 as part of a company-wide transformation. Remaining employees are subject to new organizational structures and a renewed focus on core therapeutic areas. The company emphasizes fair working conditions, health and safety, and equal opportunities, with a new Global Diversity, Equity, Inclusion and Belonging strategy launched.
• **Patients:** Benefit from continued growth in obesity and diabetes care products, including the launch of the Wegovy pill and expanded indications for Ozempic. The company's commitment to expanding access and affordability, particularly in the US through Medicare Part D and Medicaid, aims to reach more patients. Efforts to combat illicit trade protect patient safety. However, periodic supply constraints for certain products (e.g., Ozempic) can impact patient access.
• **Customers (Wholesalers, PBMs, Managed Care):** Face continued pressure on product pricing due to negotiations and policies like the Inflation Reduction Act. The 'Most Favoured Nations' agreement and increased competition will lead to lower realised prices. The company is strengthening direct-to-consumer pathways and telehealth partnerships, potentially altering traditional distribution channels.
• **Suppliers:** Impacted by the company's 'Responsible Sourcing Standards' and 'Suppliers for Zero' program, requiring commitments to renewable electricity and sustainable practices. The company is investing heavily in expanding manufacturing capacity, which could lead to increased demand for certain suppliers but also requires adherence to new construction safety standards and low-carbon materials.
• **Creditors:** Benefit from the company's strong credit rating (AA/Aa3) and its ability to issue Eurobonds (EUR 10 billion in 2025) to finance acquisitions and operations. The company's financial resources are believed to be sufficient to meet requirements for at least the next 12 months.
• **Regulatory Authorities:** Engage with Novo Nordisk on product approvals, pricing, and compliance. The company faces ongoing legal challenges related to the 340B Drug Pricing Program and product liability lawsuits, requiring continuous adherence to regulations and ethical standards. The FDA's OAI status and warning letter for an acquired site highlight regulatory scrutiny.

Next Steps

• Final court approval of the Catalent class action settlement is anticipated in mid-2026.
• Further reviews and additional approvals for Awiqli are expected in 2026.
• Phase 3 development for zenagamtide (amycretin) for weight management is underway in Q1 2026.
• Updated learning and development portfolio will be launched in Q1 2026.
• Finalisation of the agreement with the US Administration to lower semaglutide prices across Medicare Part D, Medicaid, and direct-to-patient channels, with implementation expected to begin around mid-2026 for Medicare Part D obesity coverage.
• Continued roll-out of Wegovy in more markets during 2026.
• Introduction of the 7.2 mg dose of Wegovy in a number of countries in 2026.
• Finalisation of specific roadmap for converting to renewable heat and steam across production sites in 2026.
• Continued configurations and implementation of the supplier due diligence tool in 2026.
• Follow-up on in-progress inspections will continue in 2026.
• The Board of Directors intends to increase the number of independent Board members to at least four at the Annual General Meeting in March 2026.
• New Strategic Aspirations will be introduced as part of Capital Markets Day on September 21, 2026.
• A new share repurchase programme of up to DKK 15 billion will be implemented for the 12 months beginning 2026.
• The company expects to distribute an interim dividend in August 2026, with further information announced with the financial report for the first six months of 2026.
• An appeal in a 340B drug distribution policy case is still pending before the US Court of Appeals for the Seventh Circuit.
• Relator and WAG have filed an appeal to the US Court of Appeals for the Ninth Circuit regarding the NovoSeven qui tam lawsuit.

Key Dates

Recommendation

Novo Nordisk presents a complex investment case. While its core GLP-1 products, Wegovy and Ozempic, continue to drive significant sales and pipeline advancements are promising (e.g., Wegovy pill, Akero acquisition), the company faces substantial near-term headwinds. The projected sales and operating profit decline for 2026, driven by increased competition, pricing pressures from the US government, and patent expirations in some international markets, indicates a challenging period ahead. The 48% share price drop in 2025 reflects these concerns. However, the company's proactive strategic transformation, significant investments in manufacturing capacity, and commitment to R&D for next-generation therapies provide a strong long-term growth narrative. The DKK 8 billion in annualised savings from restructuring and the DKK 15 billion share repurchase program for 2026 offer some financial stability and shareholder return. Given the mixed outlook with strong long-term potential but significant short-term challenges and competitive pressures, a 'hold' recommendation is appropriate for investors to monitor the execution of the transformation and the impact of new product launches and market access strategies.

Keywords

Novo Nordisk, SEC Filing, 20-F, Pharmaceuticals, Obesity, Diabetes, GLP-1, Semaglutide, Wegovy, Ozempic, Rybelsus, Rare Disease, Biotechnology, Financial Results, Annual Report, Drug Development, Market Share, Capital Expenditure, Acquisition, Akero Therapeutics, MASH, Patent Expiry, Supply Chain, Workforce Reduction, Corporate Governance, Sustainability, ESG, FDA Approval, Clinical Trials