Once regarded as the most valuable pharmaceutical company in Europe, Novo Nordisk is reportedly relinquishing its dominance in the obesity treatment market to Eli Lilly in the United States. The Wall Street Journal (WSJ) analyzed on the 28th (local time) that underestimating the demand for its flagship weight loss drug, Wegovy, was a critical reason for the decline in market share.
Novo Nordisk initially projected its production of Wegovy conservatively based on the low demand for its existing product, Saxenda. However, the prescriptions surpassed five years' worth of Saxenda in just five weeks after its launch, leading to a supply shortage that had to be addressed through extreme measures to control the influx of new patients. Taking advantage of this gap, competitor Eli Lilly rapidly expanded its market presence with Mounjaro and Zepbound.
According to market research firms, Zepbound from Eli Lilly has recently surpassed Wegovy in weekly prescriptions in the United States, and Eli Lilly also has a more effective new drug pipeline. Although Novo Nordisk attempted late expansions of its production facilities and revisions of its marketing strategy, it has been evaluated as lagging behind competitors in terms of response speed.
Amid a sharp decline in stock prices, internal leadership has also been shaken. This month, major shareholders abruptly dismissed CEO Lars Fruergaard Jørgensen and have begun the process of selecting a new CEO. Novo Nordisk has been trying to recover by designating Wegovy as a preferred drug through a recent contract with CVS, but it appears challenging to regain control.
Market experts pointed out to WSJ that "the problem with Novo Nordisk is not the product itself but the initial judgment errors and slow execution. Some analysts have noted that disappointing research and development results and the spread of generic drug markets are making future performance prospects even more uncertain."
Meanwhile, a spokesperson for Novo Nordisk stated, "We still maintain the number one global market share in the GLP-1 category, and the supply issues have largely been resolved." However, concerns are growing that unless the next CEO shifts to a more aggressive business strategy, it will be difficult to close the gap with Eli Lilly.