Why Is Everyone Talking About Novo Nordisk?

Despite financial results mostly in line with expectations, one product fell short.

Novo Nordisk's most important business could make significant strides over the next two years.

Novo Nordisk (NYSE: NVO) is well-known for its strong position in the GLP-1 market. The company's brands in this area, including Wegovy and Ozempic, have practically become household names. However, that hasn't enabled the drugmaker to perform well over the past couple of years. Novo Nordisk has significantly lagged the broader equity market during this period. The company may not have bottomed out yet, either. Recent developments have sent the stock down 13% over the past week, as of writing, and perhaps more is to come. What's going on with Novo Nordisk?

Despite being a leader in the GLP-1 market , Novo Nordisk has lost some ground to its biggest competitor, Eli Lilly (NYSE: LLY) . The Denmark-based pharmaceutical leader has been trying to get back on track by developing newer products. But it recently hit more stormy seas following a clinical setback. Novo Nordisk's ziltivekimab, an investigational medicine being developed to reduce the risk of major adverse cardiovascular events in people with atherosclerotic cardiovascular disease, chronic kidney disease, and inflammation, failed to hit its primary endpoint in a phase 3 clinical trial.

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All hope isn't lost for ziltivekimab. It is still undergoing studies in other indications. However, things aren't looking too good for this investigational candidate that Novo Nordisk hoped would help diversify its lineup beyond its diabetes and weight-loss portfolios.

Novo Nordisk reported its second-quarter results on Aug. 4. The company's revenue and earnings were mostly in line with expectations, which weren't very high. Novo Nordisk's net sales grew by 2% year over year to 78.5 billion Danish kroner ($12.1 billion). Novo Nordisk's adjusted earnings per share came in at 6.18 DKK ($0.95), up 5% year over year. Novo Nordisk also slightly revised its fiscal year 2026 adjusted sales guidance upwards.

However, the market focused on sales of the company's oral GLP-1 for weight loss, the Wegovy pill. Why is this product important? The oral weight-loss segment is perhaps the one corner of the market where Novo Nordisk is outperforming Eli Lilly. Novo Nordisk launched oral Wegovy in January, and it has been a major hit. The hope is that it will continue to outpace Eli Lilly's Foundayo, which was approved in April. Alas, in the second quarter, Wegovy pill sales came in slightly short of expectations. That's one reason the company's shares fell on the heels of its earnings release.