NVO Stock Drops 10% Over 3 Months: Should Investors Consider Selling?

Novo Nordisk (NVO) has experienced a significant stock decline of 10.2% over the past three months. This drop is attributed to a combination of regulatory challenges, a reduction in guidance for 2025, and declining demand for its major drugs, semaglutide-based Ozempic and Wegovy, particularly within the U.S. obesity market.

Regulatory Setbacks Impacting NVO Stock

The downturn in NVO’s stock price follows a July guidance cut. The company is facing pressure from illegal compounded semaglutide products and competition from Eli Lilly’s Mounjaro and Zepbound, which are also GLP-1 drugs aimed at diabetes and obesity.

Financial Performance and Market Share

Novo Nordisk’s third-quarter results were disappointing, with earnings and revenue falling short of expectations. Subsequently, the company further lowered its sales and operating profit outlook for 2025. As of September, NVO’s global diabetes market share dropped to 31.6% as Lilly made gains in this space.

Eli Lilly’s Rising Competition

• Eli Lilly reported strong third-quarter results, exceeding earnings and revenue forecasts.
• Mounjaro and Zepbound revenue more than doubled, generating $24.8 billion in the first nine months of 2025, comprising 54% of total sales.

Cost-Cutting Measures and New Agreements

Novo Nordisk has initiated a major restructuring plan aimed at cutting its global workforce by approximately 9,000 employees, targeting annualized savings of DKK 8 billion by 2026. Furthermore, the company has reached an agreement with the U.S. Administration, which will decrease the prices of Ozempic and Wegovy starting in 2026 to enhance patient accessibility.

Future Prospects and Development Pipeline

Despite recent challenges, Novo Nordisk is still a leader in the diabetes and obesity treatment market. Its successes stem from drugs like Ozempic and Wegovy, which generated DKK 152.5 billion in the first nine months of 2025. Both drugs showed growth of 9% and 23% year-over-year in their third-quarter sales respectively.

New Drug Developments

• Novo Nordisk is working on expanding semaglutide’s use in treating cardiovascular issues and pain from osteoarthritis.
• The company is also developing next-generation obesity treatments, including CagriSema and oral semaglutide.

Market Analysis and Investor Considerations

Year-to-date, NVO stocks have declined 43.9%, underperforming the industry and the S&P 500. The stock is currently priced at a forward P/E ratio of 13.10, which is below the industry average of 16.72.

Analysts have revised earnings estimates downward for both 2025 and 2026. With increased competition and pricing pressure looming, many experts advise investors to consider reducing their exposure to NVO.

Conclusion: Should Investors Sell NVO Stock?

Novo Nordisk is facing considerable challenges that could hinder its medium-term growth trajectory. The upcoming pricing reset and intensifying competition necessitate caution among investors. Until decisive actions are taken to stabilize market share and revitalize demand, selling NVO shares might be prudent.