Novo Nordisk's lowered earnings guidance and CEO resignation represent a "double surprise," according to BMO Capital Markets analyst Evan David Seigerman.
In a note to clients, Seigerman, who maintained his "market perform" rating on the Danish drugmaker, cited "multiple headwinds" weighing on the company's performance.
The analyst highlighted lower growth expectations for Novo Nordisk's key products in the US market: the weight loss drug Wegovy and the diabetes drug Ozempic. Wegovy's penetration in international markets was also lower than expected.
"The decline in Wegovy sales expectations is primarily driven by the combined impact of continued/better-than-expected performance in the U.S. market and slower-than-expected market expansion in a competitive environment," Seigerman wrote, suggesting that Eli Lilly's tirzepatide may be responsible for the competitive pressure.
Ozempic's underperformance in the U.S. market was "exacerbated by competition," with the company's glucagon-like peptide-1 (incretin) portfolio facing more pressure than management initially anticipated.
Despite these challenges, Seigerman expressed a positive outlook on the company's leadership change, saying that "the global perspective of a non-Danish CEO could reinvigorate and refocus a struggling strategy."