Novo warns of risk from copycat drugs

Novo Nordisk cautioned on Wednesday that it expects continued competition this year from copycat versions of its Wegovy obesity drug, as it battled pressure from compounding pharmacies in the United States and rival Eli Lilly.

- JACOB GRONHOLT-PEDERSEN MAGGIE FICK

The Danish drugmaker, which became Europe's most valuable company worth $650 billion last year on sales of its blockbuster weight-loss drug, is facing a pivotal moment as Wegovy loses market share, especially in the US.

Last week, competition from compounders — who make copycat medicines based on the same ingredients as Wegovy — prompted the company to cut its full-year sales and profit outlook. That took investors by surprise and wiped $95 billion off Novo's market value.

On a media call on Wednesday, outgoing CEO Lars Fruergaard Jorgensen said the copycat market has "equal size to our business" and compounded versions of Wegovy were sold at a "much lower price point."

In May, the company said it expected many of the roughly one million US patients using compounded GLP-1 drugs to switch to branded treatments after a US Food and Drug Administration (FDA) ban on compounded copies of Wegovy took effect on May 22, and it expected compounding to wind down in the third quarter.