TLDR
- Novo Nordisk lowers 2025 operating profit outlook to 4-7% growth from 4-10% earlier estimate
- Workforce reduction of 9,000 employees includes 5,000 Danish positions in restructuring effort
- Third quarter operating profit drops 30% to DKK 23.7 billion versus DKK 24.6 billion forecast
- Wegovy sales grow 18% to DKK 20.4 billion but trail analyst projections by DKK 500 million
- Stock price tumbles 50% in 2025 as Eli Lilly rivalry and compounded drug alternatives gain traction
Novo Nordisk revealed plans Wednesday to cut 9,000 positions worldwide as the obesity drug manufacturer trimmed its annual profit expectations. The announcement marks a turning point for the Danish company as it battles intensifying market competition.
The pharmaceutical firm reduced its 2025 operating profit growth target to 4-7%. This compares to the prior forecast range of 4-10%.
Revenue growth expectations also fell to 8-11% from the previous 8-14% projection. CEO Mike Doustdar pointed to weaker performance in GLP-1 medications as the key factor.
The drug class includes blockbuster treatments Wegovy and Ozempic. Both products transformed Novo into Europe’s most valuable company in 2024 before sales momentum slowed.
Quarterly Financial Performance Falls Short
Third quarter operating profit decreased 30% to DKK 23.7 billion. Wall Street analysts anticipated DKK 24.6 billion for the period.
Revenue climbed 5% to DKK 75.0 billion Danish crowns. The figure lagged behind analyst estimates of DKK 76.2 billion.
Wegovy posted an 18% sales increase to DKK 20.4 billion. Analysts expected DKK 20.9 billion from the weight management medication.
Total sales measured in local currencies expanded 11%. This matched the 11.4% growth rate analysts predicted.
Ozempic revenue reached DKK 95.3 billion through the first nine months. Sales rose 10% in Danish kroner and 13% when adjusted for currency fluctuations.
NVO shares have lost half their value in 2025. Eli Lilly’s competing products and cheaper compounded alternatives have eroded Novo’s market dominance.
Compounded drugs replicate the same active ingredients found in brand-name medications. Novo cautioned that “unsafe and unlawful mass compounding has continued” in recent months.
Job Cuts and Restructuring Impact
The layoffs affect 5,000 workers in Denmark and 4,000 employees in international locations. One-time restructuring costs totaled DKK 8 billion in 2025.
Severance expenses consumed DKK 5 billion of the total. Production and research asset writedowns added DKK 4 billion.
The company projects DKK 1 billion in cost savings for the fourth quarter. Nine-month operating profit increased just 5% to DKK 95.9 billion when including restructuring charges.
Without special items, operating profit would have gained 15% in Danish kroner. Constant currency results showed 21% growth.
Operating margin compressed to 41.7% from 44.7% in the prior year. Gross margin slipped to 81.0% from 84.6% as manufacturing expenses increased.
Geographic and Product Mix Results
Obesity treatment sales surged 37% in Danish kroner and 41% at constant rates to DKK 59.9 billion. U.S. revenue advanced 12% in Danish kroner and 15% excluding currency effects.
International business grew 13% and 16% respectively. Regional breakdowns showed EUCAN up 18%, Asia-Pacific climbing 35%, and China gaining 8% at constant exchange rates.
Free cash flow contracted 11% to DKK 63.9 billion as capital spending jumped 34% to DKK 41.7 billion. Research and development investment rose 9% to DKK 37.4 billion.
The FDA granted Wegovy approval for metabolic dysfunction-associated steatohepatitis treatment. Novo also signed deals to acquire Akero Therapeutics and Omeros Corp.’s zaltenibart compound during the nine-month period.
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