(Bloomberg) -- Novo Nordisk A/S shares slipped again on Tuesday, briefly erasing what was left of this year’s lofty gains, as concerns around the impact of competition and supply constraints cool the excitement around the Danish firm’s obesity drugs.
The stock fell as much as 1.2% on Tuesday, down almost a third from a peak in June, before paring its losses to trade little changed on the day. It has wiped out about $210 billion in market capitalization in the past five months.
While the popularity of Novo’s diabetes and obesity treatments Ozempic and Wegovy sent the firm’s shares to record highs and transformed the company into Europe’s most valuable, rivalry in the lucrative field is becoming increasingly stiff, particularly from US competitor Eli Lilly & Co.
Equity analysts appear to be anticipating a rebound, however, with the average 12-month target price among analysts tracked by Bloomberg hovering near the highs.
Novo continues to struggle to meet a mammoth surge in demand for its drugs. Chief Financial Officer Karsten Munk Knudsen spooked investors in a recent earnings call when he said the company’s sales growth may fall short of analyst expectations in 2025.
Adding to investor nervousness is an upcoming data read-out of Novo’s next-generation weight loss drug, CagriSema, due in December.
Even with the reversal in its stock-market fortunes, the company is still the region’s biggest by a wide margin with a market capitalization of $448 billion, with luxury conglomerate LVMH in second place at $304 billion.
--With assistance from Naomi Kresge and Michael Msika.
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