“Have the huge sales numbers been factored into their valuations now and is it sort of a bubble? That’s a big debate.” The IBT doesn’t hold shares in Novo or Lilly. “A lot of people are talking about whether Lilly and Novo have run their course,” said Ailsa Craig, co-lead manager of the International Biotechnology Trust. Still - they’re cheaper than shares in Eli Lilly & Co., the maker of rival drugs Mounjaro and Zepbound, which trade at about 46 times projected earnings. Novo trades at about 30 times analysts’ estimated earnings for the next 12 months, more than double the valuations of European big pharma peers like Roche Holding AG and Sanofi. “We can’t make the valuation work at these levels.” The comments echo those of GAM Investments director Niall Gallagher, who cut his holdings of the stock amid the “hype” surrounding the class of drugs known as GLP-1 receptor agonists. “They’re an excellent R&D company and they’re very well managed,” but too much is priced in, said Nick Cameron, a portfolio manager at Antipodes Partners, which doesn’t own Novo. Among Novo’s challenges: rising competition, issues with producing enough of its blockbuster drugs, and a valuation that’s getting stretched. Analysts see just 9% upside on average in the next 12 months, while about one-third of respondents to Bloomberg’s recent Markets Live Pulse survey expect weight-loss stocks to become laggards next year. The rally made it Europe’s biggest company and pushed the Danish firm’s value past the size of its domestic economy.īut 2024 is a different ball game.

Shares of Novo, which makes the diabetes drug Ozempic and weight loss medicine Wegovy, have risen 42% this year, as investors latched on to the growth potential of a market that some analysts predict could reach $100 billion by 2030. (Bloomberg) - A frenzy around obesity drugs made Novo Nordisk A/S Europe’s biggest stock-market success story of 2023.

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