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Novo Nordisk stocks plunged by 7% in premarket trading following an announcement by the company that it has lowered its full-year 2025 financial expectations. The Danish pharmaceutical company now anticipates that its sales will grow 8%-14%, which has been reduced from the former estimate of 13%-21%. The projection of operating profit was also reduced to 10-16% compared to the previous projection of 16-24%.
The company explained the revision by commenting on the sluggish demand for its products, Wegovy and Ozempic, in the United States. The downgrade was also caused by the lower-than-expected market penetration of Wegovy in international regions as well. It is the second time this year that Novo Nordisk has had to revise its guidance to show that there are still problems in key segments.
By early Tuesday morning, the share went down to $55.11 premarket. This was a decline of 20.12% against the last trading price of $69.00. The stock had fallen earlier by 3.77% yesterday in trading hours on Monday, making the total loss in two days more than 23%.
This fast sell-off lost a lot of company capitalization in the market, and it was an indication of frustrations in the investment market towards the new forecast. Analysts have observed that investors seem to be responding to the earnings disappointment as well as to the increasing competition from Eli Lilly later in the obesity drug market.
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Novo Nordisk was also a major player in the booming market of drugs to treat obesity. However, recently, the situation implies that competitors have suffered a setback. The recent growth in Eli Lilly's presence in both diabetes and obesity care has cast doubt on investors regarding its new capabilities of retaining its market share.
Institutional investors might still sell, and since the current prices are below the technical levels of support, their shares might diminish. The stock's performance shows that the changed growth assumptions have prompted a wider re-evaluation of Novo Nordisk's long-term potential. Investors will now follow upcoming quarterly reports to understand whether the company will be able to stabilize results and win back the shareholders' acceptance.
