Novo's Ozempic Sees First China Sales Drop, Amplifying Global Competitive Risks

What happened

Novo Nordisk reported that Ozempic sales in the greater China region fell for the first time last year, directly citing competition from rivals. This decline occurs as the company has already lost U.S. prescription leadership for both Ozempic and Wegovy in 2025, signaling broader market-share erosion. Management's recent 2026 guidance of -5% to -13% sales and profit growth at constant exchange rates explicitly points to lower realized prices and intensified competition as primary drivers. The China setback illustrates that competitive pressures are not confined to the U.S. but are spreading to key international markets, undermining growth assumptions. Importantly, this news comes amid a $4.2 billion 340B revenue reversal that may obscure underlying weakness in upcoming reports.

Implication

This sales drop in China, a significant market, confirms that Novo's share loss is pervasive, extending beyond the U.S. where Eli Lilly has gained dominance. It reinforces the bear case in the DeepValue report, where structural pricing pressure and higher commercial spend per script threaten margins. With free cash flow negative and capex commitments high, investors should prioritize monitoring net-price stabilization and oral Wegovy adoption mix in the next 3-6 months. The $4.2 billion 340B reversal in 2026 will distort headlines, so focus on underlying ex-reversal performance to avoid misleading optimism. Ultimately, this news tightens the timeline for management to prove its defense strategies work before deeper value erosion.

Thesis delta

This development does not shift the core thesis but intensifies its urgency by confirming competitive risks are global, not isolated. It underscores that Novo's guidance reset to negative growth is driven by tangible market-share losses, making net-price stabilization and oral Wegovy quality even more critical checkpoints by 2Q26. Failure to show progress could accelerate downside toward the bear scenario of $35 implied value.