Novo Nordisk's Earnings Call Confirms DeepValue Thesis on Pricing Pressure and Oral Wegovy Launch

What happened

Novo Nordisk's Q4 2025 earnings call highlighted continued GLP-1 franchise growth but underscored a challenging 2026 outlook shaped by pricing pressure and mix changes. Management emphasized the U.S. launch of the Wegovy pill as a strategic move to expand access and drive volume, yet this optimism masks deeper structural issues. The call aligns with the DeepValue report's findings of net price declines, prescription share losses to Eli Lilly, and gross margin erosion from 84.7% in 2024 to 81.0% in 2025. Guidance for 2026 projects -5% to -13% growth at constant exchange rates, directly attributing this to lower realized prices from U.S. policy impacts and competitive rebating. Despite the stock's 44% decline to $47.19, the investment thesis remains contingent on observable price stabilization and successful volume uptake from new formats by mid-2026.

Implication

The earnings call reinforces that Novo's near-term trajectory will be dictated by its ability to manage U.S. pricing headwinds while leveraging new product launches, with investors needing to watch for gross margin stability above 81% as a key signal. Oral Wegovy's success is critical but faces hurdles from competitive dynamics and policy-driven net price compression, requiring scrutiny of early adoption data and PBM formulary support. Failure to demonstrate price stabilization or share recovery could lead to further de-rating towards the bear case $38 valuation, emphasizing downside risks from ongoing rebate wars and Lilly's momentum. Conversely, evidence of resilient margins and volume growth from access expansions could support a move towards the base case $55 valuation, highlighting the asymmetric payoff if execution improves. Ultimately, the next 3-6 months will be pivotal, with management's updates on MFN impacts and competitive responses serving as early indicators for whether the stock can recover from its current discounted levels.

Thesis delta

The earnings call did not alter the core investment thesis; it merely confirmed the anticipated pricing pressure and volume challenges outlined in the DeepValue report, with the oral Wegovy launch serving as a known catalyst rather than a game-changer. Any shift is minimal, reinforcing the need for execution on price stabilization and access expansion as critical checkpoints, while highlighting that propaganda around growth must be tempered by the reality of structural headwinds. Therefore, the delta emphasizes increased vigilance on sequential financial metrics and competitive dynamics, rather than a fundamental reassessment of the company's prospects.