Oral Wegovy Expands Market but Fails to Alter Novo's Downward Sales Trajectory

What happened

Novo Nordisk launched oral Wegovy in Q1 2026 to broaden the weight loss market through improved convenience and accessibility. However, recent analysis indicates this expansion is insufficient to drive top-line growth in FY2026, as management guides for a 5% to 13% adjusted sales decline at constant exchange rates. The DeepValue report reveals persistent headwinds, including ongoing U.S. net price compression and disclosed GLP-1 market share losses to competitors like Eli Lilly, which overtook Novo in U.S. prescription leadership during 2025. Despite category volume growth, oral Wegovy's contribution is overshadowed by pricing pressure from rebates, payer consolidation, and increasing cash-channel mix. Thus, while the oral format may aid patient starts, it does not resolve the core issues of competitive displacement and revenue erosion threatening near-term performance.

Implication

The oral Wegovy launch risks exacerbating net price erosion by shifting more volume to lower-margin cash-pay channels, such as the $499/month NovoCare program. Without clear signs of U.S. realized price stabilization or reversal in GLP-1 share losses, Novo's defensive FY2026 guidance remains credible, limiting upside potential. Key near-term catalysts include monitoring oral Wegovy's distribution scale through channels like Amazon Pharmacy and normalizing Q1 2026 financials for the one-time $4.2B 340B accounting benefit to assess underlying trends. The 'WAIT' rating is reinforced, as any upgrade requires improved guidance or net price data within 1-2 quarters, which this news does not provide. In the bear case, continued share erosion and pricing pressure could validate the sales decline, leading to further stock downside.

Thesis delta

The news confirms oral Wegovy is expanding the weight loss market but aligns with the DeepValue report's base case that it won't reverse sales declines, given ongoing pricing and competitive challenges. No material shift in the investment thesis is warranted; instead, it highlights the need for patience until clearer evidence emerges on net price stabilization and oral launch execution. The 'WAIT' rating and monitoring of 90-day checkpoints remain appropriate.