NVO Stock: Why Morgan Stanley Is Bearish On Novo Nordisk Despite Its Weight-Loss Drug Opportunity

• The firm cited “subdued” mid-term growth, a relatively demanding valuation, and a significant loss-of-exclusivity risk after 2030 for the downgrade.
• Morgan Stanley said Semaglutide, which accounts for roughly 75% of Novo’s sales in 2026, faces a ‘large patent cliff.’
• Semaglutide is the active ingredient behind Novo’s biggest products - Wegovy and Ozempic

Novo Nordisk (NVO) was in the spotlight on Friday after Morgan Stanley turned bearish on the drugmaker, warning that its heavy reliance on blockbuster drug Semaglutide could become a growing headwind as key patents begin to expire in the early 2030s.

NVO shares were down 1.6% at the time of writing and heading for their worst week since February.

Patent Expiry Challenges

Morgan Stanley downgraded Novo to ‘Underweight’ from ‘Equal Weight’ while keeping its $40 price target, a 7% downside from current levels. The firm cited “subdued” mid-term growth, a relatively demanding valuation and a significant loss-of-exclusivity risk after 2030.

The analyst said a central concern is that Semaglutide, which accounts for roughly 75% of Novo’s sales in 2026, faces a “large patent cliff.” Patent protection covering Semaglutide, which is the active ingredient for Novo’s blockbuster drugs Wegovy and Ozempic, expires in 2031 in Europe and 2032 in the U.S.

The semaglutide patent has already expired in some markets, including India and is set to expire in China as well, opening the door to cheaper competition.

Source: Novo Nordisk

Semaglutide: The Breakdown

Semaglutide is the active ingredient behind Novo’s biggest products. Ozempic is used to treat Type 2 diabetes, while Wegovy injection and Wegovy pill target obesity and long-term weight management.

The drugs remain Novo’s main growth engine. In the second quarter, Wegovy injectable generated DKK 19.48 billion ($3.02 billion) in adjusted sales, while Wegovy pill contributed another DKK 3.22 billion. Ozempic generated DKK 31.38 billion, while Ozempic pill added DKK 5.23 billion.

Novo Vs Lilly: Competition Intensifies

Novo is also fighting a growing challenge from Eli Lilly (LLY), whose Tirzepatide is sold as Mounjaro for diabetes and Zepbound for obesity in the U.S.

Lilly reported second-quarter Mounjaro sales of $9.94 billion, up 91%, while Zepbound sales jumped 46% to $4.93 billion.

Novo was first to establish a major position in the modern obesity-drug market with Wegovy, but has since lost ground to Zepbound. Novo is betting that new versions of Wegovy, including its recently launched pill, can help it compete as the global obesity-drug market reportedly heads toward an estimated $100 billion-plus opportunity by 2030.

Retail Sees Further Loss

Retail sentiment surrounding NVO on Stocktwits turned ‘neutral’ from ‘bearish,’ amid ‘high’ message volumes.

One user said that with constant downgrades and “not so great technicals”, the stock is “very likely to retest mid 30s.”

The stock has already shed 16% so far in 2026, compared to Lilly’s 4% gains.

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