Novo Nordisk CEO Mike Doustdar said the Danish drugmaker is actively evaluating acquisitions to address competitive shortfalls in the weight-loss treatment market, as the company seeks to restore investor confidence following a sharp selloff.
In an interview with CNBC's "Squawk Box Europe" on Tuesday, Doustdar said the company is looking at where gaps exist and whether external candidates can fill them faster than internal development. "Let's see where the gaps are, and let's go out and see who has produced or is about to introduce better drugs than we are able to do on our own, and when that gap can be filled with M&A, we are actually quite interested about it," he said.
Investor skepticism follows capital markets day
The comments came a day after Novo's Capital Markets Day, where management presented a turnaround strategy that failed to win over the market ahead of key patent expirations for Wegovy's active ingredient in the early 2030s. Shares fell nearly 8% on Monday, the stock's worst session since February, and traded roughly flat on Tuesday. Novo's US-listed shares were at $39.48, down $0.32, or 0.82%, as of 12:27 PM ET Tuesday.
Doustdar acknowledged that the market's reaction indicated more work is needed. "I think yesterday we laid out a more clear strategy of the direction we want to take the company at. We talked about diversification of the company, but yet the reaction tells me that there's still some work to do in convincing some of the investors," he said.
Novo outlined plans to launch more than five "multi-blockbuster" drugs by 2030, targeting over 150 billion Danish kroner, roughly $23 billion, in sales by 2035. The company also guided for revenue growth in line with peers including Eli Lilly, AstraZeneca, Amgen, Biogen, Merck, AbbVie and Novartis, a target analysts said signaled slower progress than investors had hoped for.
Oral therapies could reshape obesity market
Speaking separately to Reuters after the Capital Markets Day event, Doustdar said weight-loss pills could capture as much as half the global obesity drug market by 2030 as the industry shifts away from weekly injections. Novo currently has five oral treatments in development, after beating Eli Lilly to market with the first obesity pill earlier this year.
"What happens if by 2030 the market is 50/50 (pills-to-injectables)?" Doustdar told Reuters, noting that rivals' pipelines contain eight injectables for every two pills currently in development. He said Novo is "preparing ourselves for all scenarios, including that one."
If realized, that split would exceed Wall Street's current forecasts, which project oral treatments will account for roughly 14% to 40% of an obesity drug market expected to reach $100 billion to $150 billion by 2030. Oral therapies already account for about a third of US obesity prescriptions following the rollout of Novo's Wegovy pill, with the company capturing more than 80% of new oral prescriptions, per Monday's company presentations. The pill generated nearly 5.5 billion Danish kroner, or $843 million, in first-half sales.
Doustdar told Reuters that oral Wegovy is protected from generic competition into the "mid and late 30s" through patents covering its delivery technology, directly addressing investor concerns about the looming patent cliff.
Lilly remains the benchmark to beat
Novo's key US rival, Eli Lilly, has captured a large share of the weight-loss market with its injectable GLP-1 drugs Mounjaro and Zepbound despite launching years later. The stock performance gap between the two companies has been stark: Novo shares have declined 34% over the past year, while Lilly is up just over 54% over the same period.
Doustdar said Novo plans to expand beyond diabetes and obesity into adjacent areas including blood and endocrine disorders, liver disease and cardiovascular disease. "It is the right time now that I feel comfortable about the core to speak about the diversification of the company in adjacent areas that are not new to us either," he told CNBC. "So it would be more obvious for me to imagine that we will be making more deals in areas outside of the core than in the core."
This article is for informational purposes only and does not constitute financial advice.
