Wegovy maker warns of 'painful' price cuts as shares plunge

Shares in the Danish company which makes Ozempic and Wegovy plunged 18%, as its boss warned things would get worse before they improve following steep price cuts.

Novo Nordisk had reported it expected profits and sales to fall by as much as 13%, and on Wednesday chief executive Maziar Mike Doustdar called pricing pressures "unprecedented" and "painful".

Novo said the situation had been "amplified" by a deal the firm and its rival Eli Lilly made with US President Donald Trump to lower the cost of weight-loss drugs for Americans.

The company has faced turmoil in recent months, announcing thousands of job cuts amid warnings of increasing competition and the impact of patents expiring.

Doustdar, who was appointed chief executive last summer, said he hoped the price reduction in Wegovy would be "an investment for our future" and open up access to the drug to more people.

People should expect the company's share price "goes down before it comes back up," he told CNBC's "Early Edition Europe".

Weight-loss drugs like Novo Nordisk's Ozempic and Wegovy and Eli Lilly's Zepbound and Mounjaro have soared in popularity over the last few years, and competition between the firms has helped to drive down prices.

Patent expiry has also led to rise of many low-cost copycat weight-loss drugs, with warnings about the safety of some of them.

In the US, Trump has pushed to make weight-loss medication cheaper after he complained that the "fat drugs" were more expensive there than in other countries.

In November, he announced the "most favoured nation" agreement with Novo Nordisk and Eli Lilly.

He said at the time that users of government-run website TrumpRx would be able to get Wegovy and Zepbound from $350 (£255) per month on average and that this would to drop to $250 a month. He added that Medicare prices of Ozempic, Wegovy, Mounjaro and Zepbound will be $245.

Many GLP-1 drugs, which is technical name for the drugs used to treat diabetes and obesity, cost over $1,000 a month in the US without insurance or discounts.

Novo Nordisk said on Tuesday that "lower realised prices linked to investments in market access, amplified by the [most favoured nation] agreement with the US Administration to bring GLP-1s to more Americans at a lower cost is assumed" in its lower and sales profit guidance.

It added that "intensifying competition and negative impacts from the compound patent expiry [...] in certain markets" had also hit its sales and profit guidance.