Novo Nordisk has a lot on its plate — and it may not all be healthy. The pharmaceutical giant pulled out of its bidding war against rival Pfizer for clinical-stage biotech Metsera when the U.S. juggernaut matched its latest offer. Metsera accepted Pfizer’s $10 billion deal — significantly more than what Pfizer had initially offered in September — late last week. The sweetened terms follow an intense bidding war between Pfizer and Novo, the latter of which made a surprise bid for Metsera in late October. “We welcome NOVO’s decision to step back from the biotech acquisition, as continuing the bidding war risked overpayment, in our view, and demonstrates capital discipline despite NOVO’s relatively strong balance sheet vs. peers,” said Wan Nurhayati, equity analyst at CFRA Research. “That said, with competition intensifying, we still believe NOVO needs to further strengthen its late-stage pipeline,” he added. “NOVO still offers growth potential but that now comes with heightened risk as multiple guidance cuts and recent events have introduced more uncertainty,” the analyst added. It comes as Novo recently announced it would replace all its independent board directors after failing to come to a common understanding with the company’s controlling shareholder, Novo Nordisk Foundation, on the pace of change, as U.S. rival Eli Lilly secures more and more market share. New board members are expected to be formally elected on Nov. 14. Novo Nordisk shares have more than halved since its peak in mid-2024 as it is broadly seen by investors as falling behind Eli Lilly, the maker of rival treatments Zepbound and Mounjaro which have shown more pronounced results than Novo’s Wegovy and Ozempic. Novo lowered the upper range of its growth guidance last week alongside third-quarter earnings that missed expectations, citing competition and pricing pressures for its obesity and diabetes. “Rebuilding investor confidence will require consistent delivery and stronger execution, in our view,” Nurhayati said. Drug pricing is another pain point for pharma companies, including Novo. Novo and Eli Lilly each struck deals with the U.S. government to cut the prices of weight loss drugs. The move removed some uncertainty for investors as President Donald Trump has made lowering drug prices a key issue, making the space tricky to navigate for investors. “The deals represented a clearing event for investors. Our conversations quickly shifted to identify which pharma stocks should be added to underweight positions,” a Berenberg note said. “The obesity discussion remains dominant with Novo Nordisk front and centre of almost every meeting. We reiterate our Buy ratings on AbbVie, AstraZeneca, Novo Nordisk, Sanofi, UCB and Zealand,” it added. Amid pricing woes and increased competition, “Metsera offers some potential ways for Novo to differentiate its pipeline,” including monthly dosing and fewer side-effects, said Karen Andersen, director of healthcare equity research at Morningstar. Novo’s current treatments are injected weekly, and side-effects are typically gastrointernal. “Now that we have an agreement between the Trump Administration and Lilly and Novo on obesity drug pricing in direct-to-patient and government channels, I think this only highlights Novo’s need for more efficient manufacturing in order to maintain margins,” Andersen added. Novo’s medicines are largely so-called large molecules candidates, which are typically more complex and costlier to manufacture than small molecule treatments. Novo’s lack of a promising small molecule candidate puts arch-rival Lilly in a better position to maintain high gross margins even at low prices. Novo, however, has made early-stage licensing deals for small molecule drug candidates, Anderson said, and she expects to see more of these. “The most obvious small molecule acquisition target is Structure Therapeutics,” she added, though noting that the U.S. firm needs to resolve some tolerability. In terms of the deal announced with the Trump administration, “the quick summary is that it reads as a clear minor positive,” said Emmanuel Papadakis, who covers pharma at Deutsche Bank, but “with a sting in the tail” on Novo’s 2026’s growth expectations, though they were largely flattened in the firm’s third-quarter earnings. “Thus again, as has been the case for much of the YTD, we find ourselves having to weigh near-term challenges for Novo with the promise of mid-term opportunity,” Papadakis added.
