Pharma News: Investors Hit Back After Guidance Cut
Novo Nordisk is facing a sweeping shareholder backlash after one investor filed a class action accusing the Danish pharmaceutical giant of lowballing the true threat from cheaper personalized compounded versions of its blockbuster GLP-1 drugs Ozempic and Wegovy. The lawsuit claims the company issued “false and misleading statements” that significantly minimized competition and inflated projected revenue growth during a period of record demand and surging public interest in weight loss and metabolic drugs.
Investor lawsuit claims Novo Nordisk downplayed compounded drug competition while cutting sales forecasts.
Massive Market Reversal Sparks Sell-Off
The complaint landed just days after Novo unveiled a sharply reduced financial outlook for 2025 during a leadership transition, introducing a new CEO and stunning equity markets. Novo slashed its previously bullish annual sales forecast from 13% to 21% growth down to 8% to 14%, while also trimming the midpoint of projected operating profit gains from 20% to 13%. The announcement triggered a dramatic share slide of more than 22% in a single trading session, wiping billions from the company’s market value and fueling allegations that executives hid key competitive realities from shareholders.
Lawsuit Seeks Damages for Share Decline
Filed in U.S. District Court in New Jersey, the case is being brought by retail investor Eric Barta on behalf of all buyers of Novo securities between May 7 and July 28—the period when the company first issued and then abruptly cut its 2025 guidance. Barta argues he and others paid inflated prices for stock based on the belief that competition from compounders would collapse once an FDA enforcement grace period expired in May. Instead, compounders continued to flourish.
Novo Fires Back but Offers No Details
Novo Nordisk insists it has done nothing wrong, stating it is aware of the complaint and intends to vigorously defend itself. A spokesperson said the company disputes all allegations but declined to elaborate due to ongoing litigation.
Underestimated Rival Channels
Executives previously signaled that sales of semaglutide formulations—including the weight-loss brand Wegovy and Type 2 diabetes drug Ozempic—would accelerate once compounders stopped manufacturing. That did not happen. Novo now acknowledges that compounding operators continue to sell semaglutide by pitching “personalization” as a clinical justification, despite the company asserting these providers lack rigorous oversight. The competitive squeeze comes as Eli Lilly’s tirzepatide products Zepbound and Mounjaro soar. Lilly reported a 21% sequential increase to $2.31 billion for Zepbound and a 9% rise to $3.84 billion for Mounjaro in Q1, while Novo disclosed sequential declines of 13% for Wegovy and 3% for Ozempic earlier in the year.
Looking Ahead
Whether the lawsuit succeeds remains uncertain, but it underscores a pivotal moment in the meteoric rise of GLP-1 therapies. With demand exploding, competition accelera
ting, and regulatory scrutiny intensifying, Novo must prove to investors that it can defend market share and stabilize momentum. Many analysts now argue the company underestimated a more durable threat from low-cost alternatives and fast-moving rivals. As this
Pharma News report underscores, shareholder trust may hinge not only on future sales numbers but on transparent communication. Investors burned by the stock plunge will be watching financial results closely and tracking whether guidance stabilizes, competitive risks are reflected openly in forecasting, and whether compounded drug availability can finally be curbed. It is increasingly clear that success in this space requires more than blockbuster science—it demands accurate forecasting, market vigilance, and an honest appraisal of disruptive threats that could reshape the GLP-1 landscape for years.
References:
https://11th.com/cases/novonord-investor-suit
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