U.S. copycat GLP-1s trigger sharp market correction

Novo Nordisk, the Danish pharmaceutical company behind Ozempic and Wegovy, lost more than €60 billion in market value in a single day. The company issued a profit warning tied to growing competition from compounded GLP-1 alternatives in the United States.

Its shares dropped over 20%, marking the largest single-day decline in its recent history. The sell-off reflects investor concerns about Novo Nordisk’s ability to maintain market share in the increasingly crowded weight-loss and diabetes drug sector.

What triggered the profit warning?

The warning stemmed from a surge in availability of non-branded semaglutide alternatives. U.S.-based compounding pharmacies have been supplying off-label GLP-1 products that mimic the effects of Novo Nordisk’s flagship drugs.

These compounded versions are often sold at significantly lower prices than Ozempic or Wegovy. Some clinics offer compounded semaglutide at less than $300/month, compared to Wegovy’s U.S. list price of $1,349/month.

Although these formulations are not approved by the FDA in the same way as commercially manufactured drugs, their presence in the market has grown rapidly. The FDA has issued warnings, but enforcement remains inconsistent.

Why are compounded GLP-1s a threat?

GLP-1 receptor agonists like semaglutide and tirzepatide have become highly sought after for their effectiveness in promoting weight loss and controlling blood sugar. As demand has soared, so has interest in cheaper alternatives.

In the U.S., shortages of FDA-approved products have opened the door to compounded versions. These alternatives are made by pharmacies under special provisions of U.S. law (Section 503A and 503B), often without the same clinical testing or manufacturing standards.

By mid-2024, it’s estimated that more than 100,000 U.S. patients per month are using compounded GLP-1 formulations. This growth has disrupted sales forecasts for major manufacturers.

Impact on Novo Nordisk’s business

Semaglutide accounted for over 55% of Novo Nordisk’s revenue growth in 2023. With Ozempic and Wegovy leading the company’s global expansion, any disruption to these revenue streams has an outsized effect.

The company previously forecast double-digit revenue growth for 2025. However, after adjusting for new market conditions, analysts now expect a mid-single-digit increase, according to Bloomberg.

Novo Nordisk has not yet announced price changes or legal action in response to compounded competition, but the company is under pressure to respond.

Investor reaction

• Share price fell over 20% in one day
• More than €60 billion wiped off market cap
• One of the steepest declines in the company’s history

The market reaction places Novo among the largest single-day losers in European stock market history.

What happens next?

Several challenges remain unresolved:

• Regulatory clarity: Will the FDA crack down on compounding pharmacies?
• Supply chain strategy: Can Novo increase production fast enough to eliminate shortages?
• Patent protection: Is there a legal path to block unapproved semaglutide analogs?

For now, Novo Nordisk has not offered specifics. Executives have only said they remain confident in the long-term outlook and product pipeline.

But investors are watching closely. The company’s future depends on how it handles this new wave of unofficial GLP-1 competitors.