Morgan Stanley Downgrades Novo Nordisk Amid Concerns Over Semaglutide Patent Expiry
Morgan Stanley downgraded its rating for Danish pharmaceutical giant Novo Nordisk (NVO) to Underweight from Equal-weight, citing concerns over the long-term impact of patent expiration on semaglutide. The molecule is central to blockbuster drugs Ozempic and Wegovy and accounts for a significant portion of the company's revenue. Analysts warned that while sales are expected to remain strong through 2031, the loss of exclusivity in 2031 could lead to substantial pricing pressure from generic alternatives. The downgrade came as Novo Nordisk shares traded below their 52-week high and despite recent efforts by the company to raise its full-year outlook. Morgan Stanley maintained a price target near $40, suggesting over 10% downside potential for investors. The firm also noted weaker U.S. prescription growth in Wegovy after an initially strong launch. The impact of this downgrade extends beyond individual investors as Novo Nordisk is one of Europe’s largest listed companies and holds significant weight in various index funds and ETFs.
