Novo Nordisk, the Danish pharmaceutical giant best known for its obesity and diabetes treatments, saw its shares edge 0.62% higher in London trading this week. The stock generated a trading volume worth nearly £410 million (around $510 million), making it the 181st most actively traded equity among European peers for the session. This modest but notable rebound comes against the backdrop of ongoing turbulence in the GLP-1 (glucagon-like peptide-1) market, where competition, regulatory scrutiny, and investor nerves have created sharp swings in recent months.
The latest rise follows a difficult stretch for Novo Nordisk. Earlier this year, the company’s shares tumbled by more than 20% after it cut its annual guidance, sparking a sell-off that also affected its main rival, Eli Lilly. Investors had become increasingly concerned that soaring demand for GLP-1 products such as Ozempic and Wegovy could not be matched by supply, while competition in the space was also intensifying.
While Monday’s 0.62% gain may appear modest, it highlights that confidence in Novo Nordisk has not evaporated entirely. Instead, investors are now weighing whether the company’s efficiency drive and pipeline of new treatments can restore momentum. New Chief Executive Mike Doustdar has wasted no time in pushing through tough financial measures. Since taking charge, he has slashed the company’s research and development (R&D) budget by 23.8%, introduced a hiring freeze, and pared back bonuses. These moves followed a £55 billion wipe-out in market value (around $70 billion) and a dramatic 42% decline in share price year-to-date..
The immediate results have been encouraging. In the first half of the year, Novo Nordisk posted an operating profit of £8.3 billion (approximately $10.6 billion), up 25% compared with the previous year. Yet these gains have come at the expense of innovation: at least eight R&D projects, including a highly anticipated oral version, have been shelved. For long-term investors, the concern is whether today’s cost savings will come at tomorrow’s cost in lost opportunities.
Despite trimming back parts of its research pipeline, Novo Nordisk is not standing still. The company is expanding into rare diseases, with drugs such as Mim8 and Alhemo in development for haemophilia patients. This shift demonstrates Novo’s desire to avoid over-reliance on GLP-1 medicines, which, although highly profitable, leave the firm exposed to competitive and regulatory shocks. In addition, Novo Nordisk achieved a breakthrough with Wegovy, which has now been approved by the Food and Drug Administration (FDA) for the treatment of MASH (metabolic dysfunction-associated steatohepatitis). The decision makes Wegovy the first GLP-1 therapy cleared for MASH, opening up a lucrative and underserved global market in liver disease treatments.
Analysts believe this approval could help offset some of the losses from cancelled projects and give the company a competitive edge against Eli Lilly in particular. In Britain, Novo Nordisk’s developments are being closely followed both by investors and by the NHS, which already prescribes semaglutide for diabetes and, in limited circumstances, for obesity treatment.
Access to obesity drugs on the NHS remains tightly restricted due to cost and eligibility criteria, but new approvals such as MASH could strengthen the case for wider use over time. For investors, the company’s performance serves as a barometer for the broader European healthcare sector. With more than half of Novo Nordisk’s market value tied to GLP-1 drugs, any shift in demand, supply chains, or regulatory policy can have significant knock-on effects across the region. Looking ahead, Novo Nordisk faces a delicate balancing act.
Cost-cutting has stabilised the business in the short term, but the decision to cancel multiple R&D projects may weaken its competitive position in the long run. Rivals are aggressively pursuing oral GLP-1 therapies, which could alter the dynamics of the obesity and diabetes market. At the same time, successes in rare diseases and MASH approval suggest that Novo is not simply retreating but rather attempting to reposition itself for more sustainable growth.
For investors, the current share rebound signals tentative confidence, though volatility in the sector is likely to persist. Novo Nordisk’s 0.62% gain on strong trading volume reflects a company navigating one of the most challenging yet opportunity-rich environments in modern pharmaceuticals. Its cost-cutting drive has delivered immediate profits, but innovation risks being curtailed.
With new approvals and rare-disease projects offering fresh avenues for growth, the company’s future will depend on whether it can strike the right balance between short-term stability and long-term innovation. For the market, where semaglutide already plays a role in NHS treatment and where obesity remains a public health priority, Novo Nordisk’s next moves will be watched with keen interest.
