Novo Nordisk (NVO +0.72%) stock had a Monday to forget, as news from a top rival dampened sentiment on the Danish pharmaceutical company. A price target cut from an analyst tracking the company only exacerbated the situation. By market close that day, Novo Nordisk's shares were down by 3.5%, in contrast to the generally buoyant S&P 500 (^GSPC +0.19%), which edged almost 1% higher.
A rival makes a move
That rival is none other than giant U.S. pharmaceutical company Eli Lilly. It announced that it will make the highest dosages of its Zepbound weight-loss drug available to any adult with a qualifying prescription via its website beginning in August.
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Zepbound, a direct competitor to Novo Nordisk's pioneering Wegovy, is already available on Lilly's website, albeit in lower doses.
With the addition of the two highest-dose versions, all dosages of the drug will be offered through the company's portal. With this, Eli Lilly has a fine chance of poaching more market share from the European company.
NYSE: NVO
Key Data Points
Price target cut
Meanwhile, well before the market open, J.P. Morgan prognosticator Richard Vosser cut his price target on the company. He now feels its Denmark-listed stock is worth 650 kroner ($101) these days, down significantly from his previous fair-value assessment of 1,000 kroner ($155). He maintained his overweight (i.e., buy) recommendation, however.
Neither of these developments is positive for Novo Nordisk. However, investors didn't react by panic-selling the stock; instead, it suffered only a minor sell-off. This is telling; Wegovy is still a hotly popular drug and should remain so, given the high levels of obesity in this country, and Americans' desire for a relatively easy fix for this.
