Novo Nordisk (NASDAQ Copenhagen: NOVO-B) inflicted much pain—and much-needed pain—on the company when president and CEO Maziar (Mike) Doustdar announced plans to lay off about 9,000 of its 78,400 employees, a spot check of analyst comments by StockWatch found this past week.
The Danish biotech shook the biopharma industry on Wednesday when it revealed a restructuring that will not only eliminate about 11.5% of its global workforce but also slice layers of management with the aim of strengthening commercial execution and shifting resources toward the company’s growth areas in diabetes and obesity.
Treating both through its glucagon-like peptide-1 (GLP-1) franchise of semaglutide catapulted Novo Nordisk to the top of GEN’s A-List of Top 25 Biotech Companies at the start of this year. The company markets semaglutide as Wegovy® to treat obesity and as Ozempic® to treat type 2 diabetes.
Ozempic generated DKK 64.5 billion (approximately $9.6 billion) in the first half of this year and DKK 120.342 billion ($18.905 billion) in 2024, enough to rank on GEN‘s most recent A-List of Top 10 Best-Selling Drugs. Wegovy racked up DKK 58.206 billion ($9.144 billion) in January–June 2025 and DKK 36.888 billion ($5.795 billion) last year.
Raft of challenges
But Novo Nordisk is facing a raft of challenges that have already cost the company about two-thirds of its market capitalization (the product of the share price and the number of outstanding shares). From an all-time high of DKK 4.121 trillion ($647.95 billion) on June 26, 2024, Novo Nordisk’s market cap has plunged to DKK 1.555 trillion ($244.473 billion) as of Friday.
Those challenges start with head-on competition from GLP-1 rival Eli Lilly (NYSE: LLY), which also markets GLP-1 drugs based on an identical active ingredient, tirzepatide, marketed for type 2 diabetes as Mounjaro® and for obesity/weight management as Zepbound®. Mounjaro generated $9.041 billion in H1 2025 (up 85% from a year ago), nearly all of the $11.54 billion racked up during all of 2024—also high enough to rank on GEN’s best-selling drugs A-List. Zepbound made $5.693 billion in this year’s first half and $4.926 billion in 2024.
Lilly also shook Novo Nordisk earlier this year when its obesity candidate orforglipron made history as the first oral GLP-1 drug to ace a Phase III trial when it reported positive results from ACHIEVE-1 (NCT05971940). Orforglipron, since then, has generated positive findings in two other Phase III studies—as well as projections of $10 billion to $25 billion in annual sales.
Lilly heads a growing number of competitors to Novo Nordisk in weight management and diabetes drugs. Amgen (NASDAQ: AMGN) is developing MariTide, a Phase III combination GLP-1 receptor agonist and gastric inhibitory polypeptide receptor (GIPR) antagonist delivered via injection and expected to report late-stage clinical results in 2027.
Also, Roche (SIX Swiss Exchange: ROG) bolstered its obesity drug development last year by completing its acquisition of Carmot Therapeutics for up to $3.1 billion, and this year, launching an up to $5.3 billion collaboration with Zealand Pharma (NASDAQ Copenhagen: ZEAL) to co-develop and co-commercialize Zealand’s petrelintide for overweight and obesity indications.
Novo Nordisk is also losing sales to compounding pharmacies, which market drugs with a similar active ingredient at a lower cost. And the company jolted investors in December and again in March by releasing lower-than-expected weight loss results for its next-generation obesity candidate CagriSema (cagrilintide), an amylin analog designed for once-weekly use, in the Phase III REDEFINE 1 (NCT05567796) and REDEFINE 2 (NCT05394519) trials.
REDEFINE 1 showed average weight loss of 22.7% in adults without diabetes, while REDEFINE 2 showed a 15.7% average weight loss vs. 3.1% for placebo in adults with type 2 diabetes—both after 68 weeks. Investors expected Novo Nordisk to deliver on its earlier forecasts that CagriSema would lead to a weight reduction of at least 25%.
Counter punch
“We believe this decisive action is necessary to start to right the ship with new CEO Mike Doustdar at the helm,” Evan David Seigerman, a managing director and senior research analyst with BMO Capital Markets, commented in a research note. “We believe efforts to focus on key growth drivers (GLP-1 business) and remove a layer of inefficiency are necessary to try to mount a counter punch to Lilly’s commercial outperformance of late.”
Seigerman reported that the brunt of the cuts will affect back-office and support positions. Citing a conversation with Novo Nordisk management, the analyst also reported that the company’s goal is now to eliminate “middle layers” of management that it concluded only added to complexity in the organization.
While Seigerman wrote that the layoffs were “a clear step in the right direction,” he added: “We need to see follow-through and ultimately results.”
Richard Vosser of J.P. Morgan Chase took a more cautious view in his research note on the Novo Nordisk restructuring: “While we are encouraged that Novo is taking action to reduce complexity and improve the agility of the business, the restructuring program is likely to lead to continued questions over the growth outlook for the business,” Vosser wrote, as reported by Bloomberg News.
Investors appear to share those questions. Since the layoffs were announced, Novo Nordisk shares on Nasdaq Copenhagen have yo-yoed over three trading days. After an initial 4% increase Wednesday, from DKK 338.70 ($53.24) to DKK 351.15 ($55.19), Novo shares dipped 1.5% Thursday to DKK 345.90 ($54.37) before barely rebounding 0.7%, to DKK 348.30 ($54.75).
“Tough, natural, and very necessary”
Ultimately, Novo Nordisk’s shares will benefit from the layoffs and restructuring, according to Nordnet analyst Per Hansen, who, according to Benzinga, described the drugmaker’s actions as “tough, natural, and very necessary.”
Hansen’s comments echo those of two analysts spotted by StockWatch, who defended Novo Nordisk. Oddo BHF analyst Charlotte Vaisse praised Doustdar as a CEO who is “proving proactive” in tackling Novo Nordisk’s numerous challenges, according to a research note cited by Bloomberg News, while Sydbank analyst Søren Løntoft Hansen told the Financial Times that the job cuts should suffice as Novo Nordisk evolves “from a hypergrowth company to slower growth. They are doing this to reduce complexity in the organization.”
In announcing its restructuring, Novo Nordisk also lowered its guidance to investors about its expected operating profit growth this year, to a range of 4% to 10% from 10–16% forecasted as late as last month. Novo Nordisk projected it will incur restructuring costs of around DKK 9 billion ($1.414 billion) in the third quarter but save around DKK 1 billion ($157.092 million) in Q4, and DKK 8 billion ($1.257 billion) by the end of 2026.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven,” Doustdar said in a statement. “Our company must evolve as well. This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritizing investment where it will have the most impact—behind our leading therapy areas.”
In addition to the statement contained in a formal press release, Doustdar sought to soften the rhetorical blow of the layoffs through a post on LinkedIn.
“Sometimes the hardest decisions are the right ones for the future we’re building,” Doustdar posted. “I’m confident that this is the right thing to do for the long-term success of Novo Nordisk.”
Leaders and laggards
- Maze Therapeutics (NASDAQ: MAZE) shares leaped 55% from $16.02 to $24.80 Thursday after the developer of small molecule precision medicines for kidney and metabolic diseases reported positive results from a first-in-human Phase I trial assessing MZE782, an oral small molecule targeting the solute transporter SLC6A19, in healthy volunteers. Maze said MZE782 showed dose-dependent urinary amino acid excretion across all single- and multiple-ascending dose cohorts, including up to a 42-fold increase in urinary phenylalanine (Phe) excretion. The company said it also saw a dose-dependent initial estimated glomerular filtration rate (eGFR) decrease similar to SGLT2 inhibitors, which, according to Maze, supported a potential kidney protective effect in chronic kidney disease (CKD). Maze plans to advance MZE782 into Phase II trials in both CKD and phenylketonuria (PKU) in 2026.
- Rapport Therapeutics (NASDAQ: RAPP) shares more than doubled, zooming 119% from $14.36 to $31.47 on September 8 after the developer of small molecule precision medicines for neurological or psychiatric disorders announced positive topline results from its Phase IIa RAP-219-FOS-201 trial (NCT06377930) assessing RAP-219 in patients with drug-resistant focal onset seizures. Rapport said RAP-219, a TARPγ8-specific AMPAR negative allosteric modulator, met the proof-of-concept, open-label trial’s primary endpoint by demonstrating a statistically significant reduction in long episodes compared with baseline over the eight-week treatment period. Rapport said it plans to advance RAP-219 into two Phase III pivotal trials in the third quarter of 2026. But after launching a $250 million public offering of common stock (9,615,385 shares at $26 per share), shares skidded 24.5% the rest of the week, closing Friday at $23.77.
- Seres Therapeutics (NASDAQ: MCRB) shares jumped 18% from $19.36 to $22.85 on September 8 after the Swiss financial news website Inside Paradeplatz reported that Nestlé Health Science offered to acquire Seres for about ~$760 million—$41 per share, all cash, plus milestone payments. The offer was valid through the end of August, according to Inside Paradeplatz, which based its report on a letter from Nestlé dated August 14. Nestlé paid Seres installment payments of $25 million in July and $50 million in January toward its purchase of Seres’ VOWST™, the first FDA-approved orally administered microbiome therapeutic. Seres has said the Nestlé payments will help it fund operations into the first quarter of 2026.
- Soleno Therapeutics (NASDAQ: SLNO) shares tumbled 24% over three days after the company disclosed that the death of a teenage patient using its Vykat™ XR (diazoxide choline) marketed oral extended-release tablets had been reported in the FDA’s Adverse Event Reporting System (FAERS). Vykat is indicated to treat hyperphagia in adults and children aged 4 years and older with Prader-Willi syndrome (PWS). “This patient was a 17-year-old male with a history of co-morbidities, including lymphedema, superficial thrombophlebitis (treated and followed by a vascular surgery team), and obesity (326 lbs.) who died from an apparent pulmonary embolus,” Soleno stated in a regulatory filing. “The treating physician has reported the case as not related to treatment with Vykat™ XR and Soleno’s assessment is the same.” Shares slipped 14.5% from $70.21 to $60.01 Wednesday, then slid further to $56.72 on Thursday and $53.60 on Friday.
