Novo Nordisk’s Weight Loss Lesson

Furious competition in GLP-1 drugs rebuts the anti-pharma crowd

WSJ editorial. Excerpts:

"Novo Nordisk’s 33.8% stock plunge this past week" 

"slower sales growth for its Ozempic diabetes and Wegovy weight-loss treatments in the U.S. Its blockbuster GLP-1 drugs have been losing market share to Eli Lilly’s Mounjaro and Zepbound."

"Pharma critics claim manufacturers rake in monopoly profits, but the reality is that one-hit drug wonders can’t make a company successful in the long run. Pfizer’s Covid windfall from vaccines and Paxlovid has evaporated, and its shares are trading at their lowest price since 2012. Manufacturers usually face competition from generics or other branded drugs in a relatively short period of time.

That means they must use their profits to innovate and acquire startups to replenish their drug pipelines. Otherwise, they risk competitive decline. It’s no coincidence that Merck recently agreed to buy London-based Verona Pharma for $10 billion as a key patent on Merck’s blockbuster cancer drug Keytruda ends in 2028. Only the fittest survive."