reports
- Dominic Rose
- Naresh Chouhan
Novo - Upgrade to HOLD (PT DKK300, 8pgs)
With the orfo’ data being on the lower side of expectations, we upgrade to Hold as the narrative is likely to be dominated by the potential upside for Novo. However, we remain convinced that: 1) The obesity market is nowhere near as big as the market believes, 2) Ozempic no’s are far too high & 3) Margin forecasts need to fall. Cons’ Ozempic forecasts will take time to fall & we will likely need the IRA price in November to force consensus lower. Therefore, we see limited S-T downside to our DKK...
- Dominic Rose
- Naresh Chouhan
Novo - Oversize Downgrade - PT Cut to DKK300 (SELL, TP DKK300 [350], 8...
Whilst our downgrade to Sell [here] was predicated on reduced Ozempic sales & significantly below cons. forecasts, the magnitude of the ’25 profit warning has led to a material reset of our forecasts & we are now >30% below cons. EBIT in 2029. We expect the debate to now focus on valuation given we model just 5% 25-30 CAGR sales growth & sema accounts for 60% of 2030 EBIT. Worryingly, our EPS declines in 2027 having cut our sales forecasts by 4-9% & EBIT forecasts by 6%-13%. We are now 27% below...
- Dominic Rose
- Naresh Chouhan
Novo - Mounjaro Efficacy Slowing GLP-1 Growth (SELL, TP DKK350, 11pgs)
With US GLP-1 volume growth in diabetes stalling to just 5%, we examine the evidence that Mounjaro’s high efficacy has resulted in a surge of patients getting to HbA1c goal & discontinuing treatment. We analyse the literature & clinical data that shows that GLP-1 market growth could slow dramatically for years to come given Mounjaro is now half the US GLP-1 volume in diabetics. We expect Mounjaro’s NBRx share to be >70% by end 2026, likely resulting in further downgrades to Ozempic consensus. Ba...
- Dominic Rose
- Naresh Chouhan
Novo - Ozempic Outlook Worsening (SELL, TP DKK350, 26pgs)
US Ozempic scrips have continued to deteriorate, resulting in further downgrades to our estimates. We are 9% below US Ozempic cons. in 2025, 24% below in 2026 & 56% below by 2030. Were consensus to fall to our forecasts, we show this would reduce EPS by 4% this year and 15% from 2027 (assuming minimal cost savings). NRx is now declining, yet cons. assumes 3% H225 sales growth despite an expected >MSD price cut. The mid-point of guidance is at risk in our view given the deterioration in Ozempic m...
- Dominic Rose
- Naresh Chouhan
Novo - Negative Mix A Major Concern (SELL, TP DKK350, 15pgs)
We have rebuilt our Wegovy & Ozempic models for volume, price & mix to account for the divergent dynamics by channel. We show that 1) Ozempic volume forecasts remain too high and NRx has now turned negative, 2) Mix is set to worsen dramatically for Ozempic such that 2027 group EPS growth is 0% on our numbers, 3) The Wegovy inflection implied in our forecasts is likely best case scenario w.r.t compounding & CVS, yet we are at the low end of guidance. We are modestly below cons. sales in 2025&26 w...
- Dominic Rose
- Naresh Chouhan
MFN Drug Pricing - Impact and Implementation (Thematic, 5pgs)
Ahead of today’s signing of an Executive Order to introduce a Most Favoured Nation approach to drug pricing in the US, we show that net pricing in the EU is c.50% lower than in the US & which companies have most to lose from MFN. We also show that, in reality,
- Dominic Rose
- Naresh Chouhan
Novo - Worrying Times (SELL, TP DKK350 [460], 13pgs)
Following the orfo’ P3 data, latest Wegovy scrips & rapidly faltering Ozempic growth, we conduct a wholesale review of our obesity market model, Wegovy & Ozempic scrip models & our Novo financial model. The outcome of this analysis is that we downgrade our 2030 sales by 20% and EPS by 24%. We now assume Novo only achieve a 25% obesity market share by 2030. We are 19% below consensus sales & 23% below EPS in 2030. We also provide a detailed hypothesis as to why US obesity demand growth is so lack...
- Dominic Rose
- Naresh Chouhan
US Tariffs - Broad Tariffs are Highly Unlikely (7pgs)
Following a number of recent events, we discuss in this note what we think is the most likely outcome for the Pharma industry. We show that broad based tariffs on drugs are highly unlikely, that even if it were to happen, the impact of a 20% tariff is
- Dominic Rose
- Naresh Chouhan
US Tariffs - Transfer Pricing Could Negate Impact (6pgs)
We show that Big Pharma would not have to shift a single element of supply chain to the US and can mitigate most, if not all, of a 20% tariff on drugs, just by changing their transfer pricing strategy. In a scenario where the US corporation tax rate falls to 15% but tariffs are 20%, we show that Big Pharma profits would be unchanged, while the US government tax take would more than double. The losers would be low tax jurisdictions like Ireland, but they would get to keep their manufacturing base...
- Dominic Rose
- Naresh Chouhan
Novo Nordisk - Cut to Sell - The Wood for The Trees (TP DKK 460)
Whilst the Wegovy scrips are scrutinised on literally a daily basis, US Ozempic softness seems to have been ignored despite Ozempic being 2x bigger than Wegovy in terms of global sales. New analysis makes us more concerned about Ozempic 2025 sales, than Wegovy. We are now 8% below the mid-point of 2025 guidance on sales & EBIT. We are 40% below consensus by 2030 on Ozempic sales, which could translate to a 16% cut to cons. group EBIT in 2030. We cut our group sales forecasts by 6-10% and EBIT by...
- Dominic Rose
- Naresh Chouhan
EU Pharma - 5 Reasons for Further Re-rating (Thematic, 42pgs)
Given the macro backdrop & our evidence in this note that Pharma can sustain faster than expected growth for the next decade, we believe investors should add to their Pharma positions. 2025 is the biggest year for pipeline readouts in recent history and we expect this to catalyse a re-rating. We show that 1) Pipelines are very robust, 2) The market underestimates the size of the “monster” blockbusters that account for 14% of all drugs, 3) 15% of 2030 sales are “generic resistant” due to the moda...
- Dominic Rose
- Naresh Chouhan
Novo - Cagri Data Makes Sense (BUY, TP DKK880, 11pgs)
We have conducted a deep-dive on the available literature & the CagriSema data and show that the inverse dose response is exactly what we would expect to happen and is what was seen in previous Novo studies. In fact, if we were to see the same cut of the data in REDEFINE4, we would fully expect tirzepatide to show the same thing. There is sufficient data (both clinical & in animal models) that shows that there is nothing untoward in the CagriSema data. Crucially, as we learn more about the biolo...
- Dominic Rose
- Naresh Chouhan
Novo Nordisk - Amycretin Data to Drive Re-Rating (BUY, TP DKK 880 [800...
After the disappointing CagriSema data, Novo shares de-rated in large part due to growing concerns about the sema patent expiry & ability to sustain growth beyond 2031. Whilst we did not share these concerns & are not worried about declines post the sema LOE for a multitude of reasons, we are aware that we are in the minority. However, with the amycretin data showing best-in class weight loss, Novo’s ability to compete with LLY, switch patients from Wegovy & deliver growth beyond 2031 is now muc...
- Dominic Rose
- Naresh Chouhan
Novo - Finding the Floor (BUY, TP DKK800 [1150], 11pgs)
The Novo Obesity bubble has well and truly burst, with every investor we spoke to asking about the worst case obesity scenario & what that means in terms of valuation. Despite Cagrisema having shown the best weight loss profile to date, we now assume the worst case estimates for Novo’s obesity franchise, with Novo only taking ~25% mkt share & treating only 7m US patients in 2030. The 2030 EBIT d/grade if cons. falls to our Cagri estimate would be just 8%, but we are fully cognisant of where sent...
- Dominic Rose
- Naresh Chouhan
EU Pharma 2025 Outlook - The Correction Was Due, Tread Carefully
In the aftermath of the H224 Healthcare correction, we look forward to 2025 with a more focused stock specific approach We show sector fundamentals have remained robust despite the correction. We see 4 key themes for the Pharma sector in 2025; 1) 2025 is a very strong year for important pipeline readouts, 2) The volume impact of Medicare Part D reform will dominate the narrative in H125 & continue to be a tailwind into 2026, 3) Margin expansion should be robust at a sector level, 4) Biotech M&A...
- Dominic Rose
- Naresh Chouhan
Novo - 2025 Growth Sensitivities (BUY, TP DKK1150, 8pgs)
Following management commentary on sales growth in 2025, we have calculated the implied sensitivity to Wegovy supply & the potential impact on consensus group sales. We show that high-teens group sales growth implies 40% US Wegovy sales growth in 2025. This is below consensus. Given our previous analysis [here] on falling Wegovy prices but higher volumes, the CTLT deal is now the most important catalyst, in our view: even more important than the cagrisema readout, which we forecast accounts for ...
- Dominic Rose
- Naresh Chouhan
Novo Nordisk - CagriSema Valuation Sensitivities (BUY, TP DKK1150)
Whilst the potential P3 data outcomes are widely understood, we are increasingly being asked what the valuation impact would be under various scenarios as investors position themselves for the upcoming readout. We assess 4 potential scenarios ranging from worst case to best case and calculate the peak sales impact, the NPV impact and what might happen to Novo’s valuation & multiple under each scenario. Based on the outcome, we see a $24bn delta in CagriSema peak sales, a -6% to +14% NPV impact...
- Dominic Rose
- Naresh Chouhan
Obesity Thematic - A Deep-Dive into Amylin
In the coming days at Obesity Week, we will see multiple datasets from amylin assets that could help to further support our belief that amylin combinations could become a material MOA in the Obesity market. Ahead of the Cagrisema P3 readout, we dig deep into the potential for amylin and show: 1) It has a superior tolerability profile, 2) Could preserve lean muscle mass and 3) Could be neuroprotective. We analyse the majority of the clinical data available on these drugs & show that the full prom...
- Dominic Rose
- Naresh Chouhan
Novo - Collapsing Wegovy Prices is Bullish (BUY, TP DKK 1150, 16 pgs)
In this deep-dive, we show that despite our 2027 Wegovy price of just $200/mth in the US, we are ~20% above consensus on Wegovy & ~30% above cons. on Novo’s Obesity portfolio in 2030. We show why we expect pricing to collapse but that market fears on pricing are far too pessimistic. We believe Wegovy will become the US market leader by volume and benefit from step edits from 2027 onwards. We model Commercial & Medicare channels separately for both price & volume & also show compelling evidence t...
- Dominic Rose
- Naresh Chouhan
Novo - Sema Likely to Work in Alzheimer’s (BUY, TP DKK1150 [1100], 11 ...
New analysis of 6 studies shows strong & conclusive evidence that GLP-1 use reduces Alzheimer’s (AD) symptoms, in our view. Novo are trialling oral sema (14mg) in AD, which is due to read out in Sept ’25. Following our analysis, we now assume a 70% chance of success for this trial, which is obviously very high for an AD P3 trial. We show that peak sales could be $10bn even though we assume $150/mth in the US. Furthermore, due to complex manufacturing, those sales could be much more durable. If w...
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.