Novo Nordisk Guides -13% Revenue Decline: Our Committee Downgraded to FRAGILE
Management guidance for -5% to -13% revenue decline in 2026 reverses from +10% growth in 2025. Stock down 13% in first hour. Our multi-model committee downgrades REVENUE_DURABILITY from CONDITIONAL to FRAGILE.
This is an update to our full NVO analysis and our previous Novo Nordisk GLP-1 Transition analysis
Disclosure: As of 2026-02-10, the Runchey Research Model Trading Fund holds a long position in NVO. View our full Editorial Integrity & Disclosure Policy.
20-F Annual Report Review (Feb 19, 2026)
We have reviewed the full FY2025 20-F filing. All three signals confirmed — no changes. Key new data points: gross margin compressed 369 bps (81.0%), Ozempic decelerated to +5.6% growth, DKK 130.6B in manufacturing assets under construction (+53%), buybacks effectively halted (DKK 1.4B vs 20.2B), USD 4.2B one-time 340B revenue recognition in Q1 2026, and two new securities class actions filed. See the updated analysis for full details and four new monitoring triggers.
The Numbers That Matter
vs +10% in 2025
First hour of trading
At CER (already declining)
Global GLP-1 value share
What Happened
Novo Nordisk released its FY2025 financial report today (Feb 3, 2026), one day ahead of the scheduled earnings call. The report contains a material negative surprise:
Revenue Guidance Reversed from Growth to Decline
2026 guidance: -5% to -13% adjusted sales growth at CER. This is a dramatic reversal from +10% growth achieved in 2025.
Management: "Adjusted sales growth for 2026, which excludes revenue from the reversal of 340B provisions, is expected to be -5 to -13% at CER."
MFN Agreement Creates Structural Pricing Ceiling
The "Most Favoured Nations" agreement with the US Administration is the primary driver of the revenue decline. This affects:
- Medicare Part D pricing (pilot program mid-2026)
- Medicaid price cuts
- Direct-to-patient self-pay channel ($199/month Wegovy offers)
Q4 2025 Results Already Show Contraction
This is not a forecast — contraction is already happening:
- Total sales: -8% YoY
- US Operations: -7% at CER
- Wegovy: -4% Q4 (vs +41% full-year) — severe deceleration
- Operating profit: -14% YoY
How Our Signals Changed
We ran targeted updates on the Gravy Gauge lens. Here's what changed — and what didn't.
Management guidance for -5% to -13% revenue decline is a categorical change from 'at risk' to 'actively contracting.' MFN agreement creates structural pricing ceiling.
MFN agreement and compounding are materializing AS EXPECTED. Not worse than anticipated. Rating unchanged.
Market share loss 9.3pp (slightly worse than 9pp estimate). Competition continuing as predicted. Rating unchanged.
Why We Downgraded Revenue Durability
Our Feb 2 analysis rated REVENUE_DURABILITY as CONDITIONAL — revenue was real but dependent on navigating the 2026-2027 transition period. The key monitoring trigger was "Q4 2025 Earnings: Bear case = further guidance cuts."
The bear case has materialized. Revenue is now explicitly guided to decline, not just slow. This moves from "at risk of slowing" to "actively contracting."
What drove the change:
-5% to -13% decline (was +10% growth)
Now the primary driver of decline, larger impact than previously modeled
US -7%, Wegovy -4% — not forecast, reality
9.3pp actual vs 9pp estimated
Semaglutide molecule expiring in certain international markets, not previously quantified
What Remained Unchanged
REGULATORY_EXPOSURE: ELEVATED
Regulatory is materializing as expected, not worse. MFN agreement was anticipated. Compounding continues. IRA timing unchanged. No surprise beyond our prior assessment.
COMPETITIVE_POSITION: CONTESTED
Market share erosion continuing but not catastrophically accelerating. Lilly competition intensifying as expected. Novo retains manufacturing scale. Pipeline still in development.
Updated Investment Thesis
From Value Rotation to Restructuring Story
Previous assessment: NVO was a "value rotation candidate" — a former growth stock transitioning to mature-stage competitive dynamics.
Updated assessment: NVO is now a "restructuring story." The distinction: value rotation assumes growth continues at lower rate; restructuring acknowledges revenue is contracting while the company rebuilds competitive position.
Bull Case Now Requires
- 1. Revenue decline at shallow end (-5%)
- 2. Wegovy pill creates growth vector
- 3. CagriSema delivers >20% weight loss
- 4. Lilly stumbles or delays
Bear Case Scenarios
- 1. Revenue decline at deep end (-13%)
- 2. Wegovy pill cannibalizes injectables
- 3. CagriSema disappoints (<16%)
- 4. MFN implementation worse than guided
Updated Monitoring Triggers
Bear case materialized. Signal downgraded CONDITIONAL → FRAGILE.
Decline >10%: Maintain FRAGILE. Decline <5%: Consider upgrade to CONDITIONAL.
>100K weekly Rx = partial offset. <30K = cannibalization concern.
>20% weight loss = pipeline thesis intact. <16% = competitive concern amplified.
Actual price cuts vs guidance assumptions determine upside/downside to guidance.
Full Analysis Available
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