Novo Nordisk projects weaker sales as it battles copycat drugs

Novo Nordisk shares plunged over 20% on Tuesday after the company named a new CEO and lowered its profit expectations, citing weaker sales of its popular weight-loss drug Wegovy due to competition from copycat drugs.

In a statement on Tuesday, Novo Nordisk said it expects its sales for 2025 to grow 8%-14%, down from projections of 13%-21% in May. It also lowered its expectations for operating profit growth to 10%-16%, down from 16%-24% in May.

The updated outlook "reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition," the company said. Glucagon-like peptide-1 agonists (GLP-1s), a class of drugs used to manage diabetes, have upended the weight-loss industry.

The Danish pharmaceutical company also announced on Tuesday the appointment of Maziar Mike Doustdar as president and CEO. Doustdar, who has worked at Novo Nordisk for over 30 years, will take the helm starting on Aug. 7.

Doustdar will succeed Lars Fruergaard Jorgensen, who announced his departure as CEO of Novo Nordisk in May, following a steep decline in the company's share price, which has dropped nearly 37% since the start of this year.

Reached for comment, a Novo Nordisk spokesperson said they did not have anything additional to share before the company's earnings call, which is scheduled for Wednesday, Aug. 6.

While global sales of Wegovy are growing, sales of the weight-loss drug are expected to weaken in certain markets due to increased competition from compounded versions of the drug.

Compounded weight-loss drugs have the same active ingredients as Wegovy and other popular brands such as Ozempic, and are used as substitutes when the name-brand drugs aren't available. However, the Food and Drug Administration (FDA) in April said there is no longer a shortage of GLP-1s and ordered compounding pharmacies to stop selling their copycat versions of the popular weight-loss drugs.

Despite efforts to stymie them, however, compounded versions of the drugs continue to penetrate the market, giving consumers a cheaper option to name-brands like Wegovy, which can cost more than $1000 per package for those without insurance.

In June, Novo Nordisk ended its partnership with Hims & Hers Health over claims that the online drug retailer was selling fake versions of Wegovy, a move Novo Nordisk said "put patient safety at risk."

CBS News medical contributor Dr. Céline Gounder told CBS News last year that there is not a lot of oversight over the compounded drug market, and that there is a wide range when it comes to the quality and risk associated with each drug.

Novo Nordisk said it is pursuing multiple avenues to "protect patients from knockoff 'semaglutide' drugs" including litigation. Semaglutide is the active ingredient found in Wegovy and Ozempic.

"Novo Nordisk is deeply concerned that, without aggressive intervention by federal and state regulators and law enforcement, patients will continue to be exposed to the significant risks posed by knockoff 'semaglutide' drugs made with illicit or inauthentic foreign active pharmaceutical ingredients," the company said in its statement.

The Associated Press contributed to this report.