The new version of the weight loss drug will hit the market next month.
The pill could reaccelerate Novo Nordisk’s top-line growth, potentially triggering a strong rally in the stock following its depressed valuation.
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Is there currently a more popular health trend than GLP-1 agonist obesity drugs like Ozempic? Probably not. However, ironically, investing in Ozempic, or rather its manufacturer, Nordisk(NYSE: NVO)It hasn’t gone very well this year.
Shares have fallen 40% in 2025. Competition from Eli LillyNovo Nordisk’s similar drug, Zepbound, and telehealth companies selling compounded versions of Ozempic pressured Novo Nordisk’s business to the point that the company fired its CEO earlier this year.
Investing in a cold stock like Novo Nordisk may seem a little scary, but things could be starting to heat up again for the pharmaceutical giant.
Image source: Novo Nordisk
Shares of Novo Nordisk rose on Tuesday following news that the Food and Drug Administration (FDA) had formally approved its application to sell a Wegovy pill in the United States. Wegovy is the same medication as Ozempic, generically called semaglutide, but while the latter is approved to treat type 2 diabetes, Wegovy is the brand intended to be prescribed for weight management.
The FDA’s decision is important for several reasons. First, the Wegovy pill will be the first oral GLP-1 drug on the market. In a phase 3 trial of the treatment, participants showed an average weight loss of 16.6% over 64 weeks, with one in three losing 20% or more. Second, most patients will probably prefer to take a daily pill rather than injections.
This new version of the drug will provide Novo Nordisk with a crucial tool to address the pressure it has faced from competitors. Eli Lilly is seeking FDA approval for its oral obesity drug and could get it in March, but Novo Nordisk won the race to market. Meanwhile, Wegovy could quickly gain traction, which would help Novo Nordisk even if it remains the only approved pill of its kind for a limited time.
The Wegovy pill will be available to patients in early January, and Novo Nordisk’s CEO has said the company has already built up enough supply to support an aggressive launch of the product. “This time we have more than enough pills,” he said.
Novo Nordisk’s business has clearly felt the impact of competition. Its revenue growth has been steadily slowing for more than a year. However, based on the headlines and share performance, it would be easy to believe that the business has collapsed, and that is simply false.
In fact, Novo Nordisk continues to grow, including double-digit percentage revenue growth in its most recent quarter. Its earnings per share have roughly doubled since the beginning of 2023.
NVO (quarterly year-over-year growth) revenue data from YCharts.
After the stock crash, Novo Nordisk looks like a compressed spring: it’s simply waiting to release its pent-up energy. The stock currently trades at a price-to-earnings ratio of just 13 times its expected 2025 earnings.
That’s arguably a bargain price even if its growth rate simply plateaus at a low double-digit percentage. However, the Wegovy pill seems likely to be a major catalyst that could accelerate the company’s top-line growth again by mid-2026.
If Novo Nordisk can grow its earnings at an annualized growth rate of 15% or more going forward, that would easily justify the market lifting its P/E ratio back above 20.
That means it could be a successful investment next year. A simple rebound in the stock’s valuation to 20 times earnings would equate to a share price gain of more than 50% from here, and that’s not taking into account potential double-digit earnings growth.
Additionally, at the current share price, the company’s dividend yields 3.3%, close to its highest yield on record. Add it all up, and Novo Nordisk has the makings of a market-beating investment in 2026. That’s not a guaranteed outcome, but the tailwinds it should experience are more than enough reasons to seriously consider adding the stock to your portfolio heading into the new year.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
Should you invest in Ozempic Maker Novo Nordisk in 2026? was originally published by The Motley Fool
