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Novo Nordisk CEO Mike Doustdar said the pharmaceutical giant is actively weighing acquisitions to close competitive gaps in the crowded weight-loss drug market, as the Danish drugmaker works to rebuild investor confidence after a bruising week.
“Let’s see where the gaps are, and let’s go out and see who has produced or is about to introduce better drugs than we are able to do on our own, and when that gap can be filled with M&A, we are actually quite interested about it,” Doustdar told CNBC‘s “Squawk Box Europe” on Tuesday.
Investors unimpressed by Monday’s turnaround plan
Doustdar’s comments followed a Capital Markets Day event on Monday, where Novo unveiled a turnaround strategy that failed to reassure markets ahead of Wegovy’s active ingredient losing key patent exclusivity in the early 2030s.
The stock fell nearly 8% Monday, its worst trading day since February, and was last seen trading roughly flat on Tuesday.
“I think yesterday we laid out a more clear strategy of the direction we want to take the company at. We talked about diversification of the company, but yet the reaction tells me that there’s still some work to do in convincing some of the investors,” Doustdar said.
Novo Nordisk’s US-listed shares were trading at $39.48, down $0.32, or 0.82%, as of 12:27 PM ET Tuesday.
Novo outlined plans to release more than five “multi-blockbuster” drugs by 2030, targeting over 150 billion Danish kroner, roughly $23 billion, in sales by 2035.
The company also guided for revenue growth in line with peers including Eli Lilly, AstraZeneca, Amgen, Biogen, Merck, AbbVie and Novartis, a target analysts said signaled slower progress than investors had hoped for.
Pills could reshape the market by 2030
Speaking separately to Reuters after the Capital Markets Day event, Doustdar said weight-loss pills could capture as much as half the global obesity drug market by 2030, as the industry shifts away from weekly injections.
Novo currently has five oral treatments in development, after beating Eli Lilly to market with the first obesity pill earlier this year.
“What happens if by 2030 the market is 50/50 (pills-to-injectables)?” Doustdar told Reuters, noting that rivals’ pipelines contain eight injectables for every two pills currently in development.
He said Novo is “preparing ourselves for all scenarios, including that one.”
If realized, that split would exceed Wall Street’s current forecasts, which project oral treatments will account for roughly 14% to 40% of an obesity drug market expected to reach $100 billion to $150 billion by 2030.
Oral therapies already account for about a third of US obesity prescriptions following the rollout of Novo’s Wegovy pill, with the company capturing more than 80% of new oral prescriptions, per Monday’s company presentations.
The pill generated nearly 5.5 billion Danish kroner, or $843 million, in first-half sales.
Doustdar told Reuters that oral Wegovy is protected from generic competition into the “mid and late 30s” through patents covering its delivery technology, directly addressing investor concerns about the looming patent cliff.
Lilly remains the company to beat
Novo’s key US rival, Eli Lilly, has captured a large share of the weight-loss market with its injectable GLP-1 drugs Mounjaro and Zepbound despite launching years later.
The stock performance gap between the two companies has been stark: Novo shares have declined 34% over the past year, while Lilly is up just over 54% over the same period.
Doustdar said Novo plans to expand beyond diabetes and obesity into adjacent areas including blood and endocrine disorders, liver disease and cardiovascular disease.
“It is the right time now that I feel comfortable about the core to speak about the diversification of the company in adjacent areas that are not new to us either,” he told CNBC.
“So it would be more obvious for me to imagine that we will be making more deals in areas outside of the core than in the core.”
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