Novo Nordisk: Priced for Stability, Ignoring the Strong Pipeline

Ole Søeberg of Nordic Investment Partners presented his investment thesis on Novo Nordisk (Denmark: NOVOB) at European Investing Summit 2025.

Thesis summary:

Ole analyzes the pharmaceutical industry as a potential “growth cluster,” driven by demographic tailwinds as an aging population increases healthcare spending. He notes that while this spending trend is unsustainable, it creates a large opportunity for drugs that promote a “good life” and reduce long-term costs. The presentation identifies GLP-1s as a key innovation in this area, with potential benefits far beyond their original diabetes and obesity applications, including cardiovascular, cancer suppression, and anti-depressant effects. This market is currently a “two-horse race” between Eli Lilly (LLY) and Novo Nordisk (NVO).

Novo Nordisk, a pioneer in the GLP-1 market with Ozempic and Wegovy, has “fallen out of bed” after its stock price declined 60% from its peak. The company lost its “pole position” to LLY after experiencing “short supply issues” just as LLY launched its Zepbound drug, which Ole notes is currently a “better drug” as an injectable. The market has since priced NVO for a low-growth future, essentially writing off its pipeline and viewing its potential upside, including MASH and Alzheimer’s treatments, as “birds on the roof.”

Ole highlights that this view may ignore NVO’s pipeline, which could “change the balance” in the race with LLY. NVO’s pill-based Cagrisema, with results expected late this year for a 2026 launch, appears “slightly better” than LLY’s offering based on comparative data. Furthermore, NVO’s Amycretin (due in 2029) “could also change the game.” The company is also undergoing a management reset, with a new CEO (Mads Dysted) and a new board focused on getting NVO “back on track.” Ole also views the hiring of a top sell-side analyst for IR as a positive step for improving the feedback loop to senior management.

The recent 60% stock price dive has compressed NVO’s valuation. The market appears to be pricing in a 2030 EPS of around 30 DKK, reflecting a “mature stable” business. However, if NVO’s growth forecasts are realized, EPS could be “much higher,” potentially 50+ DKK. Ole presents a scenario where, even on conservative 2028 EPS estimates of 28 DKK, a P/E multiple of 18x (below NVO’s long-term average of 22.5x) would imply a 500 DKK stock price in 2.5 years. With dividends, this suggests a potential 15% CAGR. While LLY has a higher growth profile, Ole notes NVO “looks more interesting” on recent valuation terms, recently yielding just under 4%.

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About the instructor:

Ole Soeberg is the founder of Nordic Investment Partners, a family office for three families. Ole has more than four decades of investment experience in asset management, investor relations, and investment banking.