Novo Nordisk: Raising Our Fair Value Estimates to DKK 540/$80 as We Update Our Long-Term GLP-1 Model

We’re raising our Novo Nordisk fair value estimates to DKK 540/$80 (from DKK 475/$70) after updating our long-term GLP-1 model to include wider use and greater adherence. We have increased our assumptions for overall biopharma GLP-1 sales in 2031 to nearly $170 billion across diabetes ($50 billion), obesity ($85 billion), and overweight ($35 billion). This includes nearly $140 billion in sales from big biopharma firms Novo Nordisk ($65 billion), Eli Lilly ($65 billion), Pfizer ($4 billion), and Amgen ($3 billion), which is higher than our prior estimate of just over $100 billion. Overall, we assume a greater proportion of patients will receive (and stay compliant with) treatment, including overweight (lower BMI) patients, albeit with more competition and at a lower price. We now think more than 25% of obese Americans and 15% of overweight Americans will receive treatment in 10 years, with the vast majority receiving branded GLP-1 therapies. We think prices could fall substantially as volumes increase (in line with payer contracts) and as new entrants launch (beginning in 2026-27), with average net prices falling from roughly $8,000 annually to $3,000 in 10 years. Beginning in 2032, we expect low-cost generic semaglutide to increase treatment rates, likely focusing sales of next-generation products like Novo Nordisk’s cagrisema and Eli Lilly’s retatrutide on patients with higher BMIs who require the most potent therapies. With more than 80% of our 2026 Novo Nordisk sales forecast stemming from GLP-1 therapies, we think the still-evolving efficacy and safety profiles of these next-generation therapies creates high uncertainty around our Novo Nordisk fair value estimate, and we have raised our Uncertainty Rating to High from a prior Medium level. However, we think Novo Nordisk’s impressive innovation in the cardiometabolic space and smart capital allocation provide ample support for its wide moat.