Novo Nordisk CEO Mike Doustdar said the pharmaceutical company is exploring potential mergers and acquisitions as it faces increasing competition in the rapidly expanding weight-loss drug market.
“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 said during CNBC’s Squawk Box Europe on Tuesday.
The comments came after Novo faced investor pressure following its Capital Markets Day presentation on Monday, where the company announced a turnaround strategy aimed at strengthening its position as competition increases and key exclusivity protections for its weight-loss drug Wegovy approach expiration in the early 2030s.
Novo shares were trading slightly lower Tuesday, down around 0.75%, after falling nearly 8% on Monday in the company’s worst trading session since February.
Novo Looks to Diversify Growth Strategy
Doustdar said the company provided investors with a clearer view of its future direction but acknowledged that more work remains to convince shareholders of the strategy.
“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,” he said.
Novo outlined plans to launch more than five “multi-blockbuster” drugs by 2030, which it expects will generate more than 150 billion Danish kroner ($23 billion) in revenue by 2035.
The company also projected revenue growth in line with major pharmaceutical competitors, including Eli Lilly, AstraZeneca, Amgen, Biogen, Merck, AbbVie and Novartis.
However, investors had been expecting a stronger growth outlook, with analysts saying the targets did not represent the major acceleration some had hoped for.
Competition Intensifies in Weight-Loss Drugs
Novo’s main U.S. competitor, Eli Lilly, has gained significant market share in obesity treatments through its GLP-1 medications Mounjaro and Zepbound, despite entering the market later.
Lilly CEO David Ricks said Monday that one-third of new GLP-1 patients are now using the company’s oral weight-loss pill, Foundayo, adding that the company remains confident about long-term growth.
Novo shares have declined approximately 34% over the past year, while Lilly shares have gained more than 54% during the same period.
Novo Targets New Healthcare Markets
Doustdar said Novo plans to expand beyond its traditional focus on diabetes and obesity by developing its presence in areas such as blood disorders, endocrine conditions, liver disease and cardiovascular disease.
He suggested that future acquisitions are more likely to focus on these adjacent healthcare areas rather than Novo’s existing core businesses.
“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,” Doustdar said.
“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.”
