Novo Nordisk (NVO)

One Molecule Carries the Company

Novo Nordisk is the most concentrated of the six large drugmakers covered here. Semaglutide, a GLP-1 drug (the class used for diabetes and obesity) sold as Ozempic, Wegovy and Rybelsus, earned DKK 228,288M in FY2025, 73.9% of net sales of DKK 309,064M. Ozempic alone was DKK 127,089M (41.1%).

That share is far above the 40% line the concentration map uses for high concentration. Lilly's tirzepatide, the rival GLP-1 at 56.0% of Lilly's revenue, is the nearest case. Novo also reports in Danish kroner, so every dollar comparison passes through the exchange rate.

Patent Dates Differ by Country

The semaglutide active-ingredient patent runs to 2032 in the US and 2031 in Japan and Europe, but ends in China in 2026 (Annual Report 2025, patent table on p.25). The China event is small. Semaglutide sales in Region China were DKK 6,815M in FY2025, 2.2% of net sales (Form 20-F table of key products with recent or upcoming patent expiry); with Victoza and Saxenda, all GLP-1 sales there were DKK 7,444M (2.4%).

Those two older GLP-1 brands, Victoza (DKK 3,020M) and Saxenda (DKK 3,241M), were 2.0% of sales together. Both have lost compound protection everywhere, and US Victoza generics have been licensed since June 2024.

A price event comes before any US patent date. Ozempic, Rybelsus and Wegovy were selected for Medicare price negotiation under the Inflation Reduction Act (IRA), with the negotiated price taking effect in 2027. The patent stays and no copy enters; the price reaches only the Medicare part of US semaglutide sales, which in total were 48.0% of group sales (patent expiry dates by company).

Margin, R&D and Payout

Operating profit was DKK 127,658M, a 41.3% margin, level with Lilly's 40.3%. R&D was DKK 52,039M, 16.8% of sales: below Lilly's 20.5% and Merck's 24.3%, inside the ~15-25% range often quoted for large drugmakers. Novo and Lilly differ on concentration (73.9% against 56.0%) and on US patent date (2032 against 2036), not on margin.

The dividend was DKK 11.70 per share, 50.7% of net profit, against Lilly's 26.1%. Novo returns a larger share of profit while semaglutide still funds its capacity build.

Valuation Framework

A company this concentrated is valued drug by drug. Semaglutide's cash flows run to its dated patent expiries, China first, then 2031 and 2032. Newer drugs still in trials are valued with risk-adjusted NPV (rNPV), which weights revenue by the probability of success: 7.9% from Phase I on the BIO 2011-2020 rates, 9.1% for biologics. The discount rate stays an ordinary cost of capital, and clinical risk sits in the success weights. For a dollar comparison, state the exchange rate and its date, and use one date throughout.

What to Watch in the Financials

Semaglutide share of net sales. 73.9% in FY2025. A plateau in Wegovy uptake or Ozempic volume shows up at once, because nothing else Novo sells is big enough to absorb it.

China 2026 and the older GLP-1 lines. China is 2.2% of sales and Victoza and Saxenda a further 2.0%. They are the first dated declines a model can build before the 2031 and 2032 expiries in the larger markets.

The dollar. US semaglutide sales alone were 48.0% of FY2025 group sales, so a weaker dollar lowers growth reported in kroner. Novo's 2026 guidance puts sales growth in kroner about 3 points below growth at constant exchange rates, mainly for that reason (Annual Report 2025).

Key Risks

Single-molecule dominance. A copy or rival drug that takes share faster than new drugs replace it hits the whole company.

GLP-1 duopoly. Lilly's tirzepatide is the direct challenger. Novo's revenue can still grow while tirzepatide takes share, so watch semaglutide's share of the class as well as its revenue.