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Coming off of Novo Nordisk's (NVO) sharp stock decline after its experimental weight-loss shot CagriSema was found to help recipients lose less weight than previously forecasted, BMO Capital Markets cut its price target on the pharmaceutical company from $156 to $105 per share.
"This was supposed to be Novo's answer to Tirzepatide and Retatrutide, some higher efficacy drugs, and it kind of feels like where no man's land here. So we're really focused on next year when it comes to 4Q results, that's going to set the tone for the commercial side of these products for both Lilly and Novo," BMO Capital Markets managing director of biopharma equity research Evan Seigerman explains.
"And then mid-year for Lilly, we have Orforglipron, which is their small molecule pill GLP-1, which could really open up the market. So I feel like Novo is kind of losing its pep a little bit," he goes on to say to Brad Smith and Josh Lipton.
Seigerman — who maintains an Outperform rating Novo Nordisk — also comments on the impact the incoming Trump administration could have on the pharma space, particularly with Robert F. Kennedy Jr. assuming the role of secretary of the Department of Health and Human Services (HHS):
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"I think the first thing he could do would be make it more challenging for Medicare to cover GLP-1s for things like heart disease and sleep apnea. That's a big hypothetical..."
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This post was written by Luke Carberry Mogan.