I have expertise and more than two decades of research in this field. I think Novo is priced as if they have 5% market share and no pipeline. Reality is they have around 40% market share for obesity and diabetes. 40%!!! If we were comparing similar market share breakdown for NVDA vs AMD, we would have assigned a different price to the laggard. Second, we think of 23% weight loss on Cagrisema as a failure. More than 75% of patients do not need to lose more than this much weight. Also look at weight loss results from other companies, like B.I for survo... makes Cagrisema look much better. Also 2031 patent expiry isn't tomorrow. there are already NDA submitted (Cagrisema) and trials under way for phase 3... so i am taking the historically low valuation, 4% dividend yield and getting paid to wait.
There are estimated 1 billion patients with obesity. even 5% market share of that by 2035 will be unimagineable.
I am always amazed by how popular Novo Nordisk is with many financial commentators.
I believe that your call as it being outside your circle of competence is a wise one and one I firmly share, even though are maybe especially because I work in healthcare.
I like the separation between cheap and confirmed. A low multiple can tell you expectations are low, but not that the marginal seller is done. The higher low plus a held downtrend break is the kind of evidence that would make the fundamental asymmetry actionable.
Perception can always get worse. The better question is whether it's already worse than the business. At its capital markets day, Novo guided to a considerable slowdown in growth, and the stock has fallen from about $140 (2024 high) to under $40. The number to watch is GLP-1 prescriptions: if volume keeps growing while prices fall, the gloom is in the price. If volume rolls over too, it isn't gloom, it's the forecast.
Hi René, I will try to give you my feedback, as you suggested. First of all, I only use the 200-week SMA, volume, and weekly RSI as indicators to get some context, but I mainly rely on fundamental analysis, as I show in all my theses.
I think that, if the GLP-1 market becomes a volume-driven market, manufacturing capacity could eventually become almost as important as patents. Furthermore, the projections for the GLP-1 market are quite positive (around an 8% CAGR until 2035). Based on this, in my view, the “worst” issue of Novo (the revenue growth) seems to be only a temporary problem. Once discounts are fully applied, the business should continue growing at the GLP-1 market pace. (Not financial advice).
You can read all of my reasoning in the Novo thesis I published some weeks ago, and actually I would love to have your feedback.
I have expertise and more than two decades of research in this field. I think Novo is priced as if they have 5% market share and no pipeline. Reality is they have around 40% market share for obesity and diabetes. 40%!!! If we were comparing similar market share breakdown for NVDA vs AMD, we would have assigned a different price to the laggard. Second, we think of 23% weight loss on Cagrisema as a failure. More than 75% of patients do not need to lose more than this much weight. Also look at weight loss results from other companies, like B.I for survo... makes Cagrisema look much better. Also 2031 patent expiry isn't tomorrow. there are already NDA submitted (Cagrisema) and trials under way for phase 3... so i am taking the historically low valuation, 4% dividend yield and getting paid to wait.
There are estimated 1 billion patients with obesity. even 5% market share of that by 2035 will be unimagineable.
A concise and well reasoned summary!
I am always amazed by how popular Novo Nordisk is with many financial commentators.
I believe that your call as it being outside your circle of competence is a wise one and one I firmly share, even though are maybe especially because I work in healthcare.
I like the separation between cheap and confirmed. A low multiple can tell you expectations are low, but not that the marginal seller is done. The higher low plus a held downtrend break is the kind of evidence that would make the fundamental asymmetry actionable.
Perception can always get worse. The better question is whether it's already worse than the business. At its capital markets day, Novo guided to a considerable slowdown in growth, and the stock has fallen from about $140 (2024 high) to under $40. The number to watch is GLP-1 prescriptions: if volume keeps growing while prices fall, the gloom is in the price. If volume rolls over too, it isn't gloom, it's the forecast.
Hi René, I will try to give you my feedback, as you suggested. First of all, I only use the 200-week SMA, volume, and weekly RSI as indicators to get some context, but I mainly rely on fundamental analysis, as I show in all my theses.
I think that, if the GLP-1 market becomes a volume-driven market, manufacturing capacity could eventually become almost as important as patents. Furthermore, the projections for the GLP-1 market are quite positive (around an 8% CAGR until 2035). Based on this, in my view, the “worst” issue of Novo (the revenue growth) seems to be only a temporary problem. Once discounts are fully applied, the business should continue growing at the GLP-1 market pace. (Not financial advice).
You can read all of my reasoning in the Novo thesis I published some weeks ago, and actually I would love to have your feedback.