Because Morgan Stanley made the most bearish target price projection of any Wall Street bank on the Danish drugmaker, analysts say a trial to see if Novo Nordisk’s popular weight-loss medication will also work against Alzheimer’s is likely to fail.
Morgan Stanley lowered the price objective for Novo Nordisk’s (NVO) (DK:NOVO.B) U.S.-listed stock from $59 to $47 and downgraded the company’s rating from equal weight to underweight.
Only Intron Health has a lower price target of $46.72, per FactSet.
Novo shares fell 3% to $53.80 in premarket trading.
When data are released in the upcoming weeks, analysts led by Thibault Boutherin predict that a trial of semaglutide, the main component of Ozempic and Wegovy, has a 75% chance of failing to achieve statistical significance in lowering dementia.
They claim that the share price should drop by a high single-digit percentage as a result of that failure.
They also perceive additional issues. While weekly prescriptions for Eli Lilly’s (LLY) Mounjaro are increasing at a linear rate, weekly prescription data for Ozempic has been decreasing over the past few months.
They anticipate that Medicare Part D will reduce the cost of semaglutide by 50%, and that a comparison of CagriSema, their next-generation weight-loss medication, with Lilly’s Zepbound won’t reveal any differences.
