Novo Nordisk A/S, once Europe's most valuable listed company thanks to the success of its weight-loss drug Wegovy, is now enduring its worst performance year ever due to disappointing clinical trial results, repeated profit warnings, and fierce market competition.

The Danish pharmaceutical giant's shares have plummeted over 50% this year, nearly erasing the spectacular gains made since Wegovy's approval for obesity treatment in 2021. Investors are concerned about uncertain future sales growth as the key U.S. patent for semaglutide (the active ingredient in Wegovy and Ozempic) expires in 2032.

Analyst projections suggest Novo Nordisk's sales could decline in 2026, a stark contrast to its boom-period growth rates of 25%-30%. The stock currently trades at about 14 times expected earnings, half its five-year average valuation and more than 10% cheaper than the MSCI World Pharmaceuticals Index.

Paul Major, portfolio manager at Bellevue Asset Management, stated: "From an organic perspective, their current pipeline doesn't convince me the situation is manageable." Having sold Novo Nordisk shares earlier this year, Major believes the stock may continue falling until investors see compelling catalysts to restore confidence in future growth.

Novo Nordisk faces its biggest challenge from rival Eli Lilly, whose shares have surged over 28% this year. Gregoire Biollaz, senior investment manager at Pictet Asset Management, noted: "Novo's current weight-loss drugs show inferior efficacy to Lilly's, giving Lilly stronger commercial messaging power."

This shift in competitive dynamics has influenced investor preferences. Sebastien Malafosse of Edmond de Rothschild Asset Management commented: "The market has chosen sides, believing only Lilly will benefit from the market's massive growth - an extreme position in my view."

The downturn isn't isolated to Novo Nordisk. Zealand Pharma has also dropped nearly 30% this year, reflecting pressure across Europe's weight-loss drug sector.

New management is betting on pipeline recovery to turn the tide. The company seeks accelerated U.S. approval for a higher-dose Wegovy injection and plans to launch an oral version early next year. New CEO Mike Doustdar, who took over in August, confirmed "sufficient" pill supply for target launches and preliminary talks with Hims & Hers Health Inc. about selling obesity pills via telehealth.

Biollaz suggested: "Assuming approval and successful launch, both the high-dose injection and oral Wegovy could catalyze Novo's stock recovery." Malafosse added: "They've learned lessons and will execute better this time. Novo Nordisk isn't dead - it's transitioning."

Despite the plunge, analysts remain optimistic. Of 33 tracked institutions, 17 maintain buy ratings. Berenberg's Kerry Holford called the selloff overdone, writing: "At current levels, the stock barely prices in pipeline value. Given Novo's strong R&D track record, we'd pay a premium for its pipeline."

Risks persist, however. Beyond the 2032 patent cliff, 2026 sales may decline versus historical growth rates. Market focus will center on 2026's head-to-head trial of Novo's CagriSema versus Lilly's Zepbound, along with next year's preliminary guidance.