It's been a brutal year for Novo Nordisk A/S (NVO). The stock has cratered roughly 41% year-to-date, transforming what began as Europe's most valuable listed company into a cautionary tale about maintaining competitive edges in fast-moving markets.

The troubles really accelerated when Novo Nordisk unveiled results from the REDEFINE 2 phase 3 trial, testing its combination drug CagriSema (cagrilintide 2.4 mg plus semaglutide 2.4 mg) delivered once weekly. The data showed 16% weight reduction compared to placebo, but that wasn't enough to reassure investors who'd hoped for more impressive numbers.

Then came the guidance cuts. First in May, Novo lowered its 2025 sales growth expectations. That alone would sting, but the company doubled down in July with another trim to guidance. By the third quarter, the Danish drugmaker had revised its sales growth outlook to just 8-11% at constant exchange rates. Three cuts in one year tells you everything about how quickly the competitive landscape shifted.

The Patent Clock Is Ticking

Here's something that should worry long-term Novo investors: the core U.S. patent for semaglutide, the active ingredient that powers both Wegovy and Ozempic, expires in 2032. That's not exactly around the corner, but it's close enough that Wall Street is starting to ask hard questions about what comes next and whether the pipeline can deliver.

The contrast with Eli Lilly couldn't be starker. While Novo's shares collapsed, Eli Lilly and Co. (LLY) stock climbed about 38% over the same period. When two competitors move in opposite directions this dramatically, it's worth understanding why.

Pipeline Problems and Portfolio Breadth

"When I look at it right now, organically, their pipeline doesn't convince me that this situation is manageable," Paul Major, a portfolio manager at Bellevue Asset Management, explained to Bloomberg. Major sold his Novo shares earlier this year and thinks the stock will keep declining until investors see something compelling that restores confidence in future growth.

Look at the pipelines and you'll see what he means. Novo Nordisk's development portfolio concentrates heavily on insulin products, heart disease medications, and weight loss drugs. It's not a bad lineup, but it's narrow.

Eli Lilly's pipeline, by comparison, reads like a pharmacy catalog: cancer treatments, weight loss drugs, Alzheimer's therapies, arthritis medications, psoriasis treatments, allergic rhinitis drugs, gastric disorder medicines, and dermatology products. That diversification gives investors multiple shots on goal and cushions against setbacks in any single category.

The Wegovy Launch That Haunts Them Still

Novo had a chance to dominate the obesity drug market when Wegovy won U.S. approval in mid-2021. The drug marked a genuine breakthrough in obesity treatment and has generated $46 billion in net profit since launch. That's real money.

But the company fumbled the execution. A July report revealed that Novo Nordisk executives allegedly ignored internal warnings that the company wasn't prepared to launch Wegovy. That failure to capitalize on first-mover advantage came back to bite them hard.

This year, Lilly's Zepbound surpassed Wegovy in weekly new prescriptions. Think about that. Novo entered the market years earlier with a superior product position, yet somehow Lilly caught up and passed them. That's not just bad luck; that's execution failure.

If Novo manages to bring its oral obesity pill to market before Lilly, pricing and availability will determine everything. Investors will watch closely to see whether the company learned from its Wegovy mistakes or is doomed to repeat them.

Not All Bad News: Real-World Cardiovascular Data

Novo did score a win in September when it presented data from the STEER real-world study. Compared with Eli Lilly's tirzepatide (sold as Zepbound and Mounjaro), Wegovy showed a significant 57% greater risk reduction for heart attack, stroke, cardiovascular-related death, or death from any cause in people with overweight or obesity and cardiovascular disease. That assumes patients stayed on treatment without gaps exceeding 30 days.

Strong cardiovascular outcomes matter enormously for long-term market positioning. But right now, investors seem more focused on market share losses and pipeline concerns than they are on clinical differentiation.

What's Next: 2026 Showdown

Investor attention is already shifting to a planned 2026 head-to-head trial pitting Novo's CagriSema directly against Lilly's Zepbound. That trial could reshape perceptions of both companies' obesity franchises, and Novo's initial guidance for the year will signal whether management thinks the bleeding has stopped.

Here's the really sobering part: analyst estimates tracked by Bloomberg now point to potential sales declines in 2026. That would mark a stunning reversal for a company that posted 25-30% growth during its peak years. Going from that kind of expansion to actual contraction in just a couple of years shows how fast competitive dynamics can shift in pharmaceuticals.

NVO Price Action: Novo Nordisk shares traded down 1.13% at $49.80 during Tuesday's premarket session.