UBS raised its 12-month price target for Novo Nordisk to 390 from 295 Danish crowns, citing valuation factors and investor attention ahead of the launch of the Wegovy weight-loss pill. The bank reiterated a Neutral rating on the stock.
“We are seeing significant focus on initial Rx data for the Wegovy pill, but the data is unlikely to fully reflect the launch,” analysts led by Matthew Weston said in a note.
Unlock more analyst moves by upgrading to InvestingPro - get 55% off today They emphasized that initial data will not capture NovoCare and telehealth channels until later in the first quarter, which represent the largest sources of cash-pay prescriptions.
Analysts said channel checks also suggest that early insurance coverage is constrained by prior authorisations and step edits, limiting the pace of uptake in the first weeks.
Based on comparisons with earlier obesity drug launches, UBS does not expect an immediate surge in prescriptions. It pointed out that both Wegovy and Eli Lilly’s Zepbound took several weeks before reaching more meaningful prescription volumes.
The analysts forecast first-quarter Wegovy pill prescriptions of around 400,000, which they said is comparable to the Zepbound launch by volume and “significantly stronger than the initial Wegovy launch given more established access.”
Looking further out, UBS estimates peak sales of $3.25 billion for the Wegovy pill, well below its $16 billion forecast for injectable Wegovy.
The bank said the lower peak reflects questions around longer-term persistence given higher dropout rates in studies, limited resistance to weekly injectables, and a more geographically concentrated rollout, with the U.S. as the primary market.
“We expect the $149 starter cash pay price and oral offering to create excitement around accessibility for the primary care community, that will likely see strong initial uptake, but we do not expect to see sustained stronger sequential growth to the end of the decade,” analysts wrote.
The price target increase was driven primarily by valuation rather than changes to earnings forecasts.
Analysts said the upgrade reflects higher sector multiples and a shift in its relative valuation for Novo Nordisk from a discount to a premium versus European pharma peers, “to reflect the historic Novo sector relative premium even during times of lower growth.”
