BUZZ-Jefferies starts Novo Nordisk coverage at 'underperform' on rising competition
Jefferies has initiated coverage of Novo Nordisk with an 'underperform' rating, citing increased competition in the GLP-1 ecosystem due to rising manufacturing capacity and weaker pipeline prospects. The firm notes a surge in imports of semaglutide and tirzepatide from China, indicating lower barriers to production. This could pressure pricing power for Novo Nordisk and Eli Lilly, with market growth for peptide CDMOs expected to slow as competition increases. Jefferies also downgraded Bachem to 'underperform'.
Jefferies assumes coverage of Novo Nordisk (NOVOb.CO) with “underperform” citing rising manufacturing competition and weaker pipeline prospects as risks across the GLP-1 ecosystem
Broker says FDA data show a surge in API imports of semaglutide and tirzepatide - the active ingredients of Novo Nordisk and Eli Lilly’s (LLY.N) diabetes and weight-loss drugs -
from China, pointing to growing global capacity and lower barriers to GLP-1 manufacturing
This increases competition for peptide CDMOs like Bachem (BANB.S) and signals that GLP-1 drugs could become easier and cheaper to make, Jefferies says in a note
Brokerage cuts Bachem’s rating to “underperform”
The shift could ultimately pressure Novo Nordisk and Eli Lilly by eroding pricing power and shortening the exclusivity of future GLP-1 products - Jefferies
“The next wave of growth for peptide CDMOs is expected to be driven by the ‘next generation’ of GLP-1s. But the market potential of these assets now looks more constrained than anticipated,” Jefferies says
Broker expects Novo and Lilly to dominate up to 80% of GLP-1 volumes by 2031, but sees overall market expansion slowing as competition fragments and consumer willingness to pay premiums fades
