Novo Nordisk A/S (NVO) shares retreated 7.57% in pre-market trading on Thursday, following a significant downgrade from BMO Capital and news of a breakthrough from competitor Eli Lilly in the weight loss medication market.
BMO Capital downgraded Novo Nordisk from Outperform to Market Perform, slashing its price target from $105 to $64. This dramatic reduction in outlook has sparked concerns among investors about the company's future growth prospects in the highly competitive obesity and diabetes treatment sectors.
Adding to the pressure, Eli Lilly announced that its experimental pill, orforglipron, achieved an average weight loss of 7.9% and improved blood sugar levels in overweight patients with type 2 diabetes during a late-stage trial. This development poses a significant threat to Novo Nordisk's market position, as Lilly's oral medication could potentially compete with Novo's injectable treatments like Ozempic and Wegovy. The news sent Eli Lilly's shares soaring nearly 13% in pre-market trading, further highlighting the shift in investor sentiment within the sector.
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