Novo Nordisk Searches for Growth Beyond its Biggest Franchise

Novo Nordisk A/S (NYSE:NVO) is defending its push to diversify beyond obesity as CEO Mike Doustdar signals that the company is willing to pursue deals to build growth outside its core weight-loss franchise. At its September 2026 Capital Markets Day, Novo said it aims to launch more than five multi-blockbuster medicines by 2030 and generate more than DKK 150 billion ($23 billion) in pipeline sales by 2035. It also plans to have at least five Phase 3 programs in obesity and diabetes and at least five in other therapeutic areas.

The strategy addresses a clear concentration risk. Obesity and diabetes accounted for more than 90% of Novo’s sales in 2025, while obesity sales reached DKK 82.3 billion, up 31% at constant exchange rates. At the same time, Novo is facing stronger competition from Eli Lilly and increasing pricing pressure in the U.S.

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Novo Nordisk Expands its Pipeline as Obesity Competition Intensifies

Diversification could reduce Novo Nordisk A/S’s dependence on semaglutide as its main growth engine. The company faces a longer-term patent challenge around semaglutide, while competition is already affecting pricing and market share. In the second quarter of 2026, U.S. Wegovy injectable sales fell 22% at constant exchange rates because of lower realized prices, although combined injectable and pill sales still increased 4%.

Novo’s strategy also does not mean abandoning obesity. The company is expanding its portfolio with oral Wegovy, CagriSema, and zenagamtide while pursuing opportunities in areas such as cardiovascular, kidney, liver, and rare diseases. Recent CagriSema data showed 12.4% average weight loss versus 9.1% for tirzepatide 5 mg in the REIMAGINE 5 trial, giving Novo additional potential products as competition intensifies.

If acquisitions or partnerships add commercially viable products to these areas, Novo could create additional revenue streams before the semaglutide patent window becomes a larger issue. The company’s target of more than DKK 150 billion in pipeline sales by 2035 provides a measurable framework for whether the diversification strategy is translating into future growth.

Acquisition Costs Could Test Novo Nordisk’s Diversification Strategy

The main risk is that diversification through acquisitions could dilute returns if Novo Nordisk A/S pays high prices for assets that fail to produce blockbuster revenues. The pharmaceutical industry is already facing expensive competition for late-stage biotech assets, while Reuters notes that expected R&D returns across the industry have fallen toward roughly 9%, only modestly above an estimated 8% cost of capital.

Novo also has to execute its diversification strategy while defending its core franchise. Its diabetes value market share fell 3.6 percentage points to 30.1% in 2025, while obesity competition has intensified. Eli Lilly’s Zepbound is expected to generate roughly $7 billion more in sales than Wegovy in 2026, according to Reuters.

Pricing adds another pressure point. Novo reported lower realized U.S. prices for its portfolio in 2025 and expects continued pressure from rebates, payer consolidation, and increasing competition. Spending heavily on acquisitions while margins are already exposed to pricing pressure could make the strategy less accretive if new products take years to reach scale.

Conclusion

Novo Nordisk A/S’s diversification push could broaden its revenue base and reduce its reliance on obesity drugs, particularly as competition and pricing pressure intensify. The company already has a sizeable pipeline outside traditional weight loss, but the financial outcome will depend on whether new medicines and acquisitions can generate meaningful sales without consuming excessive capital.

With obesity and diabetes still representing more than 90% of sales, diversification is a long-term growth strategy rather than an immediate replacement for Novo’s core franchise.

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This article is originally published at Insider Monkey.