Can Novo Nordisk's Aggressive Deal-Making Offset Semaglutide Reliance?

Novo Nordisk is acquiring Akero Therapeutics for $4.7 billion, plus a contingent payment, to gain efruxifermin (EFX), a late-stage FGF21 analog for MASH with fibrosis regression data. This strategic move aims to diversify NVO's cardiometabolic portfolio beyond its semaglutide-based drugs, which face increasing competition from Eli Lilly's Mounjaro and Zepbound, and compounded semaglutide. Despite this aggressive deal-making and other recent partnerships, NVO's shares are down 31.7% year-to-date, underperforming peers, and its earnings estimates have deteriorated, leading to a 'Strong Sell' rating from Zacks.

Analysis

Novo Nordisk is actively diversifying its pipeline to reduce significant reliance on semaglutide therapies, which constituted 65% of its H1 2025 sales. The company's strategic response includes the $4.7 billion acquisition of Akero Therapeutics for efruxifermin (EFX), a late-stage FGF21 analog for MASH. EFX demonstrated significant fibrosis regression in Phase II, positioning NVO to expand into an obesity-linked liver disease.

This strategic shift is driven by intensified competition from Eli Lilly's Mounjaro and Zepbound, which generated $14.7 billion for LLY in H1 2025, and increased compounded semaglutide usage. These headwinds prompted NVO to trim its full-year sales and profit outlook in July 2025. Consequently, NVO shares have lost 31.7% year-to-date, significantly underperforming the industry, while Akero Therapeutics' stock gained 16.3% on the acquisition news.

NVO's financial outlook remains challenged, with 2025 and 2026 earnings estimates deteriorating over the past 60 days. The stock trades at a forward P/E of 14.62x, well below its five-year mean of 29.25x. This combination of competitive pressure, underperformance, and deteriorating estimates has resulted in a Zacks Rank #5 (Strong Sell) for Novo Nordisk.

Key Decisions for Investors

• Investors should closely monitor the integration and clinical development progress of acquired assets, particularly Akero's EFX, as NVO's long-term growth hinges on successful pipeline diversification beyond semaglutide.
• Given the trimmed outlook and intense competition from Eli Lilly, investors should evaluate NVO's ability to defend its market share in the GLP-1 space and the potential for further erosion of its core revenue.
• The deteriorating earnings estimates and Zacks' "Strong Sell" rating suggest near-term headwinds, warranting caution and a re-assessment of NVO's current valuation and investment thesis.