Jefferies sees pressure on peptide manufacturers, initiates Novo with 'underperform'

PolyPeptide AG

28/10/2025 12:06

** Jefferies says competition in the GLP-1 space is intensifying as FDA data shows large imports of semaglutide and tirzepatide from China, lowering manufacturing barriers

** The broker notes this trend poses risks for peptide-focused contract manufacturers (CDMOs), which rely heavily on a few large clients like Novo Nordisk NOVOb.CO and Eli Lilly LLY.N

** Market fragmentation, with more than 150 peptide obesity assets in development, makes it harder for smaller CDMOs to secure long-term contracts, Jefferies says in a note

** "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," it adds

** Jefferies starts Novo with "underperform", using it as readacross for the broader peptide and obesity drug market

** Also cuts Bachem Holding BANB.S to "underperform" from "hold," citing weaker outlook for growth and profitability

** Expects Novo and Eli Lilly to control up to 80% of GLP-1 volumes by 2031, leaving smaller peptide manufacturers exposed to overcapacity and pricing risk

 (Reporting by Jesus Calero)

 ((jesus.calero@thomsonreuters.com))