Jefferies starts Novo Nordisk coverage at 'underperform' on rising competition

PolyPeptide AG

27/10/2025 11:45

** 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

 (Reporting by Jesus Calero)

 ((jesus.calero@thomsonreuters.com))