EU#2 - From Humble Beginnings to Global Powerhouse

10.08.2026

New CEO Mike Doustdar: His strength lies less in building factories and more in building markets.

From my perspective, the share price has been driven by a lot of exaggeration. First, fueled by Novo’s success and the many celebrity headlines around Wegovy, the stock overshot to the upside. Then investors seemed to overlook just how large this market actually is. Eli Lilly suddenly became the perceived No. 1 with its next-generation product, while Novo, with its own follow-up product, was supposedly “only” in second place and at risk of being left behind. And all of this based on early studies, while at the same time ignoring the sheer size of the market. The share price now looks frightening.

But let’s look behind the scenes.

Novo is, at its core, a Diabetes Care company. Since 2019, revenue in this business has grown at a CAGR of 13.4%, which is impressive growth. Novo has also been trying to establish Rare Diseases as a second pillar, though with only moderate success. Then, almost by accident – as diabetic patients also experienced weight loss – the long-awaited second growth pillar emerged through Obesity Care. From 2023 onward, this has contributed significant additional revenue growth, lifting Novo’s total revenue CAGR since 2019 to 16.8%.

So forget the share price for a moment. What we have here is a highly successful company.

And as is often the case with successful companies, NOVO simply cannot produce enough to meet demand. That means it now has to massively expand its existing manufacturing footprint. This requires capital and time, so I think it is a good thing that Novo is not hesitating. The company is trying to increase capacity quickly and is investing heavily.

Let’s take a closer look at this transformation.

First, the raw material has to be produced: the API, or Active Pharmaceutical Ingredient. This mainly takes place in Kalundborg, Denmark, which remains Novo Nordisk’s central production hub for semaglutide and other GLP-1 active ingredients. Since 2019/2020, Novo has also been building additional API capacity in Clayton, USA, to strengthen supply for the US market. Even today, however, part of the API volumes required for the US still comes from Kalundborg.

The API is then turned into finished medicines. For the US market, injectable products such as pens are mainly manufactured in Bloomington and Fremont, two former Catalent sites acquired by Novo. For the rest of the world, fill-finish production and pen assembly mainly take place in Chartres, France, Hillerød, Denmark, and partly in Brussels, Belgium.

The tablet platform – Rybelsus and the Wegovy Pill – is much more concentrated. Oral production is currently centered mainly in Durham, North Carolina, which therefore plays a key role in the global supply of oral GLP-1 products. This creates a potential concentration risk. If demand for oral GLP-1 products continues to rise strongly, a second major production site – perhaps in Europe – could make sense over the longer term.

Hillerød is particularly interesting. The site is increasingly becoming a more universal production platform. In addition to fill-finish and device capacity, Novo is also investing there in new API facilities. The production structure is therefore gradually evolving from a single-site API model centered on Kalundborg into a three-site model built around Kalundborg, Clayton and Hillerød.

This makes Novo’s strategic direction over recent years quite clear: the company is not primarily building lots of new factories. Instead, it is massively expanding a limited number of existing sites and turning them into global production platforms for APIs, injectable products and oral therapies.

So how does the CEO change in August 2025 fit into this picture? Did one player have to leave the field so that a better one could be brought on?

From my perspective, that interpretation completely misses the point.

In my view, outgoing CEO Lars Fruergaard Jørgensen, who spent nine years in the role, did an excellent job. Under his leadership, Novo tripled both profit and revenue and, for a time, became Europe’s most valuable company by market capitalization. He turned Ozempic in Diabetes Care and Wegovy in Obesity Care into global successes. And he guided Novo through the Wegovy/Ozempic capacity crisis.

An excellent performance.

But now the challenges are changing again.

Eli Lilly is gaining market share, pricing pressure is increasing and the US is becoming the most important battleground. The key question is no longer: “Can we produce enough?” It is increasingly becoming: “Can we execute in the market better than Lilly?”

And this is exactly where the CEO change becomes interesting.

Lars Fruergaard Jørgensen was the right CEO for the build-up phase. Under his leadership, Novo Nordisk developed from the leading insulin manufacturer into the dominant force in the GLP-1 market. He guided the company through the production crisis of the Wegovy and Ozempic years, launched the largest investment program in the company’s history and created the global production platform on which future growth can be built.

But the challenges have changed.

Today, production capacity is no longer the only central issue. Increasingly, the focus is on market share, reimbursement systems, price negotiations, distribution channels and international expansion. Success will depend more and more on how quickly new products can be launched, how many patients gain access and how effectively Novo can compete against a strong rival like Eli Lilly.

This is where Maziar Mike Doustdar brings a different skill set.

While Lars was primarily seen as an operational and strategic architect of Novo’s production platform, Mike comes from the commercial side of the business. Over several decades, he managed international markets, oversaw the expansion of numerous country organizations and most recently led Novo’s entire business outside the US.

His strength lies less in building factories and more in building markets.

Those are exactly the capabilities that could become decisive in the next phase. The production platform is largely in place. The next challenge is to create access for millions of additional patients, secure reimbursement, defend market share and successfully commercialize the next generation of products – Wegovy Pill, CagriSema and future oral therapies – worldwide.

Seen from this perspective, the leadership change does not have to be interpreted as criticism of Lars Fruergaard Jørgensen.

Quite the opposite.

It may instead represent a successful passing of the baton.

Lars built the production platform. Mike now has to make sure that Novo Nordisk fully captures its economic potential.

Lars built the world’s largest GLP-1 production platform. Mike now has to make sure that Novo monetizes that platform to the fullest in an increasingly competitive market.

Valuation

Over the next 5 years I calculate with (actual values from 03.08.26, price/shr at 302 DKK):

Revenue Growth p.a.: 11% (Currently at 3%) – Sales growth from 2019 to 2025 was 16,8% p.a. thanks to Wegovy and Ozempic Boom. In the next 5 years I expect to maintain still a high level with 11%, because NOVO augments on one site the output (increase of fab capacity) and with that NOVO will grow still strong but, this will be overlapped with higher price competition, so the total slows down from nearly 17 to 11%. Actually the sales growth dropped to 3%, means the effect of price competition already hits, but the production ramp up, to compensate, lakes behind. Here comes the CEO change in place, now it is on Maziar Mike Doustdar to monetize what Lars Fruergaard Jørgensen build.

but there are three effects which add with unfortunable timeline: stock price grew too heavy (exaggeration), product prices are now under preasure (correction) and the productivity increase still lags behind (ramp up not ready to compensate directly). I totally rely on Maziar Mike Doustdar, he will monetize the newly installed production platform.

Profit Margin: 35% (currently at 35%) – in the last ten years profit margin was between 31 and 35% p.a.. I op for the higher end, and I wouldn’t be surprised if Mike even runs NOVO at >36%.

Future PE: 24 (currently at 11) – in the last 10 years PE was between 20 to 45, actual at 11. But I estimate for the next 5 years a PE of 24, basically back to normal. To understand this strong up and down, we need to look on earnings and share price. Earnings doubled since 2022 because of Wegovy and Ozempic Boom. So share price first double, but because of greed and FOMO kept growing (exaggeration), then came very soon the price competition and the delay in increase of production capacity, so these led to the next exaggeration, the share price dropped strongly. Soon we will be back to normal.

Discount rate: 4,74% (same as current)

Which leads to an FV of 849 DKK (estimated share price in 2031: 1.070 DKK), means NOVO trades with 64% under fair value.

I calculate the internal rate of return (IRR) of an investment at current stock price on a period of 5 years. At current value I get 28,8% annual return on share price, including dividends even 32,4%.

This is significant over my expectation of 10%.

Series: The biggest EU stocks:

#1 – SAP

#2 – Novo Nordisk

#3 – ASML

#4 – LVMH

#5 – Siemens

#6 – Airbus

#7 – Inditex

#8 – Anheuser-Busch

#9 – Nestle

Coming soon:

#10 – ABB

#10 – any proposal from your side

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