The label expansion could help Novo Nordisk “help shift the momentum” for Wegovy, after a difficult start to 2025, according to analysts at BMO Capital Markets.
The FDA has approved the use of Novo Nordisk’s blockbuster weight loss drug Wegovy to treat adults with metabolic dysfunction-associated steatohepatitis.
BMO Capital Markets in an investor note Sunday called the approval a “step in the right direction” for Novo. Access to the MASH market “could start to help shift the momentum” for Wegovy “following a more difficult start to the year,” when compounders ate into Novo’s margins during a drug shortage. MASH could “add an incremental $1.9 billion” in peak worldwide unadjusted revenue for Wegovy, the analysts added.
Novo’s stock was up 2.9% at close Friday and added another 3.5% in pre-market trading Monday morning.
Wegovy’s MASH clearance, announced late Friday, applies to adults with moderate to advanced liver scarring but without liver cirrhosis. The GLP-1 drug should be used alongside a reduced-calorie diet and higher physical activity. The approval was given under the FDA’s accelerated pathway. Novo has an ongoing trial to confirm Wegovy’s clinical benefit in this indication.
With the approval, Wegovy becomes just the second drug approved for MASH, after Madrigal Pharmaceuticals’ Rezdiffra got the FDA’s greenlight in March 2024. Data from the Phase III ESSENCE study last year showed that Wegovy improved liver fibrosis without worsening steatohepatitis in 37% of treated patients at 72 weeks, versus 22.5% in placebo. At the same time, Wegovy resolved steatohepatitis without worsening fibrosis in 62.9% of patients, as compared with 34.1% in placebo.
Wegovy has “clear efficacy in MASH,” BMO wrote on Sunday, adding that its “clean safety profile and broad benefits across metabolic disease” could help establish the drug “as a backbone treatment for MASH.” Other GLP-1 therapies, if approved, could also fill this role, the analysts said. Wegovy’s chief competitors in this space, Eli Lilly’s tirzepatide drugs Mounjaro and Zepbound, have yet to be cleared for MASH, though Lilly has tested tirzepatide in the indication in Phase II trials.
Year-to-date, Novo’s shares have cratered nearly 50%, with analysts and investors growing skeptical of how the Danish pharma has been handling its weight loss franchise. During Novo’s first-quarter earnings call, for instance, BNP Paribas’ Peter Verdult directly challenged the company’s claims that Wegovy’s commercial execution is its top priority, despite encroaching competition from compounders—implying that branded competitors may be doing a better job on the commercialization front. “Is it really only about the compounders or do we have to consider your nearest branded competitor doing a better job?” Verdult asked.
In the second quarter, Wegovy earned 19.5 billion Danish krone ($3 billion), beating the consensus by 1%, but nevertheless lowered its full-year outlook of 13% to 21% to 8% to 14%. In May, after months of failing to stop share prices from falling, former CEO Lars Fruergaard Jørgensen stepped down from his post. The pharma last month named Maziar Mike Doustdar, its former executive vice president of internal operations, as its new top executive.
