In spite of being one of worst performing stock in 2016 among the EU Pharma, as a result of the unexpected pressure in the US Diabetes franchise, I would not chase Novo Nordisk (NYSE:NVO) in 2017, because I think the market hasn’t still recognized the threats that the company will face in the next couple of years.
I like Novo Nordisk’s R&D productivity and its best in class assets in the diabetes market but I don’t think the company is strongly poised to outperform from the current valuation of 15.8x P/E as it will still suffer from a series of headwinds in 2017 and beyond:
1. NovoSeven will face competition by ACE910 in 2017, which has recently reported positive headlines from a Phase III trial in Haemophilia A for patients with inhibitors (HAVEN 1).
