In healthcare, every mistake has a price—and a cohort of investors is sharpening its knives to send pharma giant Novo Nordisk (NVO) the bill. A growing posse of top-tier securities law firms is currently scrambling to haul in as many affected NVO investors as possible. At the last count, over 20 top-tier law firms from across the U.S. have hastily put out last-minute press releases all seeking to “recover losses for shareholders.”
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In a public statement, New York securities law firm Faruqi & Faruqi urged affected NVO investors to “discuss their options” if they purchased or acquired securities in NVO between May 7th and July 28, 2025. Another law firm, Glancy Prongay & Murray, published a similarly worded statement inviting investors to join a securities fraud lawsuit, setting a deadline of September 30, 2025.
The complaint claims that between May and July, Novo Nordisk withheld from investors the fact that it repeatedly downplayed and disregarded the importance of the personalization exception in GLP-1 compounding.
The complaint further alleges that Novo Nordisk “greatly overestimated” its ability to convert patients from compounded treatments and lacked the capacity to meet the needs of the broader unmet patient population. Consequently, prosecutors are expected to argue that the company’s upbeat statements about its business operations were materially misleading.
Over the past week, NVO stock endured range-bound trade with investors remaining unperturbed about the looming lawsuit. The stock edged 1.81% lower by the end of Friday. In after-hours trading, the stock reflected further negative sentiment, therefore suggesting shares could have a tough time right out of the gate next week.
Much of the negativity has already been priced in, or so the argument goes. However, that’s a rather large amount of negativity, as NVO stock has declined steadily from above $125 per share in October last year to approximately $55 this month.
The pressing question for investors is whether Novo Nordisk can withstand the legal storm and any costly fallout should its alleged missteps lead to penalties. Yet with much of the negativity seemingly baked into the share price, a strong rebound remains possible once attention shifts back to the company’s performance rather than the legal shadows overhead.
NVO Firing on Most of Its Cylinders
According to Novo Nordisk’s latest results covering the first six months of 2025, the pharma titan is hardly limping into battle. Operating profit surged 25% to DKK 72.2 billion, with U.S. sales climbing 16% and Diabetes and Obesity care up 16% to DKK 145.4 billion—fueled by a remarkable 56% jump in obesity treatments and steady growth in GLP-1 diabetes drugs. Rare disease sales also gained 14%, and management now forecasts 2025 sales growth of 8–14%, with operating profit projected to rise 10–16%. If results continue to stack up in such a fashion, NVO could well recoup some value for existing shareholders, after the stock cratered almost 60% over the past year.
Future plans could include commercializing its flagship medication, Ozempic, for the treatment of peripheral arterial disease. Additionally, NVO recently announced the advancement of amycretin into Phase III clinical development, which may well bear fruit sooner rather than later for incoming CEO Maziar Mike Doustdar.
Aside from legal issues, NVO has lowered its full-year outlook due to challenges in the U.S. market and decreased free cash flow, reflecting both positive achievements and areas of concern. Free cash flow in the first 6 months of 2025 was DKK 33.6 billion compared to DKK 41.3 billion in 2024, driven by increased capital expenditures.
Is Novo Nordisk a Buy, Sell, or Hold?
Wall Street remains upbeat about NVO, despite the numerous risk factors surrounding the stock. Among the seven analysts rating the stock via TipRanks, three are bullish, four are neutral, and bearish sentiment is not evident. NVO’s stock price target stands at $67.71 going into tomorrow’s market open, with some estimates reaching as high as $90, while the lowest target, from Evan Seigerman of BMO Capital, is $50 per share.
Boardroom Reshuffle Only Complicates Matters
Last month, Novo Nordisk welcomed Maziar Mike Doustdar as successor to Lars Fruergaard Jørgensen as President and CEO. At the time of the handover, NVO’s head chair, Helge Lund, urged the company to address market challenges with “speed and ambition” as it embarked on a clear vision of “how to unlock the full potential of the opportunities ahead.”
Among those opportunities are the potential expansion of Ozempic into peripheral arterial disease treatment and the advancement of amycretin into Phase III trials—developments that could deliver meaningful results under Doustdar’s leadership. Yet challenges remain: beyond ongoing legal issues, Novo Nordisk trimmed its full-year outlook amid U.S. market headwinds and softer free cash flow.
With so many factors in play all at once, NVO stock is currently serving as a bargain-basement-priced swing for the fences, hinging on a favorable court ruling and steady market demand for medications that continue to receive heavy media scrutiny following several reputational setbacks. And that could well be the overarching factor worthy of notice, especially for NVO bears: since 2022, NVO has acknowledged that its Ozempic medication may cause serious gastrointestinal disorders, as well as severe and potentially fatal side effects, including pancreatitis, acute kidney injury, and thyroid cancer. If consumers lose confidence in NVO’s product line, the reputational damage could prove far more costly than any court ruling.