Novo Nordisk
The most profitable new drug category in a generation, and a share price that already knows it. We hold what we own and refuse to add until supply and pricing settle.
Pricing pressure and new entrants are arriving at the same moment as manufacturing capacity.
GLP-1 drugs are one of the rare pharmaceutical categories that changes the economics of the healthcare system rather than just the treatment of a disease. The problem for investors is that everyone knows this, and the valuation for years has assumed both continued volume growth and continued pricing power.
Two variables decide the outcome
Manufacturing scale and net price. Volume is not in question. What the market is now beginning to test is whether the price per prescription holds as competitors enter and payers push back. A drug that is essential and cheap is still a good business; a drug that is essential with a collapsing net price is a lower-margin business that has to sell far more units.
The rest of the Novo Nordisk thesis
Includes the risks we think matter, the numbers we check each quarter, and the exact conditions under which we would sell.
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