A new era in medicine is dawning: How Novo Nordisk, NetraMark Holdings, and Bayer are benefiting from AI and personalization

Novo Nordisk – Why the pharmaceutical giant is now becoming interesting

The past few months have been turbulent for Novo Nordisk - the repeated downward revisions of its forecasts for 2025 paint a clear picture. Growth has slowed noticeably. Management initially targeted 23% EBIT growth, but revised this target to 20% after the first quarter and to 13% after the second quarter, and the figure could weaken further in the coming quarter. This latest revision includes special expenses in the course of a comprehensive restructuring. The announcement to cut 11% of the global workforce is expected to save DKK 8 billion annually by the end of 2026 and support margins by 2-3%. At the same time, a complete change in the Company's management is pending, which is causing additional uncertainty.

The political risks in the US business are real, but not new. Renewed pressure from the White House to lower prices for anti-obesity drugs is a constant challenge in the pharmaceutical business. For Novo Nordisk as a European company, this could even put it at a disadvantage compared to its US competitor Eli Lilly. The recent appointment of a new head of corporate affairs with experience at Sanofi, Pfizer, and AbbVie underscores how political the price discussion has become. This noise is part of the business, but it is no reason to ignore the Company's fundamental strengths. The focus should be on the vast, unsaturated global market.

The figures speak for themselves: of the 934 million people who are obese, only around 4 million, or around 0.5%, are currently being treated with branded drugs. That is a negligible penetration rate. In addition, only around 15% of the 589 million diabetes patients have well-controlled blood sugar levels. Novo Nordisk expects 853 million diabetes cases by 2050. This long-term structural trend is a strong counterpoint to the current US fixation and competitive pressure. Although Eli Lilly is currently growing faster, the overall market is large enough for several winners. The stock is currently available for EUR 44.93.

NetraMark Holdings – The quiet disruptor for clinical trials

The pharmaceutical industry is struggling with a costly problem: up to 85% of all drug candidates fail in Phase 2 trials. Even those that clear this hurdle still face a failure rate of 50-65% in Phase 3. In this environment, NetraMark Holdings positions itself as a precise problem solver in the background. With its proprietary AI solution, NetraAI, the Company starts at the very point where most trials fail, in the complex web of thousands of patient data points. The NetraAI platform leverages data from completed studies, which can include up to 20,000 variables per patient. Its goal is to identify hidden patient subgroups, i.e., those specific combinations of characteristics that promote weak efficacy or undesirable side effects. Ultimately, the system provides precise recommendations for optimizing the inclusion and exclusion criteria for the next study.

NetraMark has established a number of partnerships that validate its business model externally. A collaboration with the National Institute of Mental Health to analyze ketamine data has been submitted to a highly regarded journal. A publicly traded biopharmaceutical company with a market capitalization of over USD 10 billion has expanded its collaboration from one to four studies. Recently, a collaboration with the Mayo Clinic was added to analyze data on glioblastoma (GBM). Another strategic move is the partnership with Worldwide Clinical Trials (WCT) to give WCT customers the option of integrating NetraAI directly into their studies.

The Company operates with gross margins of over 90%. This figure appears very high, but can be explained by the predominantly variable costs for cloud instances. Fixed costs are largely covered by administrative expenses. The Company considers scalability to be a given. The current infrastructure can handle about four projects in parallel. Within the next eight months, the platform is to be further developed so that it can handle 500 projects simultaneously, with only a marginal increase in variable costs. For investors who believe in the transformative power of AI in the pharmaceutical industry, NetraMark is worth a closer look. The stock is currently trading at CAD 1.27.

Bayer – Turnaround with obstacles

For Bayer investors, recent months have been a rollercoaster ride. After several challenging years, the stock has shown a significant recovery, but the Company remains in a state of upheaval. The second quarter highlights this conflict. Revenue fell to EUR 10,739 million, while EBIT slumped to just EUR 13 million. On a positive note, the Company has raised its annual forecast. Earnings per share are now estimated at EUR 4.80 to EUR 5.30. At the same time, strategic refocusing is underway, as evidenced by significant staff reductions. The headcount has shrunk by over 7,000 employees. The shift from a purely cost-cutting program to an innovation-driven company is still in progress.

A look at the business segments reveals both strengths and weaknesses. The crucial Crop Science division recorded a decline in revenue to EUR 4,788 million and remained under pressure with a negative EBIT of EUR 414 million. In the Pharmaceuticals segment, revenue fell slightly, but products such as Nubeqa and Kerendia posted strong growth of 51% and 67%, respectively, helping offset the loss of patent protection for Xarelto. Consumer Health proved the most stable pillar, with EBIT rising 69.6% to EUR 229 million. The recent FDA approval of the menopause drug Lynkuet® (elinzanetant) in the US could further boost the Pharmaceuticals division and demonstrates that the pipeline is starting to deliver.

The numerous lawsuits remain a key issue, but Bayer is making progress in limiting the damage. The Company is pursuing a multi-pronged strategy to essentially contain the litigation by the end of 2026. Thousands of glyphosate cases were recently settled through settlement agreements. At the same time, Bayer is investing in future technologies. For example, the Phase 3 exPDite-2 study with the cell therapy candidate Bemdaneprocel for Parkinson's disease has been launched. The combination of legal risk minimization and the development of groundbreaking therapies in the fields of cell and gene therapy is intended to lay the foundation for a sustainable recovery. The share price is currently EUR 27.44.

The era of personalized, AI-supported medicine is opening up transformative growth paths. Despite short-term turbulence, Novo Nordisk is addressing the structurally intact megamarket for obesity and diabetes. As an AI pioneer, NetraMark Holdings is disrupting the expensive process of clinical trials with its NetraAI platform and offering extreme scalability. Bayer, on the other hand, is struggling to emerge from its slump with promising pipeline products and risk management. The path to the medicine of the future is diverse, and early identification of the right technology drivers will determine investment success.