Overvaluations in pharma and biotech reduced – Novo Nordisk, BioNxt Solutions, and Bayer are NOW in focus

Novo Nordisk – Between forecast downgrades and legal risks

Danish pharmaceutical giant Novo Nordisk is facing massive operational and legal challenges, which recently led to a significant downgrade of expectations. The Company had to revise its annual forecast for 2025 downward for the second time and now anticipates revenue growth of only 8-14%. The primary drivers of this weakness are the bitter price war and increasing competition from lower-cost generic drugs in the US, which are putting pressure on the core business surrounding Ozempic and Wegovy. The Company is already involved in over 130 lawsuits against these copycat products.

However, at the center of the storm is a massive class action lawsuit. More than 1,800 individual cases involving serious side effects of the drugs, such as gastroparesis and severe eye complications, have been bundled into a multidistrict litigation. A US federal court in Pennsylvania is now examining whether the lawsuits are supported by sufficient medical evidence to proceed. The potential financial risk for the Company is estimated at over USD 2 billion.

Despite the threatening wave of lawsuits, Novo Nordisk's outlook is not entirely bleak. The Company is responding strategically to market pressure, for example, by aggressively cutting prices for self-paying patients in order to undermine the business model of generic manufacturers. At the same time, it is pushing ahead with the development of new active ingredients such as Amycretin and CagriSema. The recent FDA approval of Wegovy for the treatment of MASH liver disease also opens up another lucrative growth area. Under new CEO Mike Doustdar, the management team faces the task of managing this offensive and stabilizing investor confidence. The share price has recently recovered from its lows for the year and is currently trading at EUR 46.38.

BioNxt Solutions – Patent offensive and accelerated US strategy

The development of BNT23001, a sublingual dissolvable film containing the active ingredient cladribine, has made a significant practical breakthrough. As the Company announced in July, the prototype formulation was successfully tested. It demonstrated promising properties in terms of drug loading and disintegration time, an essential basis for the upcoming manufacture of clinical batches. This technical validation is now underpinned by significant progress in intellectual property. At the beginning of August, both the European Patent Office (EPO) and the Eurasian Patent Organization (EAPO) confirmed the acceptance of the core claims for the corresponding patent. This acceptance paves the way for formal patent grants in these important regions in the near future and protects the composition and application of the innovative delivery method.

In parallel with European safety, BioNxt is pursuing an aggressive patent strategy in the US. A priority review (Track One) application has been filed for BNT23001. This program aims to radically accelerate the process and reach a final decision within just twelve months. This pace is strategically astute, as it secures patent protection in close proximity to critical discussions with potential partners. Even more significant, however, is the receipt of the core claims for a comprehensive "umbrella patent." This protection goes far beyond cladribine and secures the dissolvable film platform technology for a wide range of active ingredients and neurological autoimmune diseases in the long term. This broad protection creates a fundamental and valuable unique selling point.

There is a clear goal behind these maneuvers. The Company aims to capture a share of the lucrative market for neurological therapies. The oral dissolvable film technology specifically addresses weaknesses in existing treatments, such as difficulty swallowing and poor treatment adherence. BioNxt expects to receive initial preclinical data on bioavailability before the end of this year. If these confirm the targeted superiority over existing tablet-based therapy, it could pave the way for a simplified approval process in Europe. These milestones will significantly strengthen the Company's negotiating position in upcoming partnership talks. The focus is clearly on bringing the technology to patients quickly through collaborations. The stock broke out at the end of July and is currently trading at CAD 1.00.

Bayer – A turbulent quarter

Bayer's second quarter presented a mixed picture. Group revenue and operating profit before special items remained stable, with currency-adjusted figures even showing slight increases. The downside is the net result, which slipped significantly into the red due to massive special expenses for US litigation. The Pharmaceuticals division in particular shone with strong performers such as Nubeqa for cancer treatment and the kidney drug Kerendia, which more than offset the patent-related slump in Xarelto. In the Crop Science division, high demand for corn seed helped protect earnings.

A significant portion of the special expenses was related to the PCB issue. The settlement announced today in the Sky Valley Education Center case involving more than 200 plaintiffs is a strategically important step toward limiting risk. The associated costs are fully covered by the EUR 530 million in provisions already recognized. At the same time, Bayer has reaffirmed its intention to continue challenging some individual judgments in order to avoid setting potentially harmful legal precedents. A breakthrough in the glyphosate litigation would likely provide additional momentum for the share price.

For the second half of the year, the focus will be on further progress on strategic priorities and continued mitigation of legal risk overhangs. The increased full-year forecast, driven by robust pharmaceutical performance, signals operational momentum. For investors, the determined handling of the litigation blocks by the end of 2026 is likely to be the decisive lever for overcoming the ongoing valuation dip and shifting the focus back to the core operating business. While most analysts recommend holding, Goldman Sachs has issued a "Buy" recommendation with a price target of EUR 35. The share is currently trading at EUR 27.835.

The current valuation rationality opens up sustainable opportunities. Despite its innovative pipeline and new approvals, Novo Nordisk must overcome massive legal risks and the price war in the GLP-1 sector. BioNxt Solutions scores with groundbreaking patents for its oral dissolvable film technology and is accelerating its US strategy in a targeted manner, which significantly improves its negotiating position for partnerships. Bayer is showing operational stability in its core business, but remains dependent on progress in resolving its US legal disputes for a lasting recovery.