Struggling Healthcare Companies Underperforming Against S&P 500 in 2021
Article: Novo Nordisk and Regeneron Pharmaceuticals: Long-Term Growth Potential Amid Challenges
In the dynamic world of pharmaceuticals, two companies, Novo Nordisk and Regeneron Pharmaceuticals, continue to make headlines. Despite experiencing some setbacks this year, both companies show promising long-term growth potential, making them worth considering for investors.
Novo Nordisk
The Danish pharmaceutical giant, Novo Nordisk, has faced a significant stock decline of approximately 70%, dropping to $45 per share. This slide is primarily due to slowing growth expectations in core products like Wegovy and Ozempic within the U.S. diabetes and obesity markets. However, it's essential to note that the company remains profitable with solid financials.
The current price level is near key support after a large previous rally, presenting a potential buying opportunity. Analysts predict an expected recovery to previous highs (~$148) over roughly four years, implying a possible 200% gain.
Novo Nordisk is not resting on its laurels. The company continues expanding its pipeline through licensing deals and aims to launch new medicines in its core therapeutic areas. Notably, Novo Nordisk has initiated a phase 3 study for amycretin, its next-generation GLP-1 medicine.
The company's valuation (forward P/E ~16.9) is reasonable compared to industry averages and attractive given its historical faster earnings growth.
Regeneron Pharmaceuticals
Regeneron Pharmaceuticals' shares have dropped around 23% year-to-date, primarily driven by declining sales of Eylea due to biosimilar competition and market pressures. However, the company demonstrated resilience in Q2 2025, beating earnings and revenue expectations. Key products like Dupixent and oncology drug Libtayo exceeded estimates.
The company faces a challenging phase with potential continued top-line pressure. However, Regeneron has strategic reasons to recover. The company's diversification and strong earnings growth make it a contender for a comeback.
Regeneron has recently received FDA approval for Lynozyfic, a cancer medicine, in the U.S. and has a promising candidate for a gene therapy for one type of genetic deafness showing incredible potential in clinical trials. Moreover, Regeneron's HD (higher-dose) formulation of Eylea is taking market share away from its previous version and is expected to grow faster with label expansions.
Regeneron's most important product, Dupixent, has earned important label expansions in recent years, including for treating chronic obstructive pulmonary disease (COPD) and a rare skin condition called bullous pemphigoid.
In conclusion, while both Novo Nordisk and Regeneron Pharmaceuticals have faced challenges this year, their long-term growth potential and strategic initiatives make them attractive for investors. However, it's crucial to consider the near-term challenges these companies face before making an investment decision.
Investing in Novo Nordisk and Regeneron Pharmaceuticals could yield significant returns in the long term, given their resilience and strategic initiatives amid challenges. With Novo Nordisk's potential buying opportunity at a near key support level and predicted recovery to previous highs in four years, one could expect a possible 200% gain. Regeneron's recent FDA approval for Lynozyfic and the promising gene therapy for genetic deafness, along with Dupixent's label expansions, demonstrate the company's strong potential for growth despite near-term challenges. By considering the financial science that underpins these investment decisions and keeping abreast of medical-conditions treatments offered by these companies, investors could make informed decisions about their future financial health.
