Nvo Valuation

Hi Royston,   Zepbound is a known competitor which I already highlighted in both Novo and Lilly case studies. Highly recommend you to watch if you have access to Alpha Lab. Novo's thesis hasn't changed much except the company is being affected by the US Medicare program which they have to cut down their selling prices. U.S. channel mix across Novo portfolio is about 50% commercial, 30% Medicare, 10% Medicaid and 10% other. The verdict should be out end of this year and the impact could hit them starting 2027 onward. Now Trump is also threatening to raise tariff for pharma companies and Novo has manufacturing facilities in US, so I would expect they are better prepare to navigate this threat. Again, patent expiry is a common risk if you're investing in pharma company. The first patent expiry will expire in China in 2026 which might introduce a lot of copycat and Novo has been selling the price in China market at competitive pricing, one tenth of US market pricing. Patent expiry will only start in 2031 for US market which is their current biggest market. 

Thanks rusmin for the insights! sadly im not an Alpha Lab member yet, so appreciate if you can answer my very last question -  Given the above developments that may have contributed to PE multiple contraction as compared to Eli Lilly, do you think current / forward PE valuation is a very good / screaming opportunity in the long term given their high ROCE over the past 10 years? Barring in mind the risks you highlighted above?