Novo Nordisk's B shares (CPH:NOVO-B) climbed 9.9% over three sessions, closing at 307.75 Danish crowns on Tuesday, following a South African court order that blocked a rival from supplying compounded semaglutide. The stock rose 2.6% on the day, while the broader OMXC25 index dipped 0.07%.
The court on Monday ordered iDexis to cease compounding, supplying, and marketing semaglutide products while they remain under regulatory review. Novo Nordisk disclosed in court filings that iDexis had been supplying approximately 84,500 compounded semaglutide units per month in South Africa—a volume that surpasses Novo's combined sales of Ozempic and Wegovy in the country.
Compounding refers to pharmacies preparing or adjusting a drug for individual patients, often as a lower-cost alternative. The court filing did not specify whether iDexis's unit measure matches Novo's packaging, making revenue conversion uncertain. However, the ruling could redirect demand toward Novo's branded products, potentially boosting sales without lengthy approval processes.
Price sensitivity remains a challenge. Novo earlier this year reduced the lowest Wegovy dose price to 1,873 rand from 3,090 rand, but Eli Lilly's Mounjaro had already captured 52% of the South African market by late January. Thabeng Leping, Novo's market-access head in South Africa, acknowledged that original prices were not conducive to the local market.
Novo's share buyback program provided additional support. The company repurchased 20.96 million B shares since February 4 at an average price of 266.09 crowns, spending 5.58 billion crowns. By Tuesday's close, those shares were valued at approximately 6.45 billion crowns, a gain of 873 million crowns. Daily buybacks averaged 215,000 shares last week, representing 3.5% of Tuesday's trading volume. If Novo completes its remaining 15 billion-crown buyback at current prices, it would acquire about 30.6 million shares, or 0.69% of total shares outstanding.
While the buyback helps absorb selling pressure, it alone does not explain the 9.9% three-session rally. The court order could shift prescription patterns, but the buyback only transfers a small ownership stake.
In the U.S., CVS Health announced it will introduce a $50 monthly copay for eligible Medicare patients starting July 1 under a federal program. This could increase volume for Novo's drugs, but the initiative is not exclusive to Novo. CVS also partners on NovoCare discounts for Wegovy and Ozempic. Sid Tenneti, a CVS pharmacy executive, noted that access alone is insufficient; patient support is essential for adherence and outcomes.
Novo's U.S.-listed shares rose 3.4% to $47.42 on Tuesday, adding to Monday's 6.2% gain, while the S&P 500 fell 1.4%.
The South African order is interim, and price-sensitive buyers may continue favoring Lilly's Mounjaro. Novo may need further price cuts to capture volume. The company maintains its 2026 guidance for adjusted sales and operating profit to decline 4% to 12% at constant exchange rates.
