By Sabrine Boudella, Director, Corporate Ratings

Long regarded as having one of the industry’s most compelling growth stories, the Danish company said last week that adjusted sales in 2026 would likely decline by 5%–13% when excluding currency effects and the impact of U.S. discounts to certain hospitals. This update exposed vulnerabilities of Novo Nordisk, specifically that its concentrated revenue base increases its vulnerability to pricing pressure.

To be sure, investors, whose panic led to a 25% drop in the company’s share price on the day of the announcement, were aware of Novo Nordisk’s reliance on the obesity and diabetes treatments even as the company diversified into rare diseases, hemophilia, and other chronic diseases. Sales outside diabetes and obesity represented less than 7% of total revenue in 2025.

What investors may have overlooked is that reliance on a single mechanism of action adds a dimension of risk that is distinct from concentration on treating a specific disease. 

Novo Nordisk’s GLP 1 portfolio dependent on a single mechanism of action

Novo Nordisk has used glucagon-like peptide-1 (GLP-1), a naturally occurring hormone, as an engineering platform, developing multiple drugs within the same asset class. While we acknowledge technical variation in the approach, the underlying mechanism remains fundamentally GLP-1-based, so diversification within the platform is incremental rather than transformational.

The GLP 1 portfolio accounted for around 49% of Novo Nordisk’s sales, but if we consider obesity focused GLP 1-based treatments too, total exposure rises to around 76%.

Dupixent and the single-brand perception gap

Novo Nordisk’s model offers an instructive comparison with that of French rival Sanofi, whose key product, Dupixent, is built on a single mechanism of action targeting IL 4/IL 13 type 2 cytokines.
Dupixent, while a single brand, spans multiple indications, including atopic dermatitis, asthma, chronic rhinosinusitis, and others, providing Sanofi with diversification within a single biologic platform. By contrast, Novo Nordisk markets several brand names under the same GLP 1 mechanism, creating the appearance of broader portfolio diversification even though the underlying pathway is shared.

Structural differences between the two franchises are complex and reflect the nature of the molecules: Dupixent is a monoclonal antibody biologic, while GLP 1 drugs are peptide-based. Both types of drugs are broadly patented, though the strategies differ: Dupixent’s protections focus on composition and manufacturing processes, along with regulatory exclusivities that biologics enjoy, while Novo Nordisk relies on formulations and extensive patent layering across its GLP 1 brand names.

Sanofi has faced scrutiny for its perceived concentration risk, while Novo Nordisk’s reliance on multiple GLP 1 brands had received comparatively less scrutiny. Yet Dupixent represented 36% of total sales in 2025, underscoring its importance to the group without implying excessive concentration risk.

Combining strategic focus and diversification is key

Several European pharmaceutical firms have made a clear strategic shift in recent years toward greater focus on core therapeutic areas. Crucially, strategic focus and diversification tend to be complementary and not mutually exclusive. Within core therapeutic areas, a balanced mix of products, underlying indications, modalities and mechanisms of action is essential to mitigating execution, regulatory, and competitive risks.
AstraZeneca and Roche are examples of companies which have made a virtue of diversification. AstraZeneca’s portfolio spans oncology, cardiovascular, respiratory and immunology, rare diseases, vaccines, and metabolic medicines, including ambitions in weight-loss treatments. Its major products rely on varied biological mechanisms, giving it a broad scientific base.

At Roche, the strength of its diagnostics division has helped offset the decline in sales in its blockbuster cancer treatments Herceptin, Avastin and Rituxan since their 2019 peak. Sanofi meanwhile remains diversified across therapies and technologies, but its recent growth trajectory has been driven by the continued expansion of Dupixent.
Sales figures show how the pattern of diversification in the European sector is uneven. The three top-selling drugs account for 21%–34% of revenue at AstraZeneca, GSK, Novartis and Roche, but 47% at Sanofi and 74% at Novo Nordisk, making the Danish corporate a clear outlier (Figure 1).

From a credit perspective, these figures have an important lesson: even a top-tier, innovative, and market-leading business is not immune to significant volatility if its product range is too concentrated. Diversification across business units and therapeutic areas can materially mitigate downside risk through the cycle, smoothing performance during periods of structural change, particularly in the pharmaceutical industry, where patent expirations pose a structural risk.

Azza Chammem, Associate Director, contributed to this report.