NVO

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$NVO basically the conclusion I came up with are two things I believe. 1) Obesity market will continue to explode, I’m 99% sure it will reach 10 million/1 billion (or 1% TAM for novo Nordisk). Don’t know if it’s next year or year after that. However near certainty. 2) Every dollar I put in now basically is free money for the future 😂 😂 All personal opinions, not financial advice. Long NVO

$NVO let me use some hardcore numbers to do some math for everyone to understand. The key Novo Nordisk thesis is not that obesity-drug prices will remain high. It is: Can falling prices expand the number of treated patients fast enough to overwhelm lower revenue per patient? Novo may be transitioning from a high-priced, capacity-constrained obesity market into a lower-priced mass chronic-care market. If so, price compression could ultimately expand rather than destroy the profit pool. ⸻ 1. The market may be watching the wrong number The bearish argument is: Lower Wegovy prices → lower revenue per patient → lower profits. But that ignores volume elasticity. Suppose Novo treats 5M obesity patients at DKK18,000 annual revenue per patient: 5M × DKK18,000 = DKK90B revenue. Now cut revenue per patient 50% to DKK9,000. At the same 5M patients, revenue collapses to DKK45B. But if lower prices, broader coverage and greater capacity expand treatment to 20M patients: 20M × DKK9,000 = DKK180B. Revenue doubles despite a 50% decline in revenue per patient. That is the central thesis. ⸻ 2. Why lower prices could unlock enormous volume Obesity treatment remains constrained by: * insurance coverage and prior authorization; * patient out-of-pocket cost; * manufacturing capacity; * physician adoption; * injection friction; * treatment persistence. Lower prices attack several of these constraints simultaneously. The potential flywheel is: Lower price → better payer economics → broader coverage → lower patient cost → more prescriptions → greater manufacturing scale → more outcome data → broader coverage. Oral obesity drugs could strengthen this further by removing injection friction. Novo therefore may rationally accept lower economics per patient to build a dramatically larger patient base. ⸻ 3. The insurance problem is real Insurers have a legitimate economic problem. They pay for obesity treatment today, while some benefits—fewer cardiovascular events, diabetes complications and other obesity-related diseases—may emerge years later. And the patient may have switched insurers by then. Therefore universal coverage isn’t inevitable simply because GLP-1s work. The payer equation probably needs: lower net prices + strong outcomes data + better patient selection + evidence of nearer-term medical savings. If those pieces develop, obesity treatment can gradually shift from expensive specialty care toward ordinary chronic-disease management. That would dramatically expand the addressable patient population. ⸻ 4. What 10–20 million Novo obesity patients could mean Using the simplified assumptions from our model—roughly DKK209B of non-obesity revenue, 40% operating margin, 22% tax rate, ~4.44B shares and 20× earnings—the economics become interesting. Novo obesity patients Revenue/patient Obesity revenue Approx. value 10M DKK18,000 DKK180B ~$84 10M DKK9,000 DKK90B ~$65 15M DKK14,400 DKK216B ~$92 15M DKK9,000 DKK135B ~$74 20M DKK14,400 DKK288B ~$107 20M DKK9,000 DKK180B ~$84 These are scenarios, not forecasts. But notice the mathematics: Doubling patient volume completely offsets a 50% decline in revenue per patient. That is why patient growth may matter much more than headline pricing. ⸻ 5. Could Novo eventually reach $200? Yes—but $200 requires much more than a Wegovy recovery. At 25× earnings, approximately $200 requires roughly $8 EPS, or around DKK230B of annual net income under our assumptions. That probably requires something like: 25–30M+ obesity patients + a powerful diabetes franchise + oral obesity drugs + next-generation therapies + additional indications + international expansion + strong margins. For illustration: 25M obesity patients × DKK15,000 = DKK375B obesity revenue. Add perhaps DKK250B+ from diabetes and other businesses: ~DKK625B+ total revenue. At ~40% operating margins, that could produce approximately $6.7–6.8 EPS. At 30× earnings: ~$200/share. So $200 is possible, but it is an exceptional execution and patient-scale outcome, not the base case. ⸻ 6. What could kill the thesis? Volume does not automatically save Novo. The thesis fails if: price declines faster than patient volume grows, or Novo loses too much market share to Lilly and future competitors. For example: Price per patient −40% Patient volume +30% Revenue becomes: 0.60 × 1.30 = 0.78 or −22%. The obesity market could therefore boom while Novo disappoints. The real equation is: Novo obesity revenue = total treated patients × Novo market share × revenue per Novo patient. And shareholder value ultimately depends on: Patients × market share × price × margin × valuation multiple. ⸻ 7. The four numbers that matter most I would monitor Novo through four variables: 1. Treated-patient growth. Can obesity pharmacotherapy move from millions toward tens of millions of patients? 2. Novo market share. Can Novo remain a major winner as Lilly and future competitors expand? 3. Revenue per patient. How quickly does realized pricing decline? 4. Incremental margin. Can scale and manufacturing efficiency offset price compression? Quarterly revenue is the output. These four variables are the engine. ⸻ Investment conclusion The strongest Novo thesis isn’t: “Wegovy pricing will remain high.” It is almost the opposite: GLP-1 pricing can fall substantially, but the resulting affordability, reimbursement and access expansion could grow the treated population much faster than revenue per patient declines. If Novo eventually serves 10–20M+ obesity patients, substantial price erosion can coexist with a much larger business. If treatment becomes mainstream chronic care and Novo maintains major market share, the upside becomes much larger still. But if prices collapse while coverage remains restrictive or Lilly takes disproportionate share, the thesis fails. The entire investment ultimately comes down to whether Novo can turn lower obesity-drug prices into patient growth faster than price erosion and market-share loss destroy the economics. Not financial advice, all personal opinions. Long nvo