This is the latest installment in a new series where BioPharma Dive uses data visualization to recap what’s going on across the industry. Today, we’re looking at the massive plunge in obesity drugmaker Novo’s share price over the last two years and a string of venture capital “megarounds” secured by AI drug discovery startups.
Two years ago, Novo saw its market value swell to record highs. Ozempic and Wegovy, its GLP-1 drugs for diabetes and obesity, became so popular that Novo couldn’t keep up with demand. Its stock in June 2024 accordingly changed hands at more than $140.
The Danish drugmaker has suffered a dramatic collapse ever since. Drug compounders and rival branded medicines from Eli Lilly eroded Novo’s market share. Pricing pressure in the U.S. threatened the company’s profit margins. Multiple top prospects disappointed in clinical testing. And key patents protecting its GLP-1 medicines will soon expire, raising questions about the company’s future.
Novo held a “capital markets day” earlier this week in an attempt to convince investors that better days are ahead. Executives pitched plans to launch at least five “multi-blockbusters” by 2030 and hit $23 billion in yearly peak sales five years later.
Yet, at least for now, Wall Street isn’t buying into Novo’s turnaround. Shares fell another 8% following the presentation and, as of Friday morning, were trading at around $38 apiece.
Novo’s “doubling down on obesity is likely to keep investors on the sidelines until near-term dynamics become clearer,” Jefferies analyst Michael Leuchten wrote in a Monday client note.
Novo's stock soared with GLP-1 craze, but dropped significantly since peaking
Venture funding totals have rebounded for biotechnology companies since bottoming out during the sector’s downturn. One reason why is the fundraising success for startups using artificial intelligence to find new drugs.
AI drug discovery startups Isomorphic Labs and Chai Discovery nabbed two of the three largest funding rounds this year involving the investors tracked by BioPharma Dive. And, since the start of 2024, At least a dozen such firms have raised a venture round worth $100 million or more. Isomorphic’s $2.1 billion haul is, by far, the largest.
“AI is still driving the conversation, but it looks like most of it has moved past wild promises and enthusiastic claims,” Megan Scheffel, head of life science and healthcare at Silicon Valley Bank, wrote in a mid-year sector report. The “promise of AI drug design and protein modeling is drawing staggering amounts of money.”
That trend continued this week. On Wednesday Enveda, a Colorado drugmaker using AI to mine plants for potential medicines, raised $311 million in a Series E round. Another AI-focused startup, Basecamp Research, banked $140 million.
Those big hauls have come even with drug prospects in the early stages of development. Enveda has three AI-aided drug candidates in clinical trials, while Basecamp has multiple genetic medicines and peptides in preclinical testing. Earendil Labs, which recently brought in one of the largest financings of any AI biotech since 2024, has in Phase 1 testing a biologic for inflammatory bowel disease.
