How Do I Buy Ozempic Stock?

Ozempic is one of the hottest new pharmaceuticals the market has produced in years. Originally a treatment for type-2 diabetes, Ozempic shot to worldwide prominence when it was discovered that the drug could meaningfully reduce body weight in overweight and obese patients.

Since then, Ozempic and a labeled weight-loss drug made by the same company called Wegovy have become go-to options for treating obesity.

Aside from the enormous positive health implications of Ozempic, the development of effective anti-obesity drugs has created an entirely new market opportunity for investors. Nearly 40% of the global population currently suffers from obesity, a number that is expected to grow to 50% by 2035.

The economic benefits of treating this epidemic are likely to be huge, and the companies that manage it are apt to become extremely valuable. So can you get a piece of the pie by buying the stock?

How Do I Buy Ozempic Stock?

You cannot buy Ozempic stock but you can buy shares of Novo Nordisk (NYSE:NVO), the Danish pharmaceutical giant that makes the drug.

Because Novo Nordisk trades publicly on the New York Stock Exchange, the stock can be purchased through any standard brokerage account. Investors can buy NVO shares during market hours on open trading days.

Keep in mind that while Ozempic has become the company’s top-selling drug, it is far from the only one. Novo Nordisk has been in business since 1923 and has been responsible for the creation of many other pharmaceuticals.

Among the company’s other top-selling products are a variety of insulin treatments for diabetes.

Is Novo Nordisk Worth Buying?

Due to Ozempic’s extreme success, NVO shares have skyrocketed by 38.7% in the last year. This opens up the question of whether the stock is still priced attractively for new investors.

At first glance, Novo Nordisk appears to be trading at quite a premium. The stock’s forward price-to-earnings ratio is 40.8x, while its price-to-sales ratio is 16.9x.

Although these ratios certainly require Novo Nordisk to achieve very high levels of growth, they may not necessarily count the stock out altogether. The price-to-earnings-growth ratio, a popular metric for valuing fast-growing companies, is 1.4x.

Though a PEG of 1 or under is usually seen as most desirable, this ratio suggests that Novo Nordisk’s high pricing could be more or less in line with its earnings growth potential.

Over the next 3-5 years, the company’s earnings growth is expected to remain high at about 19.2% annually. Taking this into account, the high P/E ratio NVO shares trade at may well be justified.

Another mitigating factor in Novo Nordisk’s valuation is its strong profitability. Over the last 12 months, the company has achieved a net margin of 34.9% and a return on equity of 87.4%.

While the ROE has been skewed significantly higher by a major new share buyback initiative, these figures suggest that the company’s ability to generate profits from mushrooming sales may be worth a premium price tag.

Taking all of this into account, Novo Nordisk still probably isn’t significantly undervalued. The view that it is fairly value is somewhat supported by the median analyst price target for NVO of about $148, representing a gain of approximately 16.5% from the most recent price of $126.95.

Given that the S&P 500 is expected to continue posting strong gains over the next few years amid continued earnings growth, this would likely put NVO moving upward roughly in tandem with the broader market.

Can Ozempic Stand Up to Competitors?

Another part of the investment equation around Novo Nordisk right now is the question of how well Ozempic will fare against competitive obesity drugs.

When Ozempic came out, it was the first drug of its kind. Since then, however, other pharmaceutical majors have entered the market with their own anti-obesity drugs.

Of particular note is Zepbound, made by Eli Lily. Studies have shown that this drug produces even more rapid weight loss than Ozempic.

Additional competition is also likely to come from pharmaceutical startups hoping to grab a piece of the lucrative weight-loss drug market. Viking Pharmaceuticals, for instance, is currently testing its own obesity treatment in a pill format. As time goes on, it’s likely that other pharmaceutical companies will jump in with their own Ozempic alternatives.

The good news for Novo Nordisk is that demand for these drugs currently dwarfs the available supply. Demand for weight-loss medications is so steep that many consumers are even turning to compounding pharmacies for alternatives. These market dynamics are likely to leave Novo Nordisk ample room for growth even as competitors stake out their own shares of the market.

Will Government Pressure Prices?

A final piece of the current picture around Ozempic and Novo Nordisk investors should be aware of is a recent Senate hearing in which lawmakers pressured CEO Lars Jørgensen to bring down the drug’s price.

During the hearing, the idea of generic Ozempic alternatives being sold for as little as $100 per month was brought up.

With Ozempic starting at over $700 per injection pen, government support for generics has the very real potential to create a downward price spiral that would stifle Novo Nordisk’s growth.

Is NVO a Buy?

Even with risks stemming from government pressure and a premium stock price, NVO appears to be a decent buy in today’s market.

As the leading weight-loss drug producer, Novo sits at the center of a market with an incredibly long growth runway. By 2030, analysts at Morgan Stanley believe that the obesity drug market could expand by as much as 15 times.

While competitors will naturally capture a good amount of this growth, Novo Nordisk’s first-mover advantage in this space will likely allow it to benefit from these enormous growth tailwinds.

Buying NVO now may allow investors to take advantage of long-term growth in a market that effectively didn’t exist two years ago.

With such a large share of the world’s population suffering from the ill effects of obesity, it’s unlikely that Novo Nordisk or its competitors will run out of customers for these valuable drugs anytime soon.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.