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Novo Nordisk’s stock price has seen a significant uptick in 2023, surging over 40% largely due to the success of its diabetes drugs, Ozempic and Wegovy. These two medications have propelled a 44% year-over-year sales increase in the first half of 2023, cementing Novo Nordisk’s leading position in the diabetes and obesity markets.
Historically, the company’s previous stock splits have had minimal immediate impact on the share price. The first split was a 4-for-1 action on April 18, 1994, followed by a 5-for-2 split on April 11, 2001. Both instances saw modest gains in the weeks following each split. The third split was a 2-for-1 action on December 17, 2007, with no significant immediate effect on the share price. A more recent split, a 5-for-1 division on January 9, 2014, resulted in an increase in share price before the split but some of these gains were lost post-split.
The logic behind stock splits is that by lowering the share price, more investors will be able to afford it and their subsequent buying will help drive the stock higher. However, with Novo’s ADR share price currently below $200 – an affordable entry point for many investors – the upcoming split is unlikely to significantly increase the investor base.
Looking forward, Novo Nordisk’s future trajectory appears promising. The company plans to continue capitalizing on the momentum of Ozempic and Wegovy, with oral versions of semaglutide, the active ingredient in both drugs, in development for treating type 2 diabetes and enabling weight loss. The company is also exploring the use of the drug for nonalcoholic steatohepatitis (NASH), a serious chronic liver disease.
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