Novo Nordisk Soars 3%: The Friday Rally That Defied Gravity

Big Pharma's golden child flexes its market muscles again.

Novo Nordisk's stock ripped nearly 3% higher in a single trading session—because when you're printing money with diabetes drugs and weight-loss miracles, gravity's just a suggestion.

The secret sauce? Same old story: blockbuster drugs printing cash while healthcare systems groan under the weight of their invoices. But hey, at least shareholders get their dopamine hit.

Wall Street's latest love affair proves once again that in pharma, the real gains come from patent protection—not medical breakthroughs. Stay bullish on those profit margins.

A rival's hikes

The previous day, U.S. healthcare giantannounced that it was raising the prices of Zepbound -- a GLP-1 obesity drug that directly competes with Wegovy -- in the U.K. In doing so, the company indicated that it will follow suit in other European markets.

Image source: Getty Images.

The move follows a TRUMP administration push to reduce drug prices in America (or, at least, effectively level them across the world). In late July, the president sent letters to the CEOs of top U.S. drug companies, stating that they had until Sept. 29 to reduce the costs of certain medications.

Failure to do so, the president wrote somewhat vaguely, WOULD see the federal government "deploy every tool in our arsenal to protect American families."

Although Novo Nordisk also received one of these letters -- there were 17 in all -- the company hasn't given any concrete indication that it intends to make adjustments similar to Eli Lilly's.

Customer rebellion brewing?

For the moment, then, Novo Nordisk enjoys a bit of an advantage, as there is inevitably customer backlash (and often defection to rival products) when a company hikes prices. We've yet to see how Trump's initiative will fully play out, however. So, personally, I don't think any investor should base their Novo Nordisk stance on the Eli Lilly development.