Terry Smith dubs weight-loss giant Novo Nordisk ‘investment disaster’
Star stockpicker Terry Smith has dubbed weight-loss giant Novo Nordisk an “investment disaster” less than two years after he dumped his entire Diageo stake over fears that GLP-1 users would ditch alcohol.
The veteran investment manager, who runs the Fundsmith Equity fund, has said that he regrets his investment in the Danish pharmaceutical firm.
“Novo Nordisk parlayed a market leading position in the biggest drug discovery in decades into an investment disaster,” he wrote in his semi-annual letter to shareholders.
The fund manager had thrown his weight behind weight-loss drugs less than two years ago, when he sold off his entire stake in Guinness and Johnnie Walker owner Diageo in January 2025.
Smith told shareholders that he was concerned that the alcoholic drinks sector was “in the early stages of being impacted negatively by weight loss drugs”.
Novo Nordisk faces intense rivalry
“Indeed, it seems likely that the drugs will eventually be used to treat alcoholism such is their effect on consumption,” he had said.
But Smith has confirmed that his fund is selling off its stake in the Wegovy and Ozempic maker, reversing his bet on weight-loss drugs.
Novo Nordisk became Europe’s most valuable company after it kickstarted the weight-loss boom but the firm has more recently struggled to keep up with the rapid growth of its competitors, including US-based Eli Lilly.
In February, the pharma giant’s shares shed more than a sixth of their value after trials of its new obesity shot, CagriSema, fell short of expectations.
Unilever ‘misled’ shareholders
Smith’s letter to shareholders also detailed his reasons for selling off his entire stake in consumer goods giant Unilever.
The fund manager claimed that he had been misled by the firm ahead of its decision to sell off its food business to US spice maker McCormick in a $45bn deal.
“Apart from the fact that this flies in the face of what we were told and what we liked about [former chief executive] Hein Schumacher’s approach, it has all the hallmarks of Nelson Peltz, the activist investor who is on the board,” he wrote.
Smith said he and his shareholders are not “fans of boards who listen to activists who are not long-term investors” and criticised Unilever for not offering investors a vote on the deal.
A Unilever spokesperson said: “This transaction enables a growth-led separation of Foods at an attractive valuation, creating two stronger businesses, both positioned to win in their categories.
“It was a unanimous decision by the Board and under the UK rules, it was the Board’s responsibility to approve the transaction and conclude that it is in the best interests of the company and its shareholders.”
Novo Nordisk declined to comment.