By Maggie Fick and Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) – Novo Nordisk (NYSE:) reported better forecast third-quarter sales of its popular Wegovy weight loss drug on Wednesday, reassuring investors that demand would slow and it would slow the race in the fast-growing obesity drug may lose market.
Shares of Novo Nordisk, which competes with Eli Lilly (NYSE:) in an obesity drug market that some analysts predict could be worth as much as $150 billion by the early 2030s, rose nearly 9% .
They reversed course later in the day, when company management told investors that sales growth next year could be in the high teens on a percentage basis, below the 21% growth forecast by analysts.
Shares rose 1.1% at 1525 GMT.
Wegovy’s third-quarter revenue totaled 17.3 billion Danish krone ($2.5 billion), above the 15.9 billion analysts expected in a company-compiled consensus and up 48% from of the previous quarter.
The Danish drugmaker said Wegovy production has tripled in the past three years and will continue to increase at the same pace.
“We still have a situation where there are many more patients who would like to have the treatment than what both Eli Lilly and we can provide,” CEO Lars Fruergaard Jorgensen told Reuters.
But the group’s total sales, which rose 21% to 71.3 billion crowns, fell below the 72.3 billion crowns expected by analysts due to weaker-than-expected sales of Ozempic diabetes drugs.
Novo said U.S. sales growth was hurt by the phaseout of rebates — volume-based rebates negotiated by pharmaceutical companies with U.S. pharmacy benefits — in 2023.
Investors were worried the drugmaker would cut its outlook on Wednesday, so the third-quarter results came as something of a relief, said Terence McManus, fund manager at Switzerland’s Bellevue Asset Management, which owns Novo shares.
“However, we don’t see these results as a completely clear signal for the shares,” he said.
The company will release data before the end of this year from a late-stage trial of CagriSema, a two-drug combination for the treatment of obesity that is injected like Wegovy.
Novo expects CagriSema to lead to a 25% weight loss, compared to Wegovy’s 15%, a result that analysts say is a must-win for Novo’s investment scenario to tackle obesity.
Wegovy’s sales decline was a relief, although price pressure in the United States was slightly worse than expected, analysts said.
Investors were nervous ahead of results after US rival Eli Lilly announced results for its weight-loss drug Zepbound last week that fell short of expectations.
“Following Eli Lilly’s sobering third quarter numbers, it appears investors are growing hopeful for both leading obesity players,” said Alexander Jenke, portfolio manager at Medical (TASE:) Strategy in Munich, told Reuters.
Wegovy and Zepbound are part of a class of drugs that mimic a gut hormone called GLP-1, either alone or in combination with compounds that target a second hormone to create a feeling of fullness and curb appetite. reduce.
Novo’s leading position in anti-obesity drugs, combined with ferocious demand outpacing supply, helped Novo become Europe’s largest company by market capitalization last year. It is now worth $489 billion, but has lost 28% of its value since its peak in June.
OUTLOOK
Jorgensen said the company has lifted restrictions on Wegovy prescriptions in the United States, and that the slower pace of weekly U.S. prescriptions in recent months was due to lower starting doses being brought to market.
“There are different periods where you can say the market is stagnating, but that’s not because of stagnant demand, it’s just because of supply in the market,” he said.
Novo has now launched Wegovy in at least 16 countries, but declined to name the additional countries since August, when the company said it was in 12 countries.
The drugmaker said it now expects sales growth this year of between 23% and 27% in local currencies, compared to the previously stated range of 22% to 28% growth.
The outlook reflected continued price pressure on its obesity and diabetes drugs and the cost of investing in expanding production of its existing drugs and in the pipeline of next-generation anti-obesity drugs, the report said.
Operating profit growth this year is now estimated at between 21% and 27% in local currency, compared to the previous forecast of 20% to 28%.
($1 = 6.9430 Danish Krone)
