Denmark’s Novo Nordisk has cut its annual revenue and profit forecasts after disappointingly “flabby” sales of its weight loss drug Wegovy, as US prescriptions tailed off.
A boom in sales of Wegovy and the diabetes medication Ozempic helped to turn the drugmaker into Europe’s most valuable listed company, worth $615bn (£461bn) at its peak last year.
However, prescriptions in the US, its biggest market, have not grown since February, even though Novo Nordisk increased production of Wegovy to meet demand for the slimming drug. Its market value has halved to about $310bn.
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A slowdown in forecast sales growth is likely to deepen investor concerns that Denmark’s biggest company is losing market share to its US rival Eli Lilly, which makes the diabetes and obesity drugs Mounjaro and Zepbound.
Susannah Streeter, a Hargreaves Lansdown analyst, said Novo Nordisk “looked like a lean profit machine but its sales are turning flabbier as main rival Eli Lily gains more muscle in the space”.
Wegovy was the first of a new wave of anti-obesity drugs – known as GLP-1s after the gut hormone they mimic – to hit the market. Sales of the injectable drug totalled 17.36bn Danish kroner (£1.98bn) between January and March, down by 13% from the previous quarter. This was below the 18.7bn kroner forecast by analysts.
Overall revenues rose by 18%, and pre-tax profits advanced by 16% to 37bn kroner at constant exchange rates in the first quarter, but Novo said it was hit by compounding – medications made by pharmacies using the active ingredients of patented drugs.
This began in the US after the drugs regulator declared shortages of Wegovy, Ozempic and Zepbound, allowing patients to buy compounded products for as little as $199 a month, while the branded drugs cost more than $1,000. The shortage has since eased.
Derren Nathan, the head of equity research at Hargreaves Lansdown, said: “There’s a clampdown on compounders, but question marks remain over its enforcement. The end of the shortage also raises questions about the health of US demand. That’s also reflected in Novo’s deal last week with a US healthcare provider to provide Wegovy to patients at a discounted rate of $499.”
The Danish company expects sales growth of 13% to 21% this year, down from the 16% to 24% range given at the start of the year. Operating profits are expected to rise by 16% to 24%, compared with the previous estimate of a 19% rise to 27%.
Analysts are forecasting that sales and operating profit this year will grow by 17.8% and 21.5% respectively.
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