Novo Nordisk has revised down its annual profit forecasts following lower-than-anticipated sales of its weight-loss drug Wegovy. This has heightened investor concerns about rising competition and led to a decline in its stock price.
Over the past year, the Danish pharmaceutical company’s market value has surged, making it the most valuable company in Europe, driven by the success of its obesity and diabetes treatments, Wegovy and Ozempic. These drugs have gained popularity among high-profile figures such as Elon Musk and Oprah Winfrey. However, Novo Nordisk is now encountering increased competition from Eli Lilly’s rival drugs, Zepbound and Mounjaro.
For the April to June quarter, Wegovy’s sales—part of a new class of weight-loss medications known as GLP-1s that emulate a gut hormone to curb appetite—rose by 55% to 11.66 billion Danish kroner (£1.3 billion), falling short of analysts’ forecast of 13.54 billion kroner.
Sales of Ozempic, a diabetes medication with the same active ingredient as Wegovy, slightly missed expectations, contributing to an overall second-quarter profit that fell short of estimates.
For the full year 2024, Novo Nordisk has revised its operating profit forecast to between 20% and 28%, down from the previous range of 22% to 30%, excluding currency fluctuations. Conversely, it has slightly increased its sales growth estimate to between 22% and 28%, up from the earlier range of 19% to 27%.
Chief Financial Officer Karsten Munk Knudsen attributed the dip in Wegovy sales during the second quarter to adjustments in rebates based on last year’s sales projections, calling it a “quarterly blip.”
Despite a 230% surge in its share price over the past three years, the stock dropped as much as 7.7% in early trading and was down 3.6% later on Wednesday.
The company also noted that the high demand for weight-loss drugs has exceeded its production capacity, leading to the forecast reductions due to “expected, continued periodic supply constraints.”
