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Novo Nordisk raised its profit outlook for the year as strong sales of its hugely popular diabetes and weight loss drugs Ozempic and Wegovy continued to drive strong profits.
The Danish pharmaceutical company reported better-than-expected quarterly sales of DKr65 billion (US$9.3 billion), up 24 percent year-on-year at constant exchange rates, while net profit rose 28 percent to DKr25 billion rise.
The drugmaker now expects revenue to grow between 19 and 27 percent in 2024, while operating profit is expected to rise from a cap of 29 percent to up to 30 percent.
Novo Nordisk has invested heavily in production capacity to meet the rapid demand for Wegovy and Ozempic. The company said it faces “ongoing periodic supply shortages” but began increasing the supply of doses for new Wegovy patients in January after scaling back the release of starter doses in May due to supply shortages.
The company said it is now adding more than 25,000 new patients per week to Wegovy in the United States. Lars Fruergaard Jørgensen, chief executive, said the pace was approaching “last year’s peak”.
However, Novo Nordisk said higher sales volumes and competition between rival pharmaceutical companies had driven down the price of the popular drug, resulting in lower revenue for Wegovy than analysts had expected. Diabetes sales offset this decline and contributed to the group achieving above-forecast sales.
Despite the raised forecast, the company’s shares fell 2.8 percent at the stock market open in Copenhagen on Thursday after Wegovy sales came in lower than expected.
Karsten Munk Knudsen, chief financial officer, said: “As volumes grow, we move into more channels and competition enters the market, prices are expected to fall.”
According to a Food and Drug Administration database that tracks drug shortages, lower doses of Wegovy are currently in limited supply, but higher doses and Ozempic injections are readily available.
Price pressure is likely to continue after Senator Bernie Sanders last week launched a US Senate investigation into “outrageously high prices” of his drugs in the country. Wegovy’s list price in the US is $1,349, 14 times higher than the UK price, Sanders noted.
Meanwhile, Novo Nordisk faced competition from rivals including Eli Lilly, maker of the drugs Mounjaro and Zepbound, which reported strong sales growth on Wednesday.
However, Novo Nordisk holds more than half of the global market for GLP-1 treatments such as Wegovy and Ozempic and an 85 percent global market share in obesity treatment, according to figures from data provider IQVIA cited by the company.
Jørgensen said there was little evidence of patients switching to other medications as the company faced increasing competition. “The number of patients seeking care is so large that we hardly see any turnover.”
High demand for its drug has made Novo Nordisk Europe’s most valuable company, with shares rising nearly 30 percent this year and its value rising to $573 billion.