Forecast-busting Wegovy sales ease pressure on Novo Nordisk

Sales of Wegovy, the weight-loss jab, have beaten expectations, triggering a rally in shares of Novo Nordisk, the Danish drugs company behind the obesity treatment.
Wegovy sales rose to 17.3 billion Danish krone (£1.96 billion) in the third quarter, compared with 9.6 billion krone a year earlier and ahead of analysts’ forecasts. Revenue from the company’s diabetes drug Ozempic increased 26 per cent year-on-year at constant exchange rates to 29.8 billion krone.
Novo Nordisk has been grappling with demand outstripping supply since the launch of Wegovy in 2021 as well as political pressure in Washington to cut prices. Those pressures, the costs of increasing production and competition from Eli Lilly, the world’s biggest pharmaceuticals company, led shares in Novo Nordisk to retreat from record highs that made it Europe’s most valuable public company last year.
Eli Lilly disappointed Wall Street expectations last week when it announced third-quarter results, citing higher manufacturing costs and a fluctuation in wholesaler levels for Zepbound, its rival anti-obesity treatment, prompting a sell-off in its shares in New York.
With Wegovy sales beating expectations and Novo Nordisk narrowing its annual forecasts, its shares rose about 9 per cent in Copenhagen, before falling back to close up 4 krone, or 0.6 per cent, at 749½ krone.
Novo Nordisk and Eli Lilly are leading the booming weight-loss market, which some analysts have estimated could be worth up to about $150 billion by the start of the next decade. The breakthrough, after years of setbacks because of side-effects and disappointing weight-loss levels, has come through so-called GLP-1 therapies, or glucagon-like peptide-1 receptor agonists, that target receptors in the gastrointestinal tract to make patients feel less hungry.
Lars Fruergaard Jorgensen, Novo’s chief executive, said: “We are pleased with the performance in the first nine months of 2024. The sales growth is driven by increasing demand for our GLP-1-based diabetes and obesity treatments, and we are serving more patients than ever before.”
Jorgensen, who faced a grilling by the American Senate in September over high prices, said there continued to be more patients than both Novo Nordisk and Eli Lilly can supply, despite his company tripling Wegovy production over the last three years. It expects to continue to increase production at a similar rate.
In February, Novo Nordisk agreed to buy three factories for $11 billion from Catalent, the American contract drug manufacturer. Jorgensen confirmed that the deal was expected to complete this year. He said curbs on Wegovy prescriptions would be lifted in America and attributed a slowdown in prescriptions to lower starter doses being supplied into the market.
The high demand has meant that pharmacies have issued compounded copies of the branded drugs, which has concerned pharma bosses. Novo Nordisk said it was aware of ten deaths and 100 hospital admissions as a result.
As well as a focus on boosting supplies and expanding internationally, including in the UK where Wegovy was introduced in September last year via a “controlled and limited” launch, Novo Nordisk is developing next-generation products as other pharmaceutical companies, including AstraZeneca, seek to catch up.
Data from a late-stage, phase III trial of CagriSema, a two-drug combination injectable treatment, is expected by the end of this year. The side-effects in trials so far are similar to the company’s existing GLP-1 drugs and CagriSema is expected to deliver an improved weight loss of up to 25 per cent, compared with 15 per cent for Wegovy.
Analysts at Quilter Cheviot said Novo Nordisk’s sales success in the third quarter was “largely driven by performance outside the US where it has now been launched in more than 15 countries, and it benefited from stocking ahead of launch in a number of markets”.
Novo Nordisk expects sales growth of between 23 per cent and 27 per cent this year, compared with an earlier range of 22 per cent to 28 per cent.