Novo Nordisk’s total revenue in the third quarter missed analysts’ expectations but sales of weight loss drug Wegovy exceeded the consensus forecast. Still, the Danish drugmaker narrowed its full-year guidance for revenue and operating profit.
Novo Nordisk on Wednesday reported a third-quarter beat for sales of blockbuster Wegovy, signaling to investors that the company has not yet ceded its frontrunner status in the obesity market to rival Eli Lilly.
Wegovy sales jumped 79% year-on-year in Q3 bringing in $2.5 billion, which beat the consensus estimate of approximately $2.3 billion by 9%. Novo’s total obesity care business generated more than $2.7 billion in the quarter—growing 53% from the same period last year and topping the analyst forecast by 6%—despite Saxenda’s 16% miss.
Type 2 diabetes medication Ozempic secured nearly $4.29 billion in Q3, which fell 3% short of the consensus forecast of $4.41 billion. Novo’s overall revenue in the quarter, which jumped 21% year-over-year to $10.26 billion, also missed analysts’ consensus projection of $10.41 billion.
In a note to investors, BMO Capital Markets analyst Evan Seigerman called Wegovy’s Q3 beat “a surprise positive” for Novo, driven mainly by “new international market launches.” Seigerman pointed out that the pharma’s insulin franchise, particularly its rapid-acting NovoRapid, also contributed substantially to its strong performance in the quarter.
Jefferies analyst Peter Welford described Novo’s Q3 results as “robust” and which “may be seen as a relief given recent stock weakness.” However, the company’s stock price was down in Wednesday morning trading.
Seigerman said the Ozempic miss points to continued supply problems, particularly in the U.S. where “manufacturing will remain the number one issue” for Novo and its shareholders. “We expect investors will be keen to understand how Novo can eliminate any constraints to Ozempic, which appeared to weigh on sales for the quarter.”
Looking ahead, Novo on Wednesday narrowed its growth guidance for 2024. The pharma now expects its sales to increase by 23% to 27%, compared to its previously announced range of 22% to 28%. Operating profit is anticipated to grow from 21% to 27% versus its prior guidance of 20% to 28%. Welford in his note said that this adjustment was “anticipated,” noting that this more precise outlook “still assumes continued periodic GLP-1 supply constraints.”
Novo’s Q3 beat for Wegovy comes just days after the FDA removed all doses of the obesity drug—and Ozempic—from its drug shortages database, indicating that these medications should now be freely available. In an interview with Reuters, CEO Lars Fruergaard Jørgensen said that the company will now start removing its restrictions on the lower doses of Wegovy.
Still, the regulator’s webpage lists semaglutide—the active ingredient in Ozempic and Wegovy— as “currently in shortage,” which keeps the opportunity open for compounding pharmacies to produce their remixed versions of the GLP-1 receptor agonist.
Novo has taken a strong stance against this practice, however, filing a barrage of lawsuits in June 2023 against clinics and spas that sell compounded semaglutide. The pharma succeeded in securing a permanent injunction against one such establishment in February 2024. Last month, the company also asked the FDA to declare semaglutide too complicated to compound, a regulatory determination that would prevent the drug from being compounded even in times of shortage.
On Wednesday’s analyst call, Jørgensen said that “our first and foremost concern about compounding is really about the product quality,” noting that the safety reports regarding these remixed drugs have been “alarming” including 10 deaths and 100 hospitalizations.
“We have been in dialogue with the FDA based on our increasing supply to the U.S. of Wegovy, including supply of the starter doses,” Jørgensen said, adding that the company is aiming to remove the drug shortage notification for semaglutide, which would limit compounders.
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