- First-quarter sales and profit beat
- Full-year outlook lowered
- US competition from copycat drugs
Danish drug maker Novo Nordisk (NOVO-B:CPH) was up 5% despite cutting its full-year outlook and missing first-quarter sales estimates for its blockbuster obesity treatment Wegovy.
The gain might seem surprising but should be seen against the extreme negative sentiment surrounding the shares, which have halved over the last year, suggesting the weak outlook was largely anticipated by the market.
Also weighing on the shares have been a string of disappointing drug trials for Novo’s next generation obesity drug CagriSema. Novo confirmed it expects to file for the first regulatory approval of the drug in the first quarter of 2026.
FIRST QUARTER BEAT
On the bright side, Novo delivered first-quarter net sales growth of 18% and operating profit up 20%, around 4% ahead of consensus expectations, according to LSEG data.
Sales of its popular weight-loss treatment Wegovy increased 83% year-on-year to DKK 17.4 billion (£2 billion), slightly below the DKK 18.3 billion analysts expected.
Conversely, sales of diabetes treatment Ozempic came in ahead of forecasts at DKK 32.7 billion versus DKK 31.5 billion.
PESKY COMPOUNDERS
Since Novo’s Wegovy and rival Eli Lilly’s (LLY:NYSE) Zepbound were launched in the US, surging demand has been running ahead of supply, and under these conditions the US regulator allows third parties to step in to manufacture cheaper copycat versions of the drugs, called compounders.
Although Wegovy is now not officially in short supply according to the FDA (Food and Drug Administration), the popularity of cheap compounders is influencing demand.
Novo CEO Lars Fruergaard Jørgensen explained: ‘In the first quarter of 2025, we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments.
‘However, we have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US.
‘We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments,’ added Jørgensen.
Consequently, the company lowered full-year sales growth guidance to a range of 13% to 21% from 16% to 24% and operating profit growth is now forecast to be between 16% to 24%, down from 19% to 27% previously.
