By Maggie Fick
LONDON (Reuters) -Novo Nordisk on Wednesday trimmed its full-year revenue outlook after reporting weaker-than-expected quarterly gross sales of its widespread weight-loss drug Wegovy, stirring worries amongst buyers about stiffening competitors from Eli Lilly (NYSE:).
The outcomes finish a chronic streak of constructive earnings information from the primary mover within the weight problems drug race which has seen its worth surge to greater than $500 billion, making it Europe’s Most worthy listed firm.
Novo shares, which have soared some 230% since June 2021, fell as a lot as 7.7% in early buying and selling and had been down 4.6% at 1203 GMT, placing them among the many largest fallers on the broader and within reach of their February lows.
Chief Monetary Officer Karsten Munk Knudsen in an interview referred to as the market response unsurprising, given the market’s sensitivity to Novo’s mega-blockbuster drug Wegovy.
Second-quarter revenue additionally missed expectations, doubtlessly deepening investor worries that Novo’s dominance within the fast-growing weight problems drug market – which some forecast might be value about $150 billion by the early 2030s – is in danger because it races to develop capability to fulfill runaway demand.
The comfortable second-quarter outcomes are “in sharp distinction to the huge gross sales and earnings beats we’ve got seen final 12 months”, stated Markus Manns, a portfolio supervisor at Novo shareholder Union Funding in Germany.
CEO Lars Fruergaard Jorgensen downplayed issues over competitors from U.S. rival Lilly in a name with journalists, saying that he didn’t see these dynamics having a huge impact on gross sales within the foreseeable future.
CFO Knudsen stated U.S. costs of Wegovy had been decrease this 12 months attributable to quite a lot of anticipated components together with worth concessions to get insurance coverage entry in numerous channels, and the doorway of a competitor.
Novo additionally stated it should proceed limiting provides of the bottom or starter dose of Wegovy to the U.S. market to make sure sufferers who begin therapy can proceed.
Second-quarter gross sales had been additionally knocked by higher-than-expected rebates, or worth concessions to U.S. pharmacy profit managers. CFO Knudsen stated it was a “quarterly blip”.
The Danish firm reduce its working revenue development forecast this 12 months to between 20% and 28% in native currencies from 22% to 30% beforehand.
Working revenue within the quarter rose 8% at fixed change charges to 25.9 billion Danish crowns ($3.8 billion) in contrast with the 27.3 billion crowns forecast by analysts in a LSEG ballot.
Gross sales of Wegovy, Novo’s first-to-market weight-loss drug, rose 53% to 11.66 billion crowns, nicely under the 13.54 billion crowns anticipated by analysts, whereas gross sales of Ozempic, a diabetes drug with the identical lively ingredient, additionally simply missed expectations.
Novo ended a sophisticated kidney illness trial in June, leading to a 5.7 billion Danish crown impairment loss which it stated impacted working revenue.
ALL EYES ON SUPPLY
However, Novo raised its gross sales development outlook for this 12 months to between 22% and 28% in native currencies from 19% to 27% beforehand.
Jorgensen stated on the media name that the improve confirmed Novo is snug in its capability to additional ramp up provide, with out giving particulars.
Analysts from Barclays and Citi each stated that though the second-quarter numbers had been weaker than anticipated, Novo’s statements on boosting Wegovy manufacturing had been reassuring.
Novo is spending billions of {dollars} to elevate Wegovy manufacturing to fulfill runaway demand and fend off Lilly, which launched its rival remedy Zepbound within the U.S. final December.
Although Novo and Lilly at the moment are going head-to-head with weight problems therapies in plenty of markets together with Britain and Germany, probably the most profitable one by far is the U.S., the place greater than 70% of adults are overweight or chubby.
The bottom of 5 dose strengths of Wegovy continues to be in scarcity, in line with the U.S. Meals and Drug Administration web site, which was up to date late on Tuesday to indicate two extra dose strengths had been now obtainable.
On Friday, the FDA up to date its web site to say Lilly’s Zepbound was obtainable, but it surely didn’t take away the drug from its scarcity listing. It stated in a press release it was working with Lilly to verify provides had been steady.
Lilly will launch quarterly numbers on Thursday.
Novo stated it had withdrawn its submission to U.S. and European regulators for approval of Wegovy to deal with coronary heart failure and kidney illness, and plans to resubmit with extra information in the beginning of 2025.
($1 = 6.8397 Danish crowns)
