Novo Nordisk, which became Europe’s most valuable company last year thanks to the success of its weight-loss drugs, posted better-than-expected first-quarter financial results on Thursday as demand for the drugs surged, CNBC reports. The Danish pharmaceutical giant reported net profit rose 28% year-on-year to 25.4 billion Danish kroner, or $3.65 billion, topping a consensus forecast in an LSEG survey of 23, 7 billion crowns.
Sales of the slimming drug Wegovy doubled to 9.38 billion kroner.
Total North American sales rose 35% as the company reported Wegovy was approved in the US in the first quarter for reducing cardiovascular risk in people with obesity. Wegovy fills 130,000 weekly prescriptions in the US, with more than 25,000 people starting to use the brand per week during the quarter, the results showed.
“We are pleased with the increase in sales in the first three months of 2024, driven by higher demand for our GLP-1-based diabetes and obesity treatments,” CEO Lars Fruergaard Jørgensen said in a statement.
Novo Nordisk upgraded its 2024 forecast by one percentage point to a range of 19% to 27% at constant exchange rates.
It also raised its operating growth forecast to 22% to 30% from a previous forecast of 21% to 29%
The upgrade refers to a one-time adjustment to the previous year’s net growth estimates in the US, said Chief Financial Officer Karsten Munk Knudsen.
Knudsen said the drugmaker saw “very good volume growth” in Wegovy sales, which offset lower prices in North America.
Prices are expected to fall further as volumes and competition increase, he added.
In a note on Thursday, UBS analysts signaled a lack of consensus on obesity drug sales and said overall sales only slightly beat estimates, driven by gross-to-net sales adjustments. “They increased their annual guidelines a little, which is fine. Indeed, there is no expectation other than continued growth and substantial growth,” said John Rountree, managing partner at pharmaceutical consulting company Novasecta.
Novo Nordisk faces competition in the weight loss treatment market from the US company Eli Lilly and a range of large and smaller firms looking to enter the market. Eli Lilly also upgraded its full-year estimates this week.
Jørgensen said on Thursday’s call that the company doesn’t see many examples of patients who start using Wegovy and switch to a rival drug.
Recent positive test data for Novo Nordisk’s new experimental diet pill further boosted the company’s market value last month.
The company was also supported by recent research findings. An investigation by European Union regulators earlier this month found no link between an increased risk of suicidal thoughts and self-harm with taking Wegovy or Novo Nordisk’s diabetes drug Ozempic. Novo Nordisk announced separately Thursday that Wegovy will be available to some Canadians starting this month. Novo Nordisk shares have risen 59% in the past year.
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