Caixin News Agency, August 7th (Editor Zhou Ziyi) - Danish pharmaceutical giant Novo Nordisk's star weight loss drug Wegovy's quarterly sales were lower than expected, causing concerns among investors who believe that Novo Nordisk's first mover advantage in the weight loss drug market is facing risks, and the company will also face more intense competition.
Novo Nordisk announced its second quarter results on Wednesday, August 7th. Both operating profit and net profit were lower than expected, and the company also lowered its annual operating profit forecast.
Calculated at a fixed exchange rate, its operating profit increased by 8% to 25.9 billion Danish kroner (equivalent to 3.8 billion US dollars) in the three months ending June, falling short of analysts' forecast of 27.3 billion Danish kroner; The net profit is 20.05 billion Danish kroner (equivalent to 2.93 billion US dollars), while the median analyst forecast is 20.9 billion Danish kroner.
Among them, Novo Nordisk's weight loss drug Wegovy saw a 53% increase in sales in the second quarter, reaching 11.66 billion kronor, far below the consensus expectation of 13.54 billion kronor summarized by analysts, but still higher than the 9.4 billion kronor in the first quarter.
On Wednesday (August 7th), Novo Nordisk's stock listed in Copenhagen experienced a cliff like decline, dropping nearly 7% at one point before recovering some of its losses. As of press time, it has fallen 4.84%.
Adjust the annual forecast
This report card shows a decline compared to Novo Nordisk's performance in the first quarter of this year in May. The company's net profit in the first quarter increased by 28% year-on-year, reaching 25.4 billion Danish kroner, and the company also slightly raised its forecast for sales and operating profit growth at that time.
On Wednesday, Novo Nordisk once again raised its full year sales growth forecast. Calculated at a fixed exchange rate, the currently released full year sales growth forecast for 2024 is 22% to 28%, compared to the previous sales growth forecast of 19% to 27%.
However, the company has recently lowered its operating profit forecast for 2024, stating that it currently expects a growth rate between 20% and 28%, instead of the previously expected range of 22% to 30%.
Regarding this, Novo Nordisk pointed out that due to the company's ongoing expansion of manufacturing capabilities, related costs have affected the quarterly profits. The company is spending a huge amount of money to increase Wegovy's production to meet the growing demand and compete with Eli Lilly. Lilly launched Wegovy's competitor, Zepbound, in the United States in December last year.
Greater competitive pressure
Since Novo Nordisk first launched Wegovy in the United States in June 2021, the company's stock price has risen by about 230%. However, since hitting a high in June this year, its stock price has fallen by 21%.
At present, Novo Nordisk is facing increasingly fierce competition in the field of weight loss drugs, including pressure from small companies and competition from pharmaceutical giants such as Eli Lilly and Roche. Novo Nordisk's first mover advantage in the rapidly growing obesity drug market is facing risks.
Last month, Roche released early trial data for its candidate weight loss drug CT-996. Experimental data shows that obese patients lost an average of 6.1% in weight after taking CT-996 tablets for 4 weeks. Based on new data, the market is optimistic about Roche's prospects, which is a major warning signal for Novo Nordisk.
Fortunately, in recent months, Novo Nordisk's weight loss drug Wegovy has also received encouraging news. The drug was approved in China in the second quarter of this year, opening the door to sales in the world's second-largest economy; The healthcare regulatory agencies in the UK and EU have also expressed their support for Wegovy, believing that it can reduce the risk of severe heart disease in overweight and obese adults.