Novo Nordisk in Denmark has cut its annual revenue and profit projections due to a slowdown in Wegovy sales, a weight loss medication, as prescriptions in the US have declined.
The success of Wegovy, along with booming sales of diabetes drugs, elevated these companies to the status of Europe’s most valuable publicly traded firms, reaching a peak of $615 billion (£461 billion) last year.
However, the company’s largest market, US prescriptions, have stagnated since February. This comes despite increased production of Wegovy, reflecting a growing demand for weight-loss drugs. Currently, its market value stands at around $300 billion.
Concerns are rising among investors, especially given the loss of market share to Eli Lilly, Novo Nordisk’s main competitor. This shift could potentially exacerbate worries regarding the future of diabetes and obesity medications.
Analyst Susannah Streeter from Hargreaves Lansdown remarked that Novo Nordisk “felt like a lean profit machine,” but the situation has changed as Eli Lilly gains traction in the market.
Wegovy was among the first of the new class of anti-obesity drugs, known as GLP-1 medications. Sales for injectable versions dropped 13% from the prior quarter, totaling 173.6 billion Danish kroner (£19.8 billion) between January and March, which was below analyst expectations of 18.7 billion kroner.
Despite this, overall revenues increased by 18%, with pre-tax profits moving from 16% to 37 billion kroner at a constant exchange rate in the first quarter. However, Novo was affected by competition from pharmacies offering alternative therapies using active ingredients from patented drugs.
This trend began in the US, following drug regulators’ announcements of shortages involving Wegovy, Ozempic, and Zepbound, leading patients to opt for a combined product priced at just $199 a month, as opposed to over $1,000 for the branded versions. The shortages have since started to ease.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown, expressed cautious optimism: “While Comersner will be close, questions remain regarding its enforcement. The resolution of shortages also raises doubts about the health of US demand, which is evident in Novo’s engagements with US healthcare providers.”
The Danish firm now anticipates a sales growth rate of 21% this year, reduced from an earlier forecast of 24%. Operating profit is projected to rise by 24%, down from previous estimates of 19%.
Analysts are estimating sales and operating profit growths of 17.8% and 21.5%, respectively, for the year.
CEO Lars Fruergaard Jørgensen stated, “We are committed to offering a wide range of services to our customers.” He noted an 18% sales growth in the first quarter of 2025, and a continued expansion of their GLP-1 treatment offerings.
But the financial director expressed skepticism about the efficacy of Donald Trump’s executive order to expedite the approval timelines for US pharmaceutical manufacturing.
Trump issued an executive order on Monday aimed at encouraging international drug manufacturers to establish their operations in the US.
Karsten Munk Knudsen pointed out that it would take years for pharmaceutical companies to align their factories with the quality standards mandated by the U.S. Food and Drug Administration. “We’d appreciate more practical pathways, but we remain doubtful about any substantial change in the industry’s timeline,” he commented.
Danish firms have also stepped back from global gender targets in the US following Trump’s order against diversity, equity, and inclusion initiatives. Similar actions have been observed among other European drugmakers like GSK, Roche, and Novartis.
Nathan mentioned that although Wegovy’s US sales growth is at 39%, much of this is driven by strong performance in other markets. He indicated that Novo faces “intense competition” from Eli Lilly, which is introducing an oral alternative to Wegovy.
Competition may increase further as next-generation GLP-1 drugs are developed and affordable generic versions begin to appear in the market.
Healthcare analyst Sheena Berry from Quilter Cheviot noted, “We’ve witnessed considerable shifts in health and wellness trends. Eli Lilly and Novo Nordisk continue to dominate the obesity market, but numerous clinical trials are underway as competitors aim to enter this space.”
