Novo Nordisk is hiking projections for its fast-selling diabetes and obesity drugs even higher following results showing one of them, Wegovy, can reduce the risk of heart problems.
In quarterly earnings released Thursday, the Danish drugmaker said it expects 2023 sales to be 3% higher than it projected three months ago. Demand for its obesity and metabolic drugs Wegovy and Ozempic continue to grow, even after posting double-digit growth rates in 2022 that exceeded investor expectations.
Novo, however, still hasn’t yet completely resolved the manufacturing issues that have constrained supply of Wegovy. The company is still limiting the availability of starter doses to ensure that patients already taking the drug can continue to receive treatment. Stopping therapy could lead patients to regain weight.
Novo’s second-quarter operating profit, announced Thursday, was 24 billion Danish kroner, or $3.5 billion, slightly below what investors had anticipated, Jefferies analyst Peter Welford wrote in a note to clients. Overall sales of insulin as well as its obesity and diabetes drugs also missed investor forecasts, Welford wrote, prompting a slight fall in shares.
Still, Novo’s share price had already soared to record highs this week after the company reported positive data from the SELECT trial, which showed that Wegovy helped protect obese people with heart disease from heart attacks, strokes and death from cardiovascular problems. The results prompted shares to surge 18% in a single day, adding billions to its market value.
The cardiovascular data may be essential to expanding insurance coverage for Wegovy and other drugs like it, known as GLP-1 agonists, as it demonstrates that the weight loss they produce can prevent the expensive hospital stays associated with strokes and heart attacks.
Novo now expects overall sales in 2023 to grow 27% to 33% from the year prior, when its sales totaled 177 billion kroner. That represents an increase from the 24% to 30% it projected in May, though investors were already forecasting 2023 sales at those levels, according to Welford.
Welford is estimating more than $150 billion in worldwide annual sales of GLP-1 drugs by 2031, largely driven by their use in obesity.
Despite Novo’s troubles maintaining supply, Wegovy sales hit 7.5 billion kroner in the second quarter of 2023, a sixfold increase over the same period last year. Sales of Ozempic, which contains the same active ingredient as Wegovy and is used off-label for weight loss, were 22 billion kroner, up 59%.
Other Novo drugs like the injectable Victoza and oral Rybelsus fell below investor forecasts, with sales of 1.8 billion kroner and 4 billion kroner respectively, Welford wrote. The lagging sales suggest that Novo is offering insurers bigger rebates and discounts, possibly to help ensure reimbursement for patients.
Total insulin sales of 11 billion kroner in the second quarter were also down, falling 4% below the same period in 2022. Those figures follow Novo’s decision in March to slash prices, as rival Eli Lilly had previously done.