People walk inside the Novo Nordisk headquarters in Bagsvaerd, Denmark, in 2023. The maker of Ozempic and Wegovy obesity drugs cut its guidance for a fourth time on Wednesday.SERGEI GAPON/AFP/Getty Images
Wegovy-maker Novo Nordisk NVO-N trimmed its full-year profit and sales forecasts on Wednesday as sales growth slows, but investors cheered a better-than-expected Medicare pricing deal that helped lift the shares after an initial slide.
Novo is going through a tumultuous period marked by a share price plunge and slowing sales growth, which have prompted a change of CEO and a board shakeup. It’s also in a bidding war with U.S. rival Pfizer PFE-N for biotech Metsera MTSR-Q.
CEO Mike Doustdar, who took the helm in August and is driving a turnaround plan, is trying to claw back lost ground in a fiercely competitive obesity drug market against U.S. rival Eli Lilly LLY-N, which posted far stronger results last week.
Doustdar said on a media call that Novo was working to expand its direct-to-consumer sales in the U.S. and was confident it would beat Pfizer in acquiring obesity drug developer Metsera.
Novo said its guidance cut – the fourth this year – was due to a weaker growth outlook for the firm’s blockbuster treatments Wegovy and Ozempic for weight loss and diabetes.
But Novo also said it had agreed pricing for semaglutide – the active ingredient in the two drugs – under the U.S. Medicare scheme, addressing a major uncertainty for investors worried that the Trump administration would take a tough line in talks.
Novo did not disclose the agreed price, but said that if applied this year it would have had a “low-single-digit negative impact on sales.”
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JP Morgan analysts estimated this could equate to around a 6-billion Danish crown ($1.3-billion) hit to sales, adding that was “better than feared” and could offset the negative news from the guidance cut.
“The shares could ultimately be in positive territory today,” they wrote in a note. The shares were up 1 per cent by 11:00 GMT after a sharp initial drop.
Fuelled by the rapid take-up of Wegovy, the first in a new class of drugs called GLP-1 receptor agonists, Novo became Europe’s most valuable firm last year. But sales growth has slowed sharply amid competition from Eli Lilly and compounded copycat drugs made from the same ingredients as branded drugs.
Novo’s market value peaked in June 2024 at around US$650-billion ($918.6-billion), but has since fallen by about 70 per cent, close to its value around Wegovy’s launch in 2021.
Sales of Ozempic and Wegovy made Novo Nordisk Europe's most valuable company last year, but sales growth has slowed amid heightened competition.Hollie Adams/Reuters
Novo now expects full-year operating profit – measured in local currencies – to grow between 4 per cent and 7 per cent, down from 4 to 10 per cent previously. It trimmed its outlook for 2025 sales growth to between 8 per cent and 11 per cent, compared with its previous 8 to 14 per cent range.
The company expects sales growth to slow further in the fourth quarter, after growing at the slowest pace since early 2022 in the third quarter at 11 per cent, just shy of 11.4 per cent estimates.
Mikael Bak, head of the Danish Shareholders’ Association which has 17,000 members – a majority of them invested in Novo – said the third-quarter update was not a surprise, but it was “nevertheless a disappointment.”
“We support the transformation process now under way and view this as a moment for patience, focus, and disciplined execution,” he added.
UBS analysts said investors would be disappointed by the magnitude of the guidance cut and the growth outlook.
Novo warned that unlawful mass compounding – copycat drugs custom-made from the same ingredients as branded drugs – continued in the third quarter.
Sales of Wegovy rose 18 per cent year-on-year in the period to 20.4-billion crowns, versus analysts’ forecasts of 20.9-billion. Weekly prescriptions in the U.S. for Wegovy had fallen by 10,000 over the last three months to around 270,000, the company said.
Operating profit fell 30 per cent to 23.7-billion crowns, below the expected 24.6-billion crowns.