Europe’s largest pharmaceutical firm reported first-quarter earnings that exceeded analysts’ expectations, but lowered its full-year guidance. Novo Nordisk now forecasts 2025 sales growth between 13% and 21%, and operating profit growth between 16% and 24% at constant exchange rates (CER), down 3 and 5 percentage points respectively from previous projections.
“We have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US. We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments,” chief executive, Lars Fruergaard Jørgensen, said.
Despite the downgrade, Novo Nordisk’s shares rose 4.4% at the European market open. However, the stock remains down 26% year-to-date, compared with a flat performance by its main US rival, Eli Lilly.
Compounding pressures
Demand for GLP-1 weight-loss drugs surged throughout 2024, significantly outpacing supply. Under US Food and Drug Administration (FDA) policy, compounding pharmacies are allowed to produce copies of drugs that are in short supply. This has enabled smaller telehealth rivals to sell cheaper, compounded versions of weight-loss treatments such as Wegovy and Eli Lilly’s Zepbound.
Although the FDA declared the shortages over in February, it allowed a transition period for compounded versions until 22 May. In response to mounting price pressure, Novo Nordisk cut the cost of Wegovy by more than half on its online pharmacy, NovoCare, following a similar move by Eli Lilly.
“With around 1 billion people living with obesity globally and only a few million on treatment, Novo Nordisk continues the global roll-out of Wegovy,” the company stated. CFO Karsten Munk Knudsen said he expects Wegovy sales to accelerate in the third quarter.
Profits exceed expectations
Net profit rose 20% year-on-year to 38.8 billion Danish kroner (€5.2 billion), while net sales increased 18% to 78.1 billion kroner (€10.5 billion), both ahead of consensus estimates. Sales in the company’s core diabetes and obesity care division climbed 19% to 73.5 billion kroner (€9.9 billion), driven by a 65% increase in obesity care and an 11% rise in GLP-1 diabetes drug sales. All figures are at CER.
Novo Nordisk also highlighted the completion of its REDEFINE 2 trial for CagriSema, its next-generation obesity drug. The treatment delivered a 15.7% weight reduction. Novo Nordisk expects to file for the first regulatory approval of CagriSema in the first quarter next year. However, the result, initially released in March, disappointed investors, which was short of the projected 25% weight reduction. Eli Lilly released trial results for its latest weight-loss drug, retatrutide, showing 24% weight loss last year.
“Within R&D, we are pleased to have completed the last pivotal trial for our next-generation obesity treatment, CagriSema, and to have filed for US approval of oral semaglutide 25 mg, with the potential to be the first oral GLP-1 treatment for obesity,” Jørgensen said.
