Novo Nordisk is liberating its second-quarter profits on Wednesday, with analysts anticipating greater than 20% expansion pushed through Ozempic and Wegovy gross sales. Alternatively, the corporate faces demanding situations from extra festival.
Europe’s greatest corporate, Novo Nordisk, is about to file its second-quarter profits sooner than Ecu markets open on Wednesday. The Danish pharmaceutical large skilled fast expansion within the first quarter, pushed through excessive call for for its diabetes and weight problems medication, Ozempic and Wegovy.
Novo’s stocks are up 22% year-to-date after a 17% pullback from its all-time excessive. Whilst analysts be expecting robust expansion to proceed in the second one quarter, rising festival would possibly build up value force, making its steerage a very powerful for traders to evaluate its marketplace valuation.
Forecasts
Consistent with FactSet’s survey, Novo Nordisk is anticipated to file second-quarter income of 68.66 billion Danish kroner (€9.2bn), a 26% build up year-on-year. The online benefit is forecasted at 21.38 billion Danish kroner (€2.86bn), indicating a ten% expansion year-on-year however a slowdown from the 28% within the first quarter.
Call for for Novo’s Wegovy and Ozempic, glucagon-like peptide-1 (GLP-1) agonists, is outpacing provide because of their effectiveness in treating weight problems and diabetes. Gross sales of those medication are anticipated to upward thrust through 33% from a yr previous, up from 30% within the first quarter.
Call for for weight-loss remedy nonetheless excessive
Following the first-quarter profits free up, Novo Nordisk upgraded its 2024 outlook through one proportion level, projecting gross sales expansion between 19% and 27% and working benefit expansion between 22% and 30% at consistent trade charges.
Analysts watch for additional upgrades to its profits steerage for the present quarter, given emerging call for and increasing capacities. Novo Nordisk introduced a $4.1 bn (€3.74bn) funding in June this yr, to amplify its US production capability with a brand new plant in Clayton, North Carolina, devoted to generating high-demand weight reduction medication such Wegovy and Ozempic.
Rising festival
Whilst the weight-loss drug gross sales have considerably boosted Novo Nordisk’s expansion, emerging festival poses demanding situations. Eli Lilly’s weight-loss drug Zepbound is the most important danger to Novo’s gross sales.
Consistent with the scientific analysis company IQVIA, Lilly’s Zepbound has captured kind of 40% marketplace proportion in america, with 130,000 prescriptions for the week finishing July 19, in comparison to Novo’s 200,000 for Wegovy. Alternatively, each corporations face provide crunches, making their provide updates a very powerful for expansion outlooks.
In Might, Amgen introduced encouraging trial effects for its experimental weight problems drug, inflicting Novo’s stocks to drop 5% at the day. Greater provide and festival from smaller avid gamers would possibly put value force on Novo’s insulin merchandise, probably impacting total efficiency.
Alternatively, Novo Nordisk’s long-term technique in analysis and building would possibly stay the corporate very aggressive with competitors and strengthen its enlargement into new markets. CEO Lars Fruergaard Jørgensen mentioned within the closing profits name: “Inside R&D, we’re proud of the certain effects from the kidney results trial with semaglutide and the label enlargement for cardiovascular chance relief for Wegovy in america.”
Gross sales enlargement in China
In 2023, Novo Nordisk has doubled its gross sales of Ozempic to 4.82 billion kroner (€0.65 bn) in China. In June, Chinese language officers licensed its weight-loss Wegovy, marking a significant step for the company to go into the profitable marketplace with a inhabitants of one.4 billion.
Novo Nordisk sees the nice China area, together with mainland China, Hong Kong, and Taiwan, as essential for the corporate’s long run expansion. It expects that the collection of other folks with weight problems will build up 161% through 20245 from the ones of 2021. Alternatively, the corporate’s patent on Wegovy and Ozempic will expire in China through 2026, which gives restricted time for the company to consolidate its marketplace proportion on the planet’s second-largest economic system.