The pharmaceutical manufacturer Novo Nordisk earned significantly more last year thanks to the hype surrounding its appetite suppressant Wegovy.
The bottom line was a profit of 83.7 billion Danish crowns (11.2 billion euros), around one and a half times as much as a year before. While the Danish group continues to struggle with delivery problems, there are signs of increasing competition in 2024. Because the US company Eli Lilly is now launching a competitor. Novo boss Lars Fruergaard was correspondingly cautious about the balance sheet presentation on Wednesday. He expects less business growth this year than last due to competition.
According to the balance sheet presentation, the Novo share price ultimately rose 3.56 percent to 774.8 Danish kroner. The paper has been on the rise for a good four years. The price has roughly quadrupled since then. It recently received a new boost from the increasing enthusiasm about the company’s appetite suppressants.
CEO Fruergaard wants to increase sales by 18 to 26 percent at constant exchange rates, as the company in Bagsvaerd further announced. Last year, currency-adjusted revenue increased by 36 percent to a good 232 billion Danish crowns (31.2 billion euros). The drivers were new medications against diabetes and obesity.
The group’s operating profit increased by 44 percent to 102.6 billion crowns in the reporting period, excluding exchange rate effects. In the current year it is expected to grow by 21 to 29 percent after adjusting for currency effects. JPMorgan analyst Richard Vosser rated Novo’s final quarter results as strong. The outlook was also better than expected.
Weight loss aids such as Wegovy and the diabetes drug Ozempic, which is based on the same active ingredient (semaglutide), are currently in extremely high demand, especially in the USA. The trend is promoted by celebrities. In the United States, Novo Nordisk’s sales jumped by around half year-on-year. Worldwide, Wegovy alone brought in more than 31 billion crowns in sales – around five times as much as the previous year.
The group has now invested large sums in expanding its capacities and announced further investments worth billions. However, he can’t keep up with the deliveries. Because of the difficulties, Wegovy sales rose less than expected in the final quarter, industry experts said. It was only this January that the company began to expand the scope of delivery of a lower-dose version of Wegovy.
In the USA, meanwhile, there is increasing resistance from payers to the high prices that Novo is charging for Wegovy. Further studies could possibly bring movement into the debate about covering costs. A few months ago, Novo Nordisk presented positive data according to which Wegovy also works better as a prevention against strokes and heart attacks than the usual standard treatment.
However, it is controversial whether the products can actually keep the high hopes of many patients for weight loss. In studies there is increasing evidence of a yo-yo effect – i.e. weight gain after stopping the medication. There are also side effects such as nausea, diarrhea and constipation. This applies to both the active ingredient semaglutide from Novo Nordisk and the active ingredient tirzepatide from US competitor Lilly.
The Americans have had the tirzepatide-containing weight reducer Zepbound on the US market for a few months. In expert circles, this is considered to be the more potent agent when it comes to weight loss. It is therefore suspected that Lilly could challenge Novo Nordisk’s current position as market leader here.
Novo Nordisk investments good for pharmaceutical suppliers
The prospect of high investments by the pharmaceutical giant Novo Nordisk drove the prices of pharmaceutical suppliers and service providers on Wednesday. In the DAX, Sartorius was ultimately at the top via XETRA with a premium of 1.67 percent to 340.90 euros. Merck KGaA rose by 0.56 percent to 152.40 euros. In the SDAX, SCHOTT Pharma even rose to a record high at times. At the end of trading they gained 4.05 percent to 36.00 euros.
Novo Nordisk put capital expenditure this year at 45 billion Danish kroner. If you put these expenses in relation to sales, this is significantly more than expected, wrote analyst Jo Walton from UBS. A dealer viewed this as positive for SCHOTT Pharma and Gerresheimer. However, Gerresheimer shares were unable to benefit, losing 0.16 percent to 94.90 euros.