Novo Reports Q3 Revenue Shortfall While Exceeding Wegovy Sales Expectations, Tightens 2024 Projections
Novo Nordisk announced on Wednesday that it achieved a significant milestone in its third-quarter earnings, by surpassing sales expectations for the widely popular medication Wegovy, reinforcing its leadership position in the competitive obesity treatment market against Eli Lilly.
Wegovy’s sales soared by 79% year-on-year during Q3, totaling .5 billion, which exceeded the consensus estimate of around .3 billion by 9%. Novo’s overall obesity care segment brought in over .7 billion in the quarter, marking a 53% increase compared to the same time last year, and surpassing analyst predictions by 6%, despite Saxenda falling short by 16%.
The diabetes treatment Ozempic also made a notable impact, generating nearly .29 billion in Q3, although it did miss the consensus forecast of .41 billion by 3%. Overall, Novo’s revenue for the quarter rose 21% year-over-year to .26 billion, but slightly fell short of analysts’ expectations of .41 billion.
BMO Capital Markets analyst Evan Seigerman remarked that Wegovy’s third-quarter performance was an unexpected positive outcome for Novo, attributing much of the success to “new international market launches.” Seigerman also highlighted the significant contributions of Novo’s insulin products, particularly the fast-acting NovoRapid, to the company’s robust quarter.
Jefferies analyst Peter Welford responded to the results, describing them as “robust” and potentially reassuring for investors following the recent declines in stock prices. Nevertheless, Novo’s shares were down during trading early on Wednesday.
Seigerman indicated that the miss concerning Ozempic reflects ongoing supply chain challenges, primarily in the U.S., where “manufacturing remains the foremost concern” for Novo and its investors. He added that investors will likely seek clarity on how Novo intends to resolve the supply constraints that impacted sales during this quarter.
Moving forward, Novo has narrowed its 2024 growth guidance, projecting a sales increase of 23% to 27%, adjusting from the previous estimate of 22% to 28%. The anticipated operating profit growth has also been revised to a range of 21% to 27%, down from 20% to 28%. Welford noted that this change was expected, as the updated projection presumes an ongoing limitation in GLP-1 supplies.
Novo’s positive performance in Q3 for Wegovy arrives shortly after the FDA lifted all dosing restrictions on Wegovy and Ozempic from its drug shortages database, signaling that these drugs should now be readily available in the market. In a conversation with Reuters, CEO Lars Fruergaard Jørgensen elaborated that Novo will be lifting restrictions on the lower doses of Wegovy.
However, the regulator’s site still lists semaglutide—the key ingredient in Ozempic and Wegovy—as being “currently in shortage,” allowing room for compounding pharmacies to create their modified formulations of the GLP-1 receptor agonist.
In response to this situation, Novo has firmly opposed such practices, initiating multiple lawsuits in June 2023 against clinics and spas involved in selling compounded semaglutide. The company achieved a permanent injunction against one such establishment in February 2024. Additionally, last month, Novo urged the FDA to declare semaglutide too complex to compound, a classification that would prevent compounding even during shortages.
During the analyst call on Wednesday, Jørgensen remarked, “our primary concern regarding compounding is truly about the quality of the product,” referencing concerning safety reports associated with these remixed medications, causing 10 fatalities and around 100 hospitalizations.
“We have been collaborating with the FDA concerning our increasing supply of Wegovy to the U.S., which includes the starter doses,” Jørgensen stated, expressing the company’s goal of having the drug shortage label removed for semaglutide, thus limiting compounded versions.