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Novo Nordisk shares hit a file excessive on Wednesday, because the Danish pharma group’s blockbuster weight-loss medication powered a surge in gross sales and income final yr, cementing its place as Europe’s most respected firm.
The Danish group reported that gross sales climbed 36 per cent to $33.7bn in 2023 whereas income rose to virtually $15bn, each above analysts’ expectations. Shares rose by 4 per cent to an all-time excessive in morning buying and selling earlier than falling again, leaving the corporate hovering round a $500bn market capitalisation for the primary time.
Lars Fruergaard Jørgensen, Novo Nordisk’s chief government, mentioned he was “very happy with the sturdy efficiency in 2023 reflecting that greater than 40mn folks at the moment are benefiting from our revolutionary diabetes and weight problems therapies”.
Rising demand for the group’s diabetes therapy Ozempic and weight-loss drug Wegovy has pushed it and US rival Eli Lilly to the forefront of a market some analysts estimate is value as a lot as $140bn a yr.
Eli Lilly, maker of Mounjaro and the not too long ago permitted Zepbound, and Novo Nordisk have up to now dominated the sector. Their medication, often known as GLP-1s, suppress urge for food and have enabled spectacular weight reduction outcomes, with Wegovy serving to customers lose about 15 per cent of their physique weight.
Traders are excited not merely by the medication’ effectiveness in tackling weight problems, but additionally by their potential in lowering the impression of cardiovascular, liver and different ailments. Novo Nordisk hopes that trial outcomes revealed in November that discovered Wegovy reduce the chance of demise by 18 per cent will encourage well being programs and insurers to pay for the therapy.
It’s investing in new manufacturing services to satisfy demand, however the firm mentioned on Wednesday that gross sales development this yr would ease to between 18 per cent and 26 per cent, as competitors elevated and constraints continued. Gross sales of Wegovy within the fourth quarter of 2023 had been $1.4bn, 6 per cent beneath consensus estimates, resulting from provide bottlenecks.
“It’s to be anticipated for fairly a while there shall be demand that outgrows what may be produced by us and possibly the competitors, however we predict fairly sturdy development for 2024, on high of a bigger and bigger base,” Jørgensen mentioned.
As extra sufferers take up the drug, Karsten Munk Knudsen, chief monetary officer of Novo Nordisk, mentioned that costs for weight-loss drug Wegovy and diabetes therapy Ozempic would “regularly come down” to ease stress on medical health insurance and care programs.
“With expansions comes pressures on budgets with payers,” he mentioned. “As quantity continues to increase, costs will regularly come down, however far more than offset by the amount enlargement within the coming years.”
The listing worth of a four-dose package deal of Wegovy — sufficient for a month’s provide — is available in at $1,349. Insurers and distributors within the US usually negotiate decrease costs with producers, however Wegovy’s listing worth stays greater than the $1,060 listing worth of Eli Lilly’s not too long ago permitted remedy Zepbound.
To deal with elevated competitors, Novo Nordisk can also be creating a pipeline of other anti-obesity medicines because it seeks to remain forward of rivals within the weight-loss market. Roche and AstraZeneca have acquired or signed licensing offers with biotechs creating weight-loss therapies previously yr.
Jørgensen mentioned he was “very happy” with late stage trial outcomes for a once-weekly insulin-based medication for diabetics, whereas the corporate additionally mentioned it had efficiently accomplished an early trial for an oral weight problems medication watched by analysts.
