Novo Nordisk, the leading Danish pharmaceutical company known for its production of insulin, has once again proven its dominance in the industry with its latest trading update. The company, which has become Europe’s largest by stock market value in the last year, surpassed investor expectations in both sales and profits.
In its updated forecast, Novo Nordisk now expects sales growth to increase by 19-27%, up from its previous estimate of 18-26% in January. Similarly, the company expects profits to grow by 22-30%, higher than its previous forecast of 21-29%. In the first three months of 2024, Novo Nordisk reported a net profit of DKK 25.4 billion, a 28% increase from the same period last year.
Digging deeper into the numbers, Novo Nordisk revealed some impressive figures. Sales of its weight-loss drug Wegovy saw a staggering 109% increase compared to the same period last year. In the United States, where Novo Nordisk generates three-quarters of its global obesity care sales, demand for Wegovy is far exceeding supply. To meet this demand, the company’s parent, Novo Holdings, recently acquired the US drug manufacturing firm Catalent.
Wegovy, which is now prescribed weekly to over 130,000 Americans, with around 25,000 new patients being prescribed the drug every week, gives Novo Nordisk a significant market share of 85.4% in the global obesity care market. However, this dominance has raised concerns among US politicians and regulators. The Senate Committee on Health, Education, Labor, and Pensions has launched an investigation into the pricing of Wegovy and another Novo Nordisk drug, Ozempic.
In a letter to the company, committee chair Bernie Sanders expressed concerns over the high prices of these drugs in the US compared to other countries. However, Novo Nordisk has defended its pricing, stating that prices are already decreasing as production ramps up. The company also points out that the majority of Wegovy patients in the US, whose medication is covered by insurance, pay $25 or less per month.
Novo Nordisk’s moral ethos, backed by its parent company’s charitable foundation, also plays a significant role in its pricing strategy. The company reinvests a large portion of its profits into research and development, with over $5 billion spent in 2020 alone. In the first quarter of 2021, Novo Nordisk spent DKK 8.6 billion on R&D, a 28% increase from the same period last year.
Despite its success in the weight-loss and diabetes treatment market, Novo Nordisk is also focusing on other therapy areas, including Alzheimer’s disease, fatty liver disease, and hemophilia. The company’s president and CEO, Lars Fruergaard Jorgensen, has encouraged its scientists to explore other potential uses for its drugs, such as cardiovascular risk reduction.
Novo Nordisk’s recent capital markets day in March also revealed plans for a potentially more potent weight-loss pill called Amycretin. In a phase I study, Amycretin showed a 13.1% weight loss after 12 weeks, compared to 6% with Wegovy. The company’s executive vice president for development expects the product to become commercially available within this decade.
With a stock market valuation of DKK 3.04 trillion, Novo Nordisk is currently the largest company in Europe. If listed in the US, it would rank 15th in the S&P 500, surpassing its peers such as Johnson & Johnson, Merck, Abbvie, Abbott, and Pfizer. The company’s success in the weight-loss market, along with the potential of new drugs in its pipeline, could drive even more growth in the future.
