Novo Nordisk, the Danish pharmaceutical giant, anticipates that the demand for its weight loss drugs will continue to surpass its supply, despite expanding its manufacturing capacity. This comes as new trial data reinforces the argument that treating obesity can yield broader health benefits.
The company has witnessed a remarkable 36 percent surge in sales of its obesity and diabetes drugs, reaching nearly $22 billion in the first nine months of the year. Patients have flocked to these treatments, drawn by their potential for more substantial weight loss compared to earlier medications.
Lars Fruergaard Jørgensen, the Chief Executive of Novo Nordisk, emphasized the company’s commitment to ensuring that patients starting on drugs like Wegovy can maintain access. He revealed that the company was gradually expanding its manufacturing capabilities and expected to have more products available next year. Despite this growth, Jørgensen acknowledged that the demand side continues to outpace their supply.
Wegovy, one of their key drugs, is now covered by insurers for approximately 50 million Americans, and Jørgensen anticipates that this number will rise. In August, initial trial data unveiled that Wegovy reduced the risk of serious cardiac events, such as heart attacks or strokes, by 20 percent.
If Novo Nordisk receives regulatory approval to extend the use of Wegovy to individuals at risk of cardiovascular complications, analysts predict that more insurers will start covering the drug.
During the first nine months of this year, sales of obesity drugs like Wegovy surged by 167 percent to DKr30.4 billion ($4.3 billion), while revenue from diabetes drugs, including Ozempic, which is often prescribed off-label for weight loss, increased by 45 percent. The company reported total net sales of DKr166 billion, marking a 29 percent year-on-year increase, with diluted earnings per share rising by 49 percent to DKr13.71.
Novo Nordisk recently raised its full-year revenue and profit guidance due to better-than-expected sales. The company now anticipates sales growth in 2023 of 32 to 38 percent, up from the previous prediction of 27 to 33 percent at constant exchange rates. Additionally, it forecasts an operating profit growth of 40 to 46 percent this year, an increase from the earlier guidance of 31 to 37 percent.
Novo Nordisk is the market leader in obesity and diabetes drugs utilizing the GLP-1 mechanism, boasting a global market share of 54.3 percent. While its market share in the US slightly declined over the past year, it expanded in international markets as Novo Nordisk introduced Wegovy in five European countries, including Germany and the UK.
However, Novo Nordisk may face heightened competition from Eli Lilly if the US rival’s Mounjaro diabetes drug is also approved for obesity treatment. Though results from trials, which are not always directly comparable, show that Mounjaro has helped patients shed even more of their body weight compared to Wegovy.
Jørgensen acknowledged the long-standing rivalry between the two companies in the field of diabetes and emphasized that competition and innovation were ultimately beneficial for both, driving growth and keeping them on their toes.
