Top line
Danish pharmaceutical giant Novo Nordisk raised its 2024 outlook on Thursday morning, beating earnings expectations with its first-quarter earnings because it frantically races to fulfill booming consumer demand for its popular weight-loss and diabetes drugs, Ozempic and Wegovy.
Wegovy is an injectable weight reduction drug that has helped Novo Nordisk soar profits.
Important facts
Novo had net sales of 65.3 billion Danish crowns ($9.4 billion) in the primary three months of 2024, up about 22% from the identical period last 12 months.
The company reported net profit of 25.4 billion Danish crowns ($3.65 billion), up 28% from a 12 months ago.
Novo’s diluted earnings per share of 5.68 Danish crowns ($0.82) represented a 29% increase from the 63 cents per share reported this time last 12 months.
According to FactSet, each earnings per share and revenue significantly exceeded analyst estimates of 75 cents per share and $9.1 billion, respectively.
Novo raised its 2024 outlook and expects revenue growth of 19% to 27% and operating profit growth of between 22% and 30%, each percentage point above previous forecasts.
Novo Nordisk shares fell nearly 2% during trading in Copenhagen on Wednesday morning.
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What drives Novo’s strong performance?
Booming demand for Novo’s GLP-1 drugs, which include diabetes drug Ozempic and weight-loss drug Wegovy, drove the corporate’s strong performance. According to Novo, sales of the burden loss drug Wegovy greater than doubled in comparison with the identical period last 12 months and brought in around $1.35 billion. In the US, where the corporate expanded the Wegovy brand to incorporate cardiovascular advantages, sales increased by greater than a 3rd (35%).
Important background
Novo Nordisk is one of the vital precious firms on the earth, a comparatively latest position for the corporate after a period of growth acknowledges is unusual for an organization of this size. Novo has a market capitalization of just below $600 billion – greater than the GDP of its home country Denmark – and is well above that around $375 billion this time last 12 months, about $257 billion in 2022, and $171 billion in 2021. Novo owes this growth primarily to the exceptional success of GLP-1 drugs like Ozempic and Wegovy – Branded products that contain the identical lively ingredient, semaglutide – or previously treated for diabetes and weight reduction. Alongside U.S. heavyweight Eli Lilly, which makes the weight-loss and diabetes drugs Zepbound and Mounjaro (each brand names for the drug tirzepatide), Novo enjoys a virtual duopoly within the weight-loss drug sector, analysts note imagine By 2030, the drugs could possibly be price as much as $100 billion. The popularity of the drugs has left each facing shortages and supplies are expected to stay tight for the foreseeable future.
Crucial quote
“We are pleased with the sales growth in the first three months of 2024, driven by increased demand for our GLP-1-based diabetes and obesity treatments,” said CEO Lars Fruergaard Jorgensen. He said the corporate’s investments to expand production capability for its obesity and diabetes drugs Wegovy and Ozempic “will allow us to serve significantly more people with diabetes and obesity in the future,” adding that the corporate ” “We are pleased with the positive results of the renal outcomes study with semaglutide and the expansion of the cardiovascular risk reduction approval for Wegovy within the US.”
What you need to listen to
Novo Nordisk, like its rival Eli Lilly, is investigating reports that the advantages of GLP-1 drugs could extend beyond treating obesity and diabetes. Because Novo has already convinced regulators that Wegovy can profit the guts, other research into GLP-1 drugs is examining their advantages in conditions as diverse as addiction and substance use disorders, anxiety, kidney disease, sleep apnea and Parkinson’s.
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