Despite strong first-quarter results, Novo Nordisk (NYSE:NVO) witnessed a downturn in stock trading on Thursday. The company surpassed Wall Street expectations, recording a 25% increase in total sales, reaching $9.5 billion in revenue across all drugs. Leading the charge were the blockbuster GLP-1s Ozempic for diabetes and Wegovy for weight loss.
Wegovy contributed $1.3 billion to Novo’s revenue, while Ozempic sales reached $3.9 billion for the quarter. CEO Lars Jørgensen revealed that Wegovy prescriptions have surged, with the company now filling 27,000 new prescriptions per week, a significant increase from the previous quarter.
However, Novo fell short of Wall Street estimates for Wegovy sales by 11%, despite increased supply and prescriptions. This shortfall was attributed to intensified competition, particularly from Eli Lilly’s (NYSE:LLY) Zepbound, prompting Novo to adjust prices, although exact figures were not disclosed.
The recent approval of Wegovy for obese patients with cardiovascular disease risk has opened new revenue streams, particularly through Medicare funding, signaling potential growth opportunities for Novo.
Amidst its financial success, Novo faces scrutiny from government investigations concerning pricing and patent issues, both in the US and Denmark. The Federal Trade Commission has raised concerns about Novo’s patent listings, particularly for Ozempic and Saxenda, accusing the company of hindering competition in the pharmaceutical market.
Jørgensen defended Novo’s patent practices, asserting that they comply with regulatory requirements. He clarified that the patents flagged by the FTC pertain to devices associated with Novo’s drugs, rather than the drug compounds themselves.
Despite ongoing concerns about the list price of Ozempic, Jørgensen defended the pricing strategy, highlighting a 40% decrease since its launch in 2018. He emphasized the importance of understanding the complexities of pricing dynamics, including rebates and discounts negotiated with pharmacy benefits managers.
Novo remains confident in its growth prospects for the year, aiming to capitalize on opportunities in treating obesity and type 2 diabetes while navigating regulatory challenges and market competition.
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