Global pharmaceutical company Novo Nordisk A/S (DE:NOV) (NVO) lowered its annual profit outlook after its weight loss drug Wegovy’s sales fell short of expectations. As a result, the company cut its operating profit forecast for 2024. It now expects operating profit growth between 20% and 28% at CER (constant exchange rates), down from the earlier projection of 22% to 30%.
Following the results yesterday, Novo’s Copenhagen-listed shares lost around 7%. The stock opened at a gain of 0.59% as of writing today.
Novo Nordisk manufactures and sells medicines that specialize in treating diabetes, obesity, and Alzheimer’s disease.
Novo Nordisk Faces Setback with Wegovy
In Q2, Wegovy generated sales of DKK11.7 billion, below analysts’ expectations of DKK13.6 billion. Nonetheless, Wegovy’s sales increased 55% year-over-year in Q2.
In recent years, Novo Nordisk has established itself as a leading player in the booming weight-loss market. However, it is facing intense competition from Eli Lilly & Co.’s (LLY) weight-loss drug, Mounjaro. It is also grappling with supply chain issues to meet high demand. Additionally, investors are concerned about the rising competition from Lilly’s FDA-approved Zepbound, which has been clinically proven to be more effective than Wegovy.
Along with the results, Novo Nordisk announced that its attempt to secure approval for using its obesity drug Wegovy to treat heart failure patients has been delayed. The company stated that it has withdrawn its application with the FDA (Food and Drug Administration) and has plans to resubmit it in early 2025.
Highlights from NOV’s Q2 Results
In the second quarter, Novo Nordisk’s sales grew by 25% (at CER) to DKK68 billion, while the net profit of DKK20.1 billion was below the analysts’ expectation of DKK21.3 billion.
In terms of outlook, the company now expects its sales to increase by 22% to 28% at CER, compared to the previous forecast of 19% to 27%.
Is Novo Nordisk a Buy Right Now?
According to TipRanks, NOV stock has received a Moderate Buy consensus rating based on eight Buys, three Holds, and one Sell. The Novo Nordisk share price forecast stands at €132.17, which is around 18% above the current trading level.