Novo Nordisk is feeling the effects of increased competition in the weight loss and diabetes treatment space, as the Danish drugmaker reported lower-than-expected sales for blockbuster drug Wegovy (semaglutide) in the second quarter.
Shares in the company were down 5.7% at market open on 7 August compared to the pre-announcement market close. Novo has a market cap of $580.3bn and is Europe’s most valuable listed company.
Increased sales of Wegovy, the first-to-market weight-loss drug, generated DKr11.66bn ($1.71bn), below the $1.98bn figure forecast by analysts in a company-compiled consensus, as per Reuters.
GlobalData managing analyst Sara Reci told Pharmaceutical Technology supply shortages have been one of the primary reasons for weakened Wegovy sales. Several doses of the drug had been on the FDA’s drug shortage list since early 2022 as Novo struggled to keep up with the soaring demand for its GLP-1 receptor agonist.
As per a 6 August update, although four out of five marketed doses are now available, Wegovy’s lowest dose remains on the shortages list.
Novo Nordisk North America operations EVP Doug Langa said in a 7 August conference call to investors that the company is still “dynamically managing” dose caps.
Reci said: “Supplies have been limited to ensure that patients who begin treatment can continue without disruption. These constraints have created a bottleneck in Wegovy’s market performance.”
Nevertheless, Wegovy sales were still up 55% from the same period last year as strong demand for the drug persists. Wegovy is approved as a weight loss drug for patients who meet the label criteria. Novo markets a different version of semaglutide as Ozempic to improve glycaemic control and reduce cardiovascular risk in patients with type 2 diabetes. Ozempic generated $4.2bn in Q2 sales.
Net sales for Novo, one of the first to galvanise the multi-billion metabolic disease market, reached $9.95bn for Q2. Operating profit increased by 18% in local currency, though it was impacted by an $833m impairment related to the Phase III failure of chronic kidney disease-associated hypertension candidate ocedurenone.
Citing supply constraints, the company cut its operating profit growth forecast this year to between 20% and 28%, down from 22% to 30% as previously stated.
Novo said it had “capacity limitations at some manufacturing sites”, and that the outlook reflects “periodic supply constraints and related drug shortage notifications” across a range of products, as per the Q2 earnings report.
Sales are expected to increase from the original guidance of 19%–27% to 22%–28% at constant exchange rates (CER). The company said it is making efforts to increase supply, including investments in internal and external capacity.
Reci stated: “Novo is confident in its ability to address [supply issues] and increase Wegovy production, anticipating stronger growth in the second half of 2024.”
Along with supply bottlenecks, Novo’s lower sales are due to its flagship cardiometabolic product no longer possessing a market monopoly.
Reci said: “The launch of Zepbound in the US market in December 2023 has introduced significant competition for Wegovy. Clinical trials have demonstrated that Zepbound is more effective than Wegovy, with patients experiencing a 21% reduction in body weight over 72 weeks, compared to a 15% reduction over 68 weeks for those on Wegovy. These findings make Zepbound a more attractive option for healthcare providers and patients seeking effective weight loss solutions.”
Eli Lilly’s Zepbound (tirzepatide) recorded higher-than-expected sales in Q1 this year, tabling $517m for the US drugmaker. The drug is forecast to generate sales of $27.2bn by 2030, according to GlobalData’s Pharma Intelligence Centre. Wegovy, meanwhile, may not reach the same lofty height, with sales predicted to get to $18.7bn by the same year.
GlobalData is the parent company of Pharmaceutical Technology.
