Novo Nordisk sales soar amid demand for obesity treatments

The Wegovy injections suppress appetite. File picture

Novo Nordisk sales surged in the third quarter and double-digit growth should carry into 2024 driven by burgeoning demand for its obesity and diabetes blockbusters.

Revenue jumped 38% to 59 billion kroner (€8bn) excluding some items, the Danish drugmaker said, strengthening its grip on an obesity market estimated to hit $100bn (€94bn) by 2030. Operating profit also rose 47% during the period.

Novo has vaulted into the limelight as Wegovy and another related medicine for diabetes, Ozempic, proved they could help people shed unwanted weight by curbing their appetite. Wegovy sales hit nearly 10 billion kroner during the period, ahead of expectations even as it continues to battle with supply issues.

Novo shares rose more than 3% in early trading. The stock has almost doubled in the past two years, helping the company overtake behemoths like Nestle, L’Oreal and luxury-goods giant LVMH to become Europe’s most valuable company.

About 95% of sales of Wegovy are in the US, where the pharma group is struggling to keep up with demand. While the company is investing to boost supply capacity, it still expects to periodically face constraints and shortages in the US and elsewhere. 

For now, it’s restricting starter doses for Wegovy—which can help patients lose about 15% of their body weight—to safeguard supplies for people in the US who are already on the medicine, the company said.

Potentially 50 million Americans could need access to obesity drugs right now and more people are willing to opt into treatment, according to Novo CEO Lars Fruergaard Jørgensen. Novo is currently treating about 500,000 US patients.

“We’re pleased with our ability to gradually expand and treat more patients,” he said on a call with reporters. “We have a growth strategy and we can deliver according to that.” He declined to go into details about when new factories or production lines will come online to help ease supply constraints.

Sales of Novo’s treatments for diabetes, including Ozempic, Rybelsus and Victoza, grew by nearly 50% during the period. The company said it aims to have more than a third of the global diabetes market by 2025.

“Overall a strong set of numbers from Novo Nordisk, driven by Wegovy,” Brian Godsk Borsting, a credit analyst at Danske Bank, said. “The coming years will benefit further from a wider launch of Wegovy in various markets.” 

The success of weight-loss drugs has sparked something of a gold rush in the pharma industry, and some analysts predict this class of treatments could become one of the biggest-ever blockbusters.

Novo has already raised its full-year outlook for revenue and profit for a third time, saying operating profit may jump by as much as 46%, fuelled by Wegovy and Ozempic sales. The injected medicines share the same active ingredient and work by suppressing patients’ appetite as well as slowing the movement of food through the digestive tract.

- Bloomberg