Novo Nordisk: 25K Weekly Wegovy Starters in US as Supply Quadruples

Since the end of last year, Novo Nordisk has significantly boosted the supply of introductory doses of Wegovy in the US, increasing from 5,000 patients per week in December to around 25,000 patients per week currently. Senior Vice President Negelle Morris expressed optimism about the trend's continuation, despite ongoing restrictions on lower doses as production ramps up to meet the growing demand. Morris emphasized the company’s effort to balance supply and demand in an active market without setting a specific time frame for the resolution.

Despite increased patient starts, Wegovy's sales performance fell short of analyst expectations, generating DKK 9.4 billion ($13.5 billion) in the first quarter. Chief Financial Officer Karsten Munk Knudsen attributed the revenue shortfall to supply constraints and reduced pricing. As the volume expands and competition increases, pricing pressure is anticipated.

Wegovy, along with other semaglutide-based drugs from Novo Nordisk, is under scrutiny in the US due to pricing concerns. Senator Bernie Sanders has initiated an investigation, highlighting the significant price disparity between the US and the UK, where Wegovy is available for much less. Novo Nordisk is also facing competition from Eli Lilly's Mounjaro and Zepbound. However, CEO Lars Fruergaard Jørgensen downplayed the impact, noting the substantial number of patients seeking treatment, which limits the extent of patient switching between products.

Despite these challenges, Novo Nordisk reported robust volume growth in the global branded obesity market, with the company holding a dominant 85.4% market share. Conversely, sales of its other obesity drug, Saxenda, declined by 49% to DKK 1.7 billion, reflecting a market shift towards once-weekly treatments.

In addition to Wegovy, Novo Nordisk experienced double-digit revenue growth in its diabetes product line. Ozempic's revenue surged by 42% to DKK 27.8 billion in the first quarter of 2024. Jørgensen credited the sales growth to increased demand for the company’s GLP-1-based treatments for diabetes and obesity.

However, Novo Nordisk is encountering some resistance in its domestic market, Denmark. Recent restrictions on subsidies for Ozempic have been imposed due to escalating public expenditure, driven by its off-label use for weight loss. In 2023, Danish authorities spent $200 million on Ozempic, representing 8% of the country's total medication costs.

Overall, Novo Nordisk's first-quarter performance was solid, with total sales rising by 22% to DKK 65.3 billion and profits increasing by 28% to DKK 25.4 billion. As a result, the company raised its full-year revenue growth forecast for 2024 to between 19% and 27% on a constant exchange rate basis, increasing both ends of the guidance by 1 percentage point. Similarly, the operating profit outlook was elevated to a range of 22% to 30%.

Markus Manns from Union Investment commented that the performance, despite supply constraints, was commendable and the modest guidance raise was a positive surprise, noting that few anticipated an increase so early in the year.

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