Wegovy Sales Dip Due to Eli Lilly’s Zepbound

Novo Nordisk, the Danish pharmaceutical giant, is encountering increased competition in the weight loss and diabetes treatment sectors, leading to lower-than-expected sales for its blockbuster drug Wegovy (semaglutide) in the second quarter. This decline in sales performance has resulted in a 5.7% drop in the company's shares at market open on 7 August, reducing its market cap to $580.3 billion, though it remains Europe’s most valuable listed company.

Sales of Wegovy, the pioneering weight-loss medication, amounted to DKr11.66 billion ($1.71 billion) in the second quarter, falling short of the $1.98 billion forecasted by analysts, according to a consensus compiled by the company. Sara Reci, a managing analyst at GlobalData, attributed the weaker sales primarily to supply shortages. Since early 2022, several doses of Wegovy have been listed on the FDA’s drug shortage list, as Novo Nordisk has struggled to meet the high demand for its GLP-1 receptor agonist.

As of 6 August, four out of the five marketed doses of Wegovy are available, but its lowest dose remains on the shortages list. Doug Langa, Executive Vice President of Novo Nordisk North America operations, mentioned in a 7 August conference call that the company is still “dynamically managing” dose caps to ensure continuous treatment for patients. Reci noted that these supply constraints have created a bottleneck in Wegovy’s market performance, despite a 55% increase in sales from the same period last year. Wegovy is approved for weight loss in patients who meet specific criteria, while another version of semaglutide, marketed as Ozempic, is used to improve glycaemic control and reduce cardiovascular risk in type 2 diabetes patients. Ozempic generated $4.2 billion in Q2 sales.

Novo Nordisk's net sales reached $9.95 billion for Q2, with operating profit increasing by 18% in local currency. However, this growth was impacted by an $833 million impairment related to the Phase III failure of their chronic kidney disease-associated hypertension candidate, ocedurenone. Due to supply constraints, the company adjusted its operating profit growth forecast for the year to 20%-28%, down from the previously stated 22%-30%.

The company has acknowledged "capacity limitations at some manufacturing sites" and periodic supply constraints across a range of products. Sales expectations have been revised, with anticipated growth increasing from 19%-27% to 22%-28% at constant exchange rates (CER). Novo Nordisk is making efforts to enhance supply, including investments in both internal and external production capacities. Reci expressed confidence that Novo Nordisk will address these supply challenges and ramp up Wegovy production, expecting stronger growth in the second half of 2024.

In addition to supply bottlenecks, Novo Nordisk is facing heightened competition for its flagship cardiometabolic product. The launch of Zepbound (tirzepatide) in the US market in December 2023 has introduced a formidable rival. Clinical trials have shown 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. This makes Zepbound a more appealing option for healthcare providers and patients seeking effective weight loss solutions.

Eli Lilly’s Zepbound recorded higher-than-expected sales in the first quarter of this year, generating $517 million. The drug is projected to achieve sales of $27.2 billion by 2030, whereas Wegovy’s sales are expected to reach $18.7 billion by the same year. This competitive landscape underscores the growing challenges Novo Nordisk faces in maintaining its market position.