Novo Nordisk rides weight loss drug boom as risks mount

Novo Nordisk, the maker of Ozempic and Wegovy, continues to enjoy booming sales, but supply constraints and pricing concerns are putting pressure on the stock.

Why it matters: The company's weight-loss and diabetes drugs have transformed the Danish drug giant into one of the hottest stocks on the market.

Between the lines: Novo on Thursday reported sales of $9.35 billion in the first quarter, up 22% from a year earlier, as its GLP-1 drugs continue to soar in popularity.

• Wegovy is now getting 25,000 additional patients every week in the U.S., up from a rate of just 5,000 weekly when 2024 began, CFO Karsten Knudsen said on an earnings call.

Yes, but: Supply constraints are still affecting Ozempic and Wegovy — and the company said those will continue.

• The company said it expects sales growth of 19%–27% for 2024, about the same as the forecast it released in January: 18%–26%.
• "Not raising the outlook underscores the uncertainty on the manufacturing capacity ramp," Lee Brown, health care sector global team leader at research firm Third Bridge, tells Axios.

State of play: The company also reported "continued pricing pressure" on diabetes and obesity care products, including lower realized prices on Wegovy, despite demand outstripping supply.

• Insufficient supply usually means higher prices, but Novo CEO Lars Fruergaard Jørgensen said lower prices reflect the company's effort to reach "more and more patients."

Threat level: While Ozempic and Wegovy enjoy a huge head start in the weight-loss lane, competitors are surging — namely from Eli Lilly with Mounjaro and Zepbound, whose sales are soaring.

• Others are targeting the market with ferocity owing to the substantial revenue opportunity.
• Those include a still-under-development treatment by Amgen that may help patients keep weight off after they stop using it.

The impact: Novo's stock closed down 4% on Thursday, though it's still up nearly 20% on the year.