The stock of the Danish pharmaceutical company Novo Nordisk fell after second-quarter revenue and profit fell short of expectations. Despite increasing sales of weight-loss and diabetes medications like Ozempic and Wegovy, the company failed to meet analysts' forecasts.
In the quarter until the end of June, revenues increased by 25 percent to 68 billion Danish kroner (9.9 billion US dollars). However, analysts had expected an increase of 26.7 percent. The net profit amounted to 20.5 billion Danish kroner, which was below the forecast of 21.3 billion Danish kroner.
Novo Nordisk, the leading provider in the growing market for obesity medications, is under increasing pressure from competitors like Eli Lilly and is also facing supply chain challenges. The company's shares fell by more than 6 percent in Copenhagen on Wednesday before recovering to a 2 percent loss.
In recent months, the company's stocks have recorded a decline of approximately 12 percent, after competitor companies such as Roche presented data on their own weight loss medications.
Lars Fruergaard Jørgensen, President and CEO of Novo Nordisk, stated to the Financial Times that competition does not pose a significant concern for him and that the company will continue to ramp up production. "There is so much focus on obesity that the markets have become a bit jittery in recent days. When you see a miss, there are many gut reactions," Jørgensen said.
Sure, here's the translation of the heading into English:
"Sales of Wegovy reached 11.7 billion Danish kroner in the quarter, significantly below analysts' estimates of 13.6 billion Danish kroner. Chief Financial Officer Karsten Munk Knudsen described the figures as a 'quarterly fluctuation.'
Part of the decline was due to a misjudgment of discounts by US Pharmacy Benefit Managers, who negotiate prices between pharmaceutical companies and insurers and can receive payments from manufacturers when their medications are dispensed to patients.
The delivery of sufficient quantities to meet demand remains a challenge. The company anticipates "continued periodic delivery bottlenecks" worldwide.
Novo Nordisk has significantly invested in its supply chain as demand for its products has led to shortages. In the U.S., weekly prescriptions rose from over 130,000 in the first quarter to over 200,000 in the second quarter. Patients begin with a low-dose version of Wegovy and gradually increase the dose.
Higher doses of Wegovy were recently removed from the US lists of medications that are in short supply, indicating a relaxation of shortages. However, the company continues to limit the number of doses for new patients to prioritize the supply for existing users.
Jørgensen emphasized: "We want patients to be able to trust that they do not need to worry about a shortage of any of the later doses when they start with a Novo Nordisk initial dose.
The company also adjusted its annual forecast. Revenue is now expected to increase by 22 to 28 percent at constant exchange rates, compared to the previous forecast of 19 to 27 percent. Expectations for operating profit have been lowered to an increase of 20 to 28 percent, down from the previous forecasts of 22 to 30 percent. This is partly due to a write-down of 5.7 billion Danish kroner for a failed drug against chronic kidney disease.
Emily Field, pharmaceutical analyst at Barclays, commented that the results were not the "picture-perfect quarter we had hoped for," but "the overwhelming message" from the company was that the increase in deliveries was "on track.
