Novo Nordisk Reduces Profit Outlook Amid Slowing Wegovy Sales in the US

Denmark’s Novo Nordisk has adjusted its annual revenue and profit forecasts downward following weaker-than-expected sales of its weight-loss drug Wegovy in the United States. The company, which became Europe’s most valuable listed firm last year with a market capitalisation of $615 billion (£461 billion), has seen its valuation decline substantially to approximately $310 billion. This drop coincides with a stagnation in US prescriptions for Wegovy since February, despite increased production to meet demand.

Wegovy, the first in a new class of anti-obesity drugs known as GLP-1s, experienced a 13 per cent fall in sales during the first quarter of the year. Revenues from the injectable drug totalled 17.36 billion Danish kroner (£1.98 billion) from January to March, falling short of the projected 18.7 billion kroner. This softer performance also reflects a broader challenge as the company contends with mounting competition from Eli Lilly, the US-based rival producing alternative treatments such as Mounjaro and Zepbound.

In response to the tightening market dynamics, Novo Nordisk recently negotiated a deal with a US healthcare provider to offer Wegovy at a discounted price of $499 monthly. Comparatively, compounded variations of GLP-1 medications, which emerged in response to regulatory shortages, are available at significantly lower costs starting at $199 monthly. Although the compounding practice has faced regulatory scrutiny, enforcement remains a pressing question.

The company reported an 18 per cent rise in overall revenues and a 16 per cent increase in pre-tax profits for the first quarter at constant exchange rates. However, these results were overshadowed by the revised full-year outlook, projecting sales growth at 13 per cent to 21 per cent, down from the original forecast range of 16 per cent to 24 per cent. Operating profits are now estimated to grow by 16 per cent to 24 per cent, recalibrated from the earlier projection of 19 per cent to 27 per cent.

Industry analysts caution that intensified competition will remain a hurdle for the Danish firm as rivals, particularly Eli Lilly, work to expand their presence in the obesity treatment market. The race to develop next-generation GLP-1 drugs is heating up, with other pharmaceutical companies entering clinical trials for competing products. The emergence of cheaper generic treatments is also expected to add pressure on Novo Nordisk’s profit margins.

Meanwhile, Novo Nordisk has encountered additional challenges stemming from US political and regulatory changes. Adjustments to executive orders under the former Trump administration, including measures to expedite factory approvals and crusades against diversity, equity, and inclusion goals, have forced the company to adapt its operational strategies within the US market. Despite these headwinds, the company’s chief executive maintains a positive outlook for global sales growth driven by innovative product strategies.