Novo Nordisk Drops on Q2 Earnings and Sales Miss Despite Raised Outlook
$Novo-Nordisk A/S (NVO.US)$ shares tumbled 8.4% on Wednesday after the pharmaceutical giant announced disappointing second-quarter results for 2024. The company's flagship drugs, Ozempic and Wegovy, both reported significant sales increases but fell short of analysts' expectations. Ozempic, used for treating type 2 diabetes, saw a 30% rise in sales to $4.26 billion, below the anticipated $4.38 billion. Wegovy, aimed at obesity treatment, recorded a 69% surge to $1.88 billion, missing the forecast of $1.96 billion. The company cited ongoing supply constraints for these drugs, compounded by the FDA's listing of semaglutide and tirzepatide shots as being in shortage. Shares of competitor $Eli Lilly and Co (LLY.US)$ also fell 2.7% to $772.14.
Wegovy Sales Miss Overshadows Raised Sales Outlook
Novo Nordisk's second-quarter results were dominated by lower-than-expected sales of Wegovy, driven by negative price adjustments and supply constraints. Despite these issues, the company raised its overall sales outlook, supported by strong performances from other products like insulin. Operating profit guidance was adjusted due to an R&D impairment. Key catalysts for the second half of the year include phase 3 data for CagriSema in obesity and Wegovy in MASH. The filing for Wegovy in preserved ejection heart failure has been delayed to early 2025.
We are pleased with the sales growth in the first half of 2024, which has enabled us to raise the outlook for the full year. The growth is driven by the increased demand for our GLP-1-based diabetes and obesity treatments, and we continue to reach more patients with our innovative treatments," said Novo Nordisk President and CEO Lars Fruergaard Jørgensen.
Novo Nordisk is striving to meet the high demand for its GLP-1 products. The company now expects its sales to grow in the band of 22-28% compared with the previous guidance of 19-27%, and also expects operating profit to grow in the band of 20-28% compared with the previous guidance of 22-30%.
During an investor call, Chief Financial Officer Karsten Munk Knudsen stated that the company is producing and supplying as much as possible. Given the persistent demand for weight-loss drugs like Wegovy, there's no sign of a decrease in demand. However, analysts are urging the company to enhance its efforts to meet this demand. Today's stock movement reflects investor sentiment on this issue.
Source: Bloomberg, ZACKS
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