Novo Nordisk raises profit guidance as weight-loss drug sales boom

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Soaring sales of weight loss and diabetes drugs Wegovy and Ozempic have pushed Europe’s largest company Novo Nordisk to raise its full-year revenue and profits guidance.

The Danish drugmaker now expects sales growth this year of 32 to 38 per cent, above its previous prediction of 27 to 33 per cent, at constant exchange rates.

Novo Nordisk forecasts operating profit growth for 2023 to be 40 to 46 per cent, up from previous guidance of 31 to 37 per cent.

Huge demand for Ozempic, a diabetes drug that is often prescribed off-label for weight loss, and Wegovy, which targets obesity, has helped Novo Nordisk become Europe’s largest company by market capitalisation. Celebrity adoption of the drugs has helped drive awareness that they can offer much more significant weight loss than previous treatments.

The company said the new forecasts reflected higher expectations for the sales of Ozempic in the US.

In the third quarter, it reported year-on-year sales growth of 38 per cent and operating profit growth of 47 per cent.

Shares in Novo Nordisk, which recently became Europe’s largest company by market capitalisation, added 3.2 per cent to $102 on Friday.

The stock rose earlier this week after the company stopped a trial looking at how semaglutide, the active ingredient in Ozempic and Wegovy, could slow the onset of chronic kidney disease.

Analysts said it was a good sign that the trial had been stopped early for efficacy, when it had been due to give results at the end of next year. Akash Tewari, an analyst at Jefferies, said it bolstered the rationale for using these drugs to treat type 2 diabetics.

The trial is part of Novo Nordisk’s plan to invest in collecting more evidence to show healthcare systems that the drugs have a significant impact on people’s long-term health and prove they are worth paying for.

Novo Nordisk published data in August that showed Wegovy cut the risks of cardiovascular events such as heart attacks or strokes, prompting shares to soar as much as 16 per cent.

The company, which dominates the market for the new generation of obesity treatments, is likely to face competition soon from Eli Lilly’s Mounjaro.

The drug is at present approved for diabetes and Lilly is applying for approval for it to be used for the treatment of obesity after a late-stage trial showed it helped patients lose almost a fifth of their body weight.