Novo Nordisk A/S shares gained on May 7, 2025, on expectations that competition for its Wegovy obesity shot will subside later this year. The stock rose as much as 4.4% in early trading as investors looked past a trimmed financial forecast from the Danish drugmaker.
Shares of Novo Nordisk climbed 5% on Wednesday after it said sales of its blockbuster Wegovy weight loss drug were seen improving in the second half of the year as the availability of copycat compounded drugs is phased out. The Danish pharmaceutical giant reported lower-than-expected first-quarter sales of its flagship obesity drug and trimmed its full-year sales growth forecast as alternative versions of the drug have eaten away at its U.S. market share.
However, CEO Lars Fruergaard Jørgensen told CNBC that the end of a drug shortage ruling by the Food and Drug Administration (FDA) would allow sales to pick up again later in the year. "Compounders took a part of our business away," Jørgensen told CNBC's Charlotte Reed. "We now expect that compounding will be knocked off, so to say, and we get that business growth going forward," he added.
Shares of Novo Nordisk rose 5.77% by 9:40 a.m. London time. The drugmaker on Wednesday reported a better-than-expected rise in first-quarter net profit of 29.03 billion Danish kroner ($4.4 billion) for the three-month period to the end of March, ahead of the 27.8 billion Danish kroner forecast by analysts in an LSEG poll.
Sales of the company's popular Wegovy obesity drug rose 83% annually at constant exchange rates to 17.36 billion Danish kroner, coming in slightly below the 18.51 billion Danish kroner anticipated by analysts in a Factset poll Tuesday, May 6, 2025. Overall revenues at Novo Nordisk — which also produces diabetes and rare disease treatments — rose 18% to 78.09 billion Danish kroner versus an expected 78.18 million Danish kroner.
For 2025, the company said it now sees sales growth of 13% to 21% at constant exchange rates, below the 16% to 24% previously forecast in February. Operating profit growth is forecast at 16% to 24%, versus 19% to 27% previously. Jørgensen attributed the reduced forecast to rising competition from compounded weight loss drugs in the U.S. in the early part of the year.
"In the first quarter of 2025, we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments," Jørgensen said in a statement. "However, we have reduced our full-year outlook due to lower than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the U.S."
U.S. compounding pharmacies had been permitted to make legal copies of Novo's Wegovy and diabetes drug Ozempic under a drug shortage ruling by the FDA. The FDA declared that shortage over in February, giving compounding pharmacies until May 22 to cease selling copies of the drug. As such, Novo said it expects sales of compounded alternatives to ease soon, and reiterated that it would pursue companies that continue to unlawfully distribute such copycat drugs.
"Following the U.S. FDA removal of semaglutide injectables from the FDA drug shortage list, the sales outlook assumes a reduction in patients on compounded GLP-1 treatment during the second half of 2025," the company said.
The results come amid runaway demand for the drugmaker's blockbuster GLP-1 weight loss treatments, which work by mimicking a hormone called glucagon-like peptide-1 to suppress appetite. However, the company has struggled to shake negative sentiment following a series of disappointing trial results for its next-generation obesity drug candidate CagriSema.
Novo Nordisk confirmed Wednesday that it plans to file for regulatory approval of CagriSema in the first quarter of 2026. Meanwhile, it has applied for regulatory U.S. approval of an oral version of its existing semaglutide treatment, which it said has the potential to be "the first oral GLP-1 treatment for obesity."
Competition is heating up in the weight loss drug market, with pharma firms including Roche, AstraZeneca, and AbbVie all currently developing potential new candidates. Novo's key U.S. rival Eli Lilly reported an expectation-beating 45% rise in first-quarter sales, though revenues for its popular weight-loss drug Zepbound came in slightly lower than expected on lower drug pricing. The U.S. drugmaker also lowered its full-year profit guidance due to charges related to a recent cancer treatment deal, sending shares lower.
Investors breathed a sigh of relief on Wednesday as shares in Novo Nordisk rose 3% in early trading, despite the drugmaker trimming its sales and profit forecasts for 2025. The downgrade, which had largely been anticipated, brings an end to a four-year streak of upgrades driven by booming demand for its obesity drug Wegovy.
While first-quarter sales of the treatment fell short of expectations, the results were better than many feared. Sales of Wegovy dropped 13% from the previous quarter to 17.36 billion Danish Krone (£1.98 billion), missing analyst estimates. Still, first-quarter earnings before interest and tax rose 22% to 38.79 billion Krone, beating forecasts.
Novo now expects 2025 sales growth of 13–21% in local currencies, down from its previous range of 16–24%. Forecast operating profit growth has also been cut to 16–24%, compared with earlier guidance of 19–27%. The stock was up 13.45 DKK at 454.5 DKK.
On May 7, 2025, Novo Nordisk cut its sales forecasts for the first time since the launch of its Wegovy weight-loss drug four years ago, but its shares rose about 6% as the company anticipates a recovery in its biggest market in the U.S. Booming sales of Wegovy helped to make Novo Europe’s most valuable listed company, worth $615 billion at its peak. However, prescriptions in the United States, its biggest market, have not grown since February despite Novo having increased supplies of Wegovy to meet demand.
Novo's market value has halved to about $310 billion. But comments from Novo’s management about a recovery in Wegovy sales in the coming months due to the looming shutdown of production of compounded copies of Wegovy that have eaten market share helped boost its shares, which traded 5.9% higher at 0825 GMT.
Investors have been concerned that Novo is losing its lead to Eli Lilly, whose U.S. prescriptions for Zepbound obesity shot have surpassed Wegovy since mid-March. Novo Nordisk said first-quarter sales of its first-to-market weight-loss drug Wegovy were 17.36 billion Danish crowns ($2.64 billion), declining 13% from the previous quarter, and below the 18.7 billion crowns expected by analysts.
Pharmacies that have been allowed to produce compounded copies of Wegovy and Ozempic have been given until May 22, 2025, to stop, following the FDA’s assessment that the drugs are no longer in short supply. Novo estimates that around one-third of the U.S. obesity drug market has been "captured" by compounding pharmacies.
Novo reported first-quarter earnings before interest and taxation of 38.79 billion crowns, compared with the 37.20 billion forecast in a company-compiled consensus based on 26 analysts and up 22% from a year ago.
