Danish pharmaceutical giant Novo Nordisk, maker of Ozempic and Wegovy, announces a significant year-on-year increase in its net profits and sales for the first quarter of 2024.
The company recorded a net profit of 3,404 million euros, compared to 2,654 million euros in the same period last year. It exceeds the 3,093 million euros anticipated by analysts.
Earnings per share also rose to €0.76 from €0.589 a year earlier, which would indicate a solid surprise of 8.75% relative to market expectations.
unexpected sales
Sales for the quarter reached 8,747 million euros, 22% more than the 7,135 million euros a year ago, 8,490 million euros predicted by stock market analysts.
Diabetes and obesity
This growth was primarily driven by strong sales of its diabetes drug Ozempic and obesity treatment Wegovy, which together contributed significantly to total revenue.
The obesity treatment product portfolio, particularly with Wegovy, recorded a sales increase of 106% compared to the same quarter in 2023. Meanwhile, the diabetes care segment also grew solidly, a 22% year-on-year.
However, since the last quarter of 2023, sales of diabetes and obesity care products have stabilized.
Great success in the United States and Canada despite the prices
Sales in North America, especially the United States, showed substantial growth (34% and 35%, respectively), indicating strong market penetration and acceptance of Novo Nordisk products in these regions.
Criticism has immediately appeared in the United States for the sale price that exceeds $900 for a medicine that at cost price does not exceed 5 euros.
In Canada they respond to advertising in public places for a pharmaceutical product.
Looking ahead to 2024, Novo Nordisk has further improved its financial prospects. The company now expects sales growth of 19% to 27% and operating profit growth of 22% to 30% at constant exchange rates, reflecting a more optimistic outlook compared to its previous forecast.
A rising demand
lars Fruergaard Jørgensenpresident and CEO of Novo Nordisk, expressed elation about the quarter’s results, attributing them to increased demand for the company’s GLP-1-based treatments for diabetes and obesity.
“Our innovative treatments benefit more patientsand the agreement to acquire three Catalent manufacturing plants will allow us to serve a significantly greater number of people suffering from these diseases in the future,” he said.
New trials to lose weight
The company also highlighted recent advances in its investigation and development, in particular the positive results of a renal trial with semaglutide and the expansion of Wegovy’s US cardiovascular risk reduction label.
Novo Nordisk is now looking to expand its production capacity to meet the growing demand for weight loss pharmaceuticals. The company announced in February 2024 an agreement to acquire three finishing plants from Novo Holdings A/S, following Novo Holdings A/S’s acquisition of Catalent, Inc. This acquisition is expected to be completed by the end of 2024 and represents a significant boost to the company’s manufacturing capabilities.
Not everything is going to be up
However, despite the company’s good results, the market response made it Novo Nordisk shares fell 2.5% during Thursday morning trading. Jefferies analysts highlighted the moderate increase in sales and earnings forecasts for 2024, suggesting a possible consensus improvement of between 1% and 2% at most.
Despite this initial setbackthe Danish pharmaceutical giant maintains its position as the largest company in Europewith a market capitalization of €534 billion, putting it ahead of Bernard Arnault’s LVMH Moét Hennessy by around €150 billion.
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