Novo Nordisk A/S raised its earnings forecast as the drugmaker now ships five times more introductory doses of the weight-loss drug Wegovy in the US than at the end of last year.
More than 25,000 patients are now starting treatment each week in the United States, CEO Lars Frørgaard Jørgensen said Thursday. That's up from about 5,000 in December.
Production intensification is a key element of Novo's strategy as it competes with Eli Lilly & Co. To excel in the weight loss market. The drugmaker is doubling its investment in manufacturing capacity this year to about $6.4 billion — a figure that does not include the planned one. 11 billion dollars Acquisition of three plants originally owned by contract manufacturing company Catalent Inc.
Demand for the blockbuster obesity drug and its sister diabetes drug Ozempic prompted the Danish company to raise its forecasts on Thursday, saying sales could rise by as much as 27% and operating profits by as much as 30% this year.
Shares fell 2.3% in early trading in Copenhagen. They are up about 25% this year and have nearly doubled since the start of 2023.
WeGovy Sales
Pricing pressure on Wegovy in the US hampered the drug's sales growth in the first quarter. Drug revenues more than doubled to 9.38 billion kroner ($1.35 billion), below analysts' expectations. The company said operating profits rose by 27% to 31.8 billion kroner in the fourth quarter. Novo said it remains the global leader in GLP-1 drugs with a 55% market share.
The cost of Wegovy and Ozempic has been a point of contention in the United States since a Yale University A study conducted in March estimated that Ozempic could be produced profitably for less than $5 per month. The drug's list price is $936, while Wegovy's price is $1,349.
In an April 24 letter to Jorgensen, Sen. Bernie Sanders said the Senate Committee on Health, Education, Labor, and Pensions is investigating drug prices.
“Prices have come down due to volume and breadth of coverage as well as competition, and that will also happen in the remainder of the year,” CFO Carsten Munk Knudsen said on a conference call.
About 80% of Wegovy patients in the United States with commercial coverage for the drug pay $25 or less per month, according to Novo.
The drugmaker will continue to have some restrictions on access to the lower doses of Wegovy being used as patients slowly increase their use of the drug.
“We don't put a time limit on it.” Nigel MorrisThe senior vice president said in an interview. “We expect demand to continue to outpace supply.”
The idea behind restricting lower doses of the drug is to give patients confidence that once they progress to higher doses — meant to be taken for long periods of time — they will be able to continue treatment. As of this week, the top two doses of Wegovy are listed as available in an FDA database that tracks drug shortages.
Eli Lilly also raised its forecasts this week and expected supply and pricing for Zepbound, its competing drug, to improve this year. The market for obesity treatments could rise to more than $80 billion by 2030, according to Bloomberg Intelligence.