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

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Surging sales of weight loss and diabetes drugs Wegovy and Ozempic prompted Europe’s largest company Novo Nordisk to raise full-year revenue and profit guidance.

The Danish drugmaker now expects sales to grow 32% to 38% this year on a constant currency basis, up from its previous forecast of 27% to 33%.

Novo Nordisk expects operating profit growth in 2023 to be 40% to 46%, up from previous guidance of 31% to 37%.

Huge demand for Ozempic, a diabetes drug often taken off-label as a weight loss drug, and Wegovy, which targets obesity, has helped Novo Nordisk become Europe’s largest company by market capitalization. Celebrity adoption of these drugs has helped raise awareness that they can provide more significant weight loss than previous treatments.

The company said the new forecast reflects higher expectations for Ozempic sales in the United States.

In the third quarter, sales increased by 38% year-on-year, and operating profit increased by 47%.

Shares in Novo Nordisk, which recently became Europe’s largest company by market capitalization, rose 3.2% to $102 on Friday.

The company’s shares rose earlier this week after the company halted a trial to study how semaglutide, the active ingredient in Ozempic and Wegovy, could slow the onset of kidney disease.

Analysts said it was a good sign that the trial, which was due to give results late next year, was stopped early due to efficacy. Jefferies analyst Akash Tewari said this supports the case for using these drugs to treat patients with type 2 diabetes.

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

Novo Nordisk’s shares surged as much as 16% in August after it released data showing Wegovy reduced the risk of cardiovascular events such as heart attack or stroke.

The company dominates the market for next-generation obesity treatments and may soon face competition from Eli Lilly’s Mounjaro.

The drug is currently approved to treat diabetes, and Eli Lilly is seeking approval to treat obesity after a late-stage trial showed it could help patients lose nearly a fifth of their body weight.