Novo Nordisk Cuts Sales Forecast Amid Weaker Wegovy Growth

LONDON, July 28 (Reuters) – Danish pharmaceutical giant Novo Nordisk announced on Tuesday that it has lowered its full-year sales and profit guidance due to weaker growth expectations for its Wegovy obesity drug in the crucial U.S. market.

Shares fell 17% shortly after the announcement, trading at 12:30 p.m. London time (7:30 a.m. ET). The company adjusted its sales growth forecast to between 8% and 14% at constant exchange rates, a reduction from its previous target of 13% to 21%. Annual operating profit growth expectations also dropped from 16% to 24% to a new range of 10% to 16%, at constant exchange rates.

According to the company, the revised outlook is largely driven by weaker second-half sales forecasts in the U.S. for both its Wegovy weight loss drug and Ozempic diabetes treatment. In a statement, Novo Nordisk noted, “For Wegovy in the U.S., the sales outlook reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion, and competition.”

In recent weeks, there have been signs of an increase in new prescriptions for Wegovy, rising by about 33% since the FDA‘s ban on compounded versions took effect on May 22. This increase amounted to 181,200 prescriptions in the week that ended July 18, according to IQVIA data shared with Reuters.

However, despite the uptick, competitors remain strong. Eli Lilly‘s Zepbound exceeded Wegovy prescriptions by nearly 175,000 in late May, though by mid-July, that gap had narrowed to about 133,000.

Investors are concerned as confidence in Novo has waned following the exit of Chief Executive Lars Fruergaard Jorgensen in May, as well as the substantial drop in stock price from its peak in 2024. There is anticipation for the company’s quarterly earnings report on August 6, which could provide further clarity on the firm’s direction.

Berenberg analyst Kerry Holford expressed skepticism, stating, “We thought this trajectory change in new prescriptions would get the shares moving, but not so far.” Meanwhile, the inability of IQVIA’s prescription data to capture direct-to-consumer sales through NovoCare leaves a gap in understanding full performance.

Despite current market sentiment being low, there are analysts who remain optimistic about Novo’s long-term growth potential, highlighting the recent tactical efforts to boost sales, such as a limited-time discount on Wegovy and improved insurance coverage from CVS Health.

As Novo Nordisk navigates these challenges, capturing patients who turned to compounded solutions will be essential to meet their revised sales targets. The company noted that the FDA’s determination that Wegovy is no longer in shortage prompted the ban on competitors, potentially paving the way for regained market share.