Shares of Danish pharmaceutical giant Novo Nordisk Shares fell 4% on Friday, extending Thursday’s 2.7% loss, as analysts scrutinized details of the company’s first-quarter results and focused on potential rival weight-loss treatments.
That put the stock on track for its biggest one-day drop since October 2023, according to LSEG data.
The company reported that sales of its blockbuster injectable weight loss drug Wegovy more than doubled to 9.38 billion Danish kroner ($1.4 billion). Novo Nordisk, which also makes diabetes treatment Ozempic, said rising sales offset a small price drop.
Novo Nordisk expects prices to fall further as new entrants enter the market, Chief Financial Officer Karsten Knudsen said on a media call, adding that the company had not seen much evidence of Wegovy users switching to other options. Competitor treatments.
Analysts expect sales of the weight-loss drug to be higher this quarter, and some pointed to a one-time accounting adjustment as the reason Novo Nordisk raised its 2024 sales growth and operating profit forecasts.
“While we continue to view Novo as a wide-moat company with strong intangibles in its cardiometabolic business, we believe high demand and supply shortages for the obesity drug are has caused the stock price to rise above its intrinsic value.
Novo Nordisk overtakes French luxury group as demand for weight loss treatment surges LVMH Last year it became Europe’s most valuable company. Shares are up 49% in 2023 and 25% so far this year.
Mizuho Healthcare equity strategist Jared Holz told CNBC’s “Fast Money” on Thursday that the sales numbers were “a little bit light, ahead of expectations… Novo still faces these supply challenges.”
Stifel analysts lowered their target price on the stock to 950 crowns from Friday’s 960 crowns.
Meanwhile, shares of weight-loss drug makers generally fell after Amgen said it was “very pleased” with preliminary trial results of its injectable obesity treatment MariTide.
Novo Nordisk and the U.S. giant both face potential increase in competition Eli Lilly and CompanyThis week has also boosted its prospects as more weight-loss entrants emerge, changing what is essentially a two-horse race.
As a result, both companies are researching new potential weight-loss treatments to maintain their edge.
“When we look at the overall space, Novo and Lilly dominate because they are already good existing players in the diabetes space. This obesity market is very beside the point, and it’s very simple for them to move a very similar patient population to obesity.” ,” Holtz said.
Over time, a new player like Amgen may capture 5% to 10% of the market, or an entire competitor may capture 10%, but Eli Lilly and Novo Nordisk (Novo Nordisk) advances “will make it possible.”
Correction: Wegovy’s sales more than doubled to 9.38 billion Danish kroner ($1.4 billion), the company reported. An earlier version misstated the dollar figure. Karen Andersen is a strategist at Morningstar. An earlier version misspelled her name.
About The Author
