Novo Nordisk cautioned on Wednesday that it expects continued competitors this 12 months from copycat variations of its Wegovy weight problems drug, because it battled stress from compounding pharmacies in the USA and rival Eli Lilly.
The Danish drugmaker, which grew to become Europe’s most useful firm price $650 billion final 12 months on gross sales of its blockbuster weight-loss drug, is dealing with a pivotal second as Wegovy loses market share, particularly within the U.S.
Final week, competitors from compounders — who make copycat medicines primarily based on the identical components as Wegovy — prompted the corporate to chop its full-year gross sales and revenue outlook. That took traders abruptly and wiped $95 billion off Novo’s market worth.
On a media name on Wednesday, outgoing CEO Lars Fruergaard Jorgensen stated the copycat market has “equal measurement to our enterprise” and compounded variations of Wegovy have been bought at a “a lot lower cost level.”
In Might, the corporate stated it anticipated most of the roughly a million U.S. sufferers utilizing compounded GLP-1 medicine to modify to branded therapies after a U.S. Meals and Drug Administration (FDA) ban on compounded copies of Wegovy took impact on Might 22, and it anticipated compounding to wind down within the third quarter.
Nonetheless, CFO Karsten Munk Knudsen stated on Wednesday that a couple of million U.S. sufferers have been nonetheless utilizing compounded GLP-1s and that Novo’s lowered outlook has “not assumed a discount in compounding” this 12 months.
ENCOURAGING PRESCRIPTION DATA
Knudsen reiterated that the corporate was pursuing a number of methods, together with lawsuits towards compounding pharmacies, to halt illegal mass compounding of its blockbuster drugs.
Jorgensen stated the corporate was inspired by the most recent U.S. prescription information for Wegovy. Whereas Novo’s weight-loss drug was overtaken earlier this 12 months by rival Lilly’s Zepbound when it comes to U.S. prescriptions, that lead has narrowed up to now month.
Second-quarter gross sales of Wegovy rose by 36% in the united statesand greater than quadrupled in markets exterior the U.S. in comparison with a 12 months in the past, Novo stated.
Barclays analysts stated in a observe that whereas Wegovy’s U.S. pricing held regular within the second quarter, the corporate expects deeper erosion in the important thing U.S. market within the second half, attributable to a better portion of gross sales anticipated from the direct-to-consumer or cash-pay channel, in addition to increased rebates and reductions to insurers.
Knudsen stated it’s increasing its U.S. direct-to-consumer platform, NovoCare, launched in March, and should must pursue comparable “money gross sales” on to sufferers, exterior of insurance coverage channels, in some markets exterior the U.S.
COST CUTS
The corporate reiterated its full-year earnings expectations on Wednesday after final week’s revenue warning diminished its 2025 gross sales outlook, and named veteran insider Maziar Mike Doustdar to take over from Jorgensen on Thursday.
Jorgensen stated Novo was appearing to “guarantee efficiencies in our price base” as the corporate introduced on Wednesday it will terminate eight R&D initiatives. Doustdar stated final week the corporate will pursue “financial savings and efficiencies.”
“There appears to be a bigger R&D clean-out than typical, however we have no idea if this displays a strategic re-assessment or only a coincidence,” analysts at Jefferies stated in a observe.
Buyers have questioned whether or not Novo Nordisk can keep aggressive within the booming weight-loss drug market. A number of fairness analysts have lower their worth targets and suggestion on the inventory since final week.
Shares in Novo plunged 30% final week — their worst weekly efficiency in over twenty years and have been down 1.8% in morning buying and selling on Wednesday.
Gross sales rose 18% within the quarter to 76.86 billion Danish crowns ($11.92 billion), beneath analysts’ preliminary expectations.
—Jacob Gronholt-Pedersen and Maggie Fick, Reuters
