Novo Nordisk is in luck. A few days ago, it was known that the creators of the anti-obesity drugs Ozempic and Wegovy, both from the Danish pharmaceutical company, had been awarded the Princess of Asturias Award for Scientific and Technical Research 2024. Added to this is the good performance of the company on the stock market: In the last twelve months its shares have appreciated more than 80%.
The rise to stock market stardom began much earlier. It was in mid-2021 when Novo Nordisk shares began their climb. Precisely in June of that year, the drug regulatory agency of USA (FDA) authorized the use of Wegovy to treat obesity.
Sales of this treatment and Ozempic were higher than the company expected. In fact, Novo Nordisk raised its forecasts for the last quarter of the year taking into account “the increase in Ozempic’s market share and sales of obesity products,” the Dane explained in a statement.
A few days after updating his outlook for 2021, European regulatory authorities recommended approval of Wegovy for the treatment of obesity. Thus began the stock market and financial climb of Novo Nordisk. From mid-2021 to the current date, the pharmaceutical company’s shares have appreciated more than 280%.
In fact, in the last twelve months alone, the price of the Danish company’s shares has skyrocketed by 80%. On June 14, 2023, the laboratory’s shares were trading at 545.6 Danish crowns (73.1 euros at the current exchange rate). One year later, Novo Nordisk closed the trading day at 991 Danish crowns (132.6 euros).
The success of anti-obesity treatments has led Novo Nordisk to be the largest capitalized on the European stock market, ahead of ASML and Louis Vuitton, reaching $483,146 million. Two American management companies stand out among its shareholderssuch as Capital Group, with 3.33% of the shares, and Vanguard, with 2.75%, and the Norwegian sovereign wealth fundNorges Bank, with 2.5% of the shares.
As for the stock’s potential, LSEG’s most optimistic analysts predict that Novo Nordisk share price may reach 1,100 DKK (147.4 euros). This is the forecast made, for example, by Rune Majlund Dahl (DNB Markets). For their part, Michael Nedelcovych (TD Cowen) and Henrik Laustsen (Jyske Bank) place the share at around 1,050 Danish crowns.
Novo accounts
At the end of 2023, Novo Nordisk increased its net profit by 51%, driven by the good performance of its weight loss therapies. Specifically, it earned 83,683 million crowns (11,225 million euros) last year.
In fact, the diabetes and obesity division increased its annual sales by 37.5%, up to 215,098 million crowns (28,853 million euros), including a 60.2% growth in income from the marketing of Ozempicup to 95,718 million crowns (12,840 million euros), while Wegovy’s sales quintupledup to 31,343 million crowns (4,204 million euros).
Already in 2024, according to the latest published results corresponding to the first quarter of the year, Novo Nordisk’s star therapy, Ozempicachieved sales worth 3,728.2 million euros (27,810 million Danish crowns). This represents an increase of 42% compared to the first quarter of 2023. Figures that have helped this therapy rank as the third best-seller in the past year.
For its part, wegovy (recently approved for marketing in Spain) achieved sales of 1,257.17 million euros (9,377 million Danish crowns). Close Saxendawith 222.29 million euros (1,658 million Danish crowns).
Market forecasts
Medications to treat obesity have become the goose that lays the golden eggs. Sales of these drugs do not stop rising. And the forecast is that they will reach 100,000 million dollars (92,114 million euros) in 2030.
This is the forecast made by Goldman Sachs Research. By early 2023, the global anti-obesity drug market will reach $6 billion. “By 2030, it could grow more than 16 times to reach $100 billion,” the organization explains in its analysis. Wait to Novo Nordisk, together with Lilly, are the laboratories that dominate this market.
In the short term, Ozempic will be the drug that dominates this market, but in the long term, Mounjaro will take its place. This is the forecast made by the consulting firm GlobalData.
“Ozempic is expected to lead sales in the near term, having obtained its first approval in May 2017, five years before Mounjaro. However, Mounjaro’s sales forecast considers its superior clinical efficacy, positioning it to surpass Ozempic in 2027 and excel in terms of annual growth rates,” explains Kevin Marcaida, pharmaceutical analyst at GlobalData.
Mounjaro is expected to achieve a compound annual growth rate of 36%, surpassing Ozempic’s 6.5%, over the next seven years. Mounjaro’s strong outlook is primarily attributed to FDA approval in November 2023.
