Novo Nordisk A/S raised its profit outlook with the drugmaker now shipping five times more introductory doses of its weight-loss drug Wegovy in the US than at the end of last year.
More than 25,000 patients are now starting on the treatment each week in the US, Chief Executive Officer Lars Fruergaard Jorgensen said Thursday. That’s up from about 5,000 in December.
Ramping up production is a key element of Novo’s strategy as it battles Eli Lilly & Co. for supremacy in the weight-loss market. The pharma company is doubling its investment in manufacturing capacity this year to about $6.4 billion — a figure that doesn’t include the planned $11 billion acquisition of three factories originally owned by contract manufacturer Catalent Inc.
Demand for the obesity blockbuster and its sister medicine for diabetes Ozempic prompted the Danish company to increase its forecast on Thursday, saying sales could emerge as much as 27% and operating profit by as much as 30% this year.
The shares fell 2.3% in early trading in Copenhagen. They have surged about 25% this year and almost doubled since the start of 2023.
Wegovy Sales
Price pressure on Wegovy in the US held back the drug’s sales growth in the first quarter. Revenue for the medicine more than doubled to 9.38 billion kroner ($1.35 billion), falling short of analysts’ expectations. Operating profit rose 27% to 31.8 billion kroner last quarter, the company said. Novo said it’s still the global leader in GLP-1 medicines with a market share of 55%.
Wegovy and Ozempic’s cost has been a point of contention in the US since a Yale University study in March estimated that Ozempic could be profitably produced for less than $5 a month. The drug’s list price is $936, with Wegovy at $1,349.
In an April 24 letter to Jorgensen, Senator Bernie Sanders told the Senate Committee on Health, Education, Labor and Pensions is investigating the drugs’ prices.
“Prices have come down linked to volume, breadth of coverage as well as competition, and that will also take place in the remainder of the year,” Chief Financial Officer Karsten Munk Knudsen said on a conference call.
About 80% of Wegovy patients in the US with commercial coverage for the drug are paying $25 or less per month, according to Novo.
The drugmaker will continue to impose some restrictions on access to the lower doses of Wegovy that are used as patients slowly ramp up on the drug.
“We’re not putting a time limit on it,” Negelle Morris, a senior vice president, said in an interview. “We do expect that demand is going to continue to outstrip supply.”
The idea behind restricting lower doses of the drug is to give patients confidence that once they progress to the higher ones — intended to be taken for long periods of time — they will be able to continue treatment. As of this week, the two highest doses of Wegovy are listed as available in a Food and Drug Administration database that tracks drug shortages.
Eli Lilly also raised its outlook this week and predicted that supply and pricing for Zepbound, its competing drugs, will improve this year. The market for obesity treatments may soar above $80 billion by 2030, according to Bloomberg Intelligence.
