Even as it grapples with supply squeezes and the launch of a competitor’s diabetes med, Novo Nordisk isn’t breaking a sweat.
Wednesday, the Danish diabetes powerhouse logged 128 billion Danish kroner (about $17.16 billion) in sales for the first nine months of the year and raised its 2022 forecast to a range of 14% to 17% revenue growth at constant currencies.
The period marked “another very solid quarter” for the company, according to analysts at ODDO BHF, who wrote in a note to clients that Novo’s results were “broadly better than expected.”
Echoing Novo executives’ own comments on a call with investors, the ODDO team said the “very good performance” of Novo’s GLP-1 franchise—comprising meds like Ozempic, Rybelsus, Wegovy and Saxenda—took center stage.
In fact, the double whammy of a demand-fueled Ozempic shortage and contract-manufacturing-related supply constraints on obesity newcomer Wegovy didn’t stop Novo’s GLP-1 roster from posting overall sales growth of 44% for the period, Novo pointed out in a slideshow accompanying its earnings call.
To meet the unprecedented demand for its semaglutide offerings in diabetes and weight loss, Novo is “gradually increasing [its] supply capacity and expect[s] this to be sufficient to support a potential continuation of the current sales growth trajectory,” Karsten Munk Knudsen, the company’s chief financial officer, told analysts Wednesday.
Meanwhile, the company’s updated guidance hinges on the assumption Novo will have all Wegovy doses back on tap in the U.S. by December. Still, that outlook leaves room for “periodic supply constraints and related drug shortages,” Knudsen explained.
After reports that initial demand had outstripped supply last year on Wegovy, Novo in December said the drug would run short after a contract manufacturer in charge of syringe filling halted deliveries because of production issues. In the interim, Novo paused Wegovy sales and marketing.
Now, with the expectation it can resume supply of all Wegovy doses in the U.S. by year-end, Novo plans to restart “broad commercial activities” on the drug “in the beginning of 2023,” Doug Langa, Novo’s executive vice president for North American operations, said on the call.
At the same time, Wegovy’s supply crunch has proved to be a boon for Novo’s earlier weight loss med Saxenda, which continues to reach “all-time high levels” in the newly unlocked global obesity market, Langa added. Saxenda is doing particularly well in Europe, Asia and the Middle East, where the med grew sales 96% for the combined first three quarters of the year.
Ozempic, too, could be getting a boost from potential weight loss applications. Overall, the GLP-1 diabetes drug generated 16.39 billion Danish kroner (about $2.17 billion) during the third quarter.
On the weight loss front, where the company grew sales some 75% to 4.3 billion Danish kroner ($575.74 million), Novo thinks Saxenda’s ascent “really proved that the obesity market is opening up," CEO Lars Fruergaard Jørgensen said on the company’s call Wednesday.
In markets where Novo doesn’t have Wegovy available, it believes it can sustain obesity growth with Saxenda, the CEO said. And Novo expects to see “very nice uptake” for Wegovy once the med relaunches in the U.S. and other markets, he added.
Novo also figures the growing obesity market has enough room for it and rival Eli Lilly to share. Lilly recently launched its dual GIP/GLP-1 drug tirzepatide in Type 2 diabetes as Mounjaro, teeing off a major showdown with Novo’s Ozempic. Further, Lilly’s drug is in the running for an obesity nod that could allow it to compete with Wegovy as early as next spring.
Nevertheless, “the recent competitor launch in GLP-1 has supported continued acceleration in market growth … as well as all time high levels for our portfolio of GLP-1 products during Q3 measured on total prescription,” Langa explained, shrugging off the tirzepatide threat.
As it stands, Novo Nordisk remains “on track” to clinch one-third of the diabetes value market by 2025, Camilla Sylvest, Novo’s executive vice president of commercial strategy and corporate affairs, said on the company’s analyst call.
Still, there’s much work to be done capturing the true scope of potential diabetes patients, Sylvest explained, noting that “while the GLP-1 class is growing more than 40%, GLP-1 penetration remains low at around 4% of total diabetes groups globally.”