By Jacob Gronholt-Pedersen and Maggie Fick
COPENHAGEN (Reuters) -Novo Nordisk cautioned on Wednesday that it expects continued competition this year from copycat versions of its Wegovy obesity drug, as it battled pressure from compounding pharmacies in the United States and rival Eli Lilly.
The Danish drugmaker, which become Europe’s most valuable company worth $650 billion last year on sales of its blockbuster weight-loss drug, is facing a pivotal moment as Wegovy loses market share, especially in the U.S.
Last week, competition from compounders – who make copycat medicines based on the same ingredients as Wegovy – prompted the company to cut its full-year sales and profit outlook.
That profit warning took investors by surprise and wiped $95 billion off Novo’s market value.
In May, the company said it expected many of the roughly one million U.S. patients using compounded GLP-1 drugs to switch to branded treatments after a U.S. Food and Drug Administration (FDA) ban on compounded copies of Wegovy took effect on May 22, and it expected compounding to wind down in the third quarter.
However, on a call with journalists on Wednesday, CFO Karsten Munk Knudsen said more than one million U.S. patients were still using compounded GLP-1s and that Novo’s lowered outlook has “not assumed a reduction in compounding” this year.
Knudsen reiterated that the company was pursuing multiple strategies, including lawsuits against compounding pharmacies, to halt unlawful mass compounding of its blockbuster medicine.
The company reiterated its full-year earnings expectations on Wednesday after last week’s profit warning reduced its 2025 sales outlook, and named veteran insider Maziar Mike Doustdar to take over from CEO Lars Fruergaard Jorgensen from Thursday.
‘SAVINGS AND EFFICIENCIES’
Jorgensen said in a statement that the company was acting to “ensure efficiencies in our cost base while continuing to invest in future growth.”
Doustdar said last week the company will pursue “savings and efficiencies.”
Investors have questioned whether Novo Nordisk can stay competitive in the booming weight-loss drug market. At least five major equity analysts have cut their price targets on the stock since last week.
Shares in Novo plunged 30% last week – their worst weekly performance in over two decades and were down 0.3% in morning trading on Wednesday.
Sales of Wegovy rose 67% to 19.53 billion crowns in the second quarter from a year ago, the company said.
Novo reported second-quarter sales of 76.86 billion Danish crowns ($11.92 billion), up 18% from last year, but below analysts’ initial expectations.
It confirmed a 2025 sales growth forecast of between 8% and 14%, which was cut in a profit warning last week from the previous 13%-21%. It was the second time this year that the company has cut its sales forecast.
Second-quarter earnings before interest and taxation (EBIT) stood at 33.45 billion crowns, up 29% from a year ago.
Barclays analysts said in a note that while Wegovy’s U.S. pricing held steady in the second quarter, the company expects deeper erosion in the key U.S. market in the second half due to a greater portion of sales expected from the direct-to-consumer or cash-pay channel, as well as higher rebates and discounts to insurers.
(Reporting by Jacob Gronholt-Pedersen and Maggie Fick; Editing by Adam Jourdan, Terje Solsvik, Jane Merriman and Bernadette Baum)
