By Jacob Gronholt-Pedersen, Maggie Fick and Bhanvi Satija
COPENHAGEN (Reuters) -Wegovy-maker Novo Nordisk trimmed its full-year profit and sales forecasts on Wednesday as growth slows, but investors saw some cheer in a better-than-expected Medicare pricing deal that helped temper a share price slide.
Novo is in a tumultuous period marked by a share price plunge and slowing sales growth, which have prompted a change of CEO and a board shake-up. It’s also in a takeover battle with U.S. rival Pfizer for biotech Metsera.
CEO Mike Doustdar, who took over in August and is driving a turnaround plan, is trying to regain ground in a fiercely competitive obesity drug market against U.S. rival Eli Lilly, which posted far stronger results last week.
Doustdar told reporters Novo was expanding its direct-to-consumer sales in the U.S. and was confident it would win a bidding war with Pfizer for Metsera. Novo has bid $10 billion for the biotech’s early stage obesity drugs to bolster its pipeline.
“Novo is taking a big risk,” said Markus Manns, portfolio manager at Novo shareholder Union Investment, referring to the unusual deal structure where it would pay billions of dollars up-front for Metsera without gaining full control.
“Does this mean Novo has changed their approach towards risk management? Are they willing to take more risks in general?”
MEDICARE PRICING ‘BETTER THAN FEARED’
Novo cut its 2025 guidance for the fourth time this year, citing a weaker outlook for blockbuster obesity and diabetes drugs Wegovy and Ozempic.
But it also said it had agreed a Medicare price for semaglutide – the active ingredient in both drugs – under the U.S. Inflation Reduction Act, removing a major uncertainty for investors who had expected the Trump administration to take a tougher stance.
Novo did not disclose the price but said that if applied this year it would have had a “low-single-digit negative impact on sales”.
JP Morgan analysts estimated that implies an annual sales hit of about 6 billion Danish crowns ($937 million), calling it “better than feared”.
“The shares could ultimately be in positive territory today,” they wrote in a note. Novo’s stock seesawed on Wednesday with an initial sharp drop, reversing course then dipping back to trade about 1% down by 1300 GMT.
THE RISE AND FALL OF NOVO NORDISK
Fuelled by surging demand for Wegovy – first in a drug class called GLP-1 receptor agonists – Novo became Europe’s most valuable firm.
But sales growth has sharply declined amid competition from Lilly and compounded copycat drugs made from the same ingredients as branded drugs.
Novo’s market value peaked in June 2024 at around $650 billion, but has since fallen by about 70%, returning to levels seen around Wegovy’s launch in 2021.
The company now expects full-year operating profit – measured in local currencies – to grow between 4% and 7%, down from 4%-10% previously. It trimmed its full-year sales growth to between 8% and 11%, down from 8%-14%.
It expects sales growth to slow further in the fourth quarter, after growing at the slowest pace since early 2022 in the third quarter at 11%, just shy of an estimate of 11.4%.
Novo said unlawful mass compounding continued in the quarter and that weekly prescriptions in the U.S. for Wegovy fell by 10,000 over the last three months to around 270,000.
NOVO LOOKS TO RETAKE LEAD IN OBESITY DRUG MARKET
Mikael Bak, head of the Danish Shareholders’ Association, which has 17,000 members – a majority of them invested in Novo – said the update was not a surprise, but “nevertheless a disappointment”.
“We support the transformation process now underway and view this as a moment for patience, focus, and disciplined execution,” he added.
Doustdar said the obesity drug race was “a marathon not a sprint” and gained some plaudits for his tougher approach.
“Novo’s management is evidently determined to reclaim its leading position,” said HSBC analyst Rajesh Kumar.
UBS analysts, meanwhile, said investors would be disappointed by the magnitude of the guidance cut and the growth outlook.
Novo also announced that manufacturing chief Henrik Wulff, who oversaw the multi-billion dollar production build-out that followed Wegovy shortages, would leave the company.
($1 = 6.4029 Danish crowns)
(Reporting by Jacob Gronholt-Pedersen and Maggie Fick; Editing by Tomasz Janowski, Mark Potter and Emelia Sithole-Matarise)
