Novo Nordisk stock dips as Wegovy sales miss, drug's US supply hit amid demand

Novo Nordisk (NVO) (OTCPK:NONOF) stock fell ~5% premarket on Thursday after sales of weight loss drug Wegovy came below expectations despite Q1 earnings and revenue beat estimates.

Wegovy, which is a version of semaglutide, saw sales for the quarter grow +225% Y/Y to DKK4.56B.

However, BI Research noted that the 5% sales miss on the weight loss therapy would not go unnoticed.

Temporary decreased supply of lower doses of Wegovy in the U.S. amid tight capacity would limit new patient initiation and could lead to jitters among investors, given the weight loss drug is an important driver of valuation that leaves no room for error, Bloomberg noted citing BI Research.

Novo is also reducing the supply of some does of Wegovy in the U.S. due to high demand.

The company's Q1 earnings release noted that, "To safeguard continuity of care, the supply of the lower Wegovy dose strengths in the US will be reduced temporarily."

Novo, however, added that the supply capacity is gradually being expanded and a second contract manufacturer for Wegovy started production in April.

The diabetes-focused drugmaker saw Q1 EPS grow +41% Y/Y to DKK8.78. Operating profit increased +31% Y/Y (+28% at constant exchange rates - CER) to ~DKK25.01B.

Net sales grew +27% (+25% CER) Y/Y ~DKK53.37B, driven by diabetes and obesity drugs but rare disease segment saw a decline.

"The growth is driven by increasing demand for our GLP-1-based diabetes and obesity treatments, particularly in the US where the prescription trend for Wegovy highlights the high unmet need for people living with obesity," said President and CEO Lars Fruergaard Jørgensen.

Diabetes care segment sales grew + 23% Y/Y (+21% CER) to DKK40.95B in Q1, driven by GLP-1 therapies.

Total GLP-1 segment increased +54% Y/Y (+50% CER) to DKK26.81B.

Blockbuster drugs Ozempic (semaglutide) sales rose +63% (+59% at CER) Y/Y to DKK19.64B. Rybelsus revenue increased +111% (+107% at CER) Y/Y to ~DKK4.36B.

Meanwhile, Victoza sales fell -15% (-17% at CER) Y/Y to ~DKK2.82B.

Total sales from insulin portfolio declined -10% Y/Y (-11% at CER) to ~DKK13.41B.

Total Obesity care segment sales increased +131% Y/Y (+124% CER) to DKK7.84B. Weight loss drug Saxenda revenue increased 64% (+63% at CER) Y/Y to ~DKK3.28B.

However, Rare disease segment sales fell -15% Y/Y (-16% CER) to ~DKK4.58B.

Buyback Program: Novo said the ongoing share buyback program was expanded by DKK2B to DKK30B.

The company noted that it returned DKK23.5B to shareholders via share buybacks (DKK5.2B) and dividend (DKK18.3 billion) in Q1.

Outlook:

In April, Novo raised the 2023 outlook and reaffirmed it in today's result.

The company expects sales growth to be 24-30% at CER, compared to prior estimate in February of 13% to 19%. At

Operating profit growth is expected in the range of 28% to 34% at CER, versus the February guidance of 13% to 19%.

NVO -5.14% to $159.15 premarket May 4