Novo-Nordisk A/S raised its full-year guidance on Tuesday evening while reporting quarterly results that beat market expectations. Investors remain focused on pricing pressure, the sustainability of the earnings beat, and whether the Wegovy oral pill can become a strong enough growth engine to reverse the company's growth slowdown.
In an interview, CEO Mike Dustahtar stated: "If products like the oral pill underperform and fail to generate profit, we cannot achieve positive growth in both revenue and profit." After Novo-Nordisk reported quarterly earnings, its shares declined, prompting the CEO to reassure investors that the Wegovy oral pill can still drive profitable growth even as product prices fall.
The Danish drugmaker raised its full-year guidance, with adjusted sales and operating profit both exceeding expectations. However, investor attention remains on three key issues: ongoing pricing pressure, the quality of the earnings beat, and whether the oral Wegovy can evolve into a core growth driver to revitalize the company's trajectory.
Novo-Nordisk acknowledged that product price cuts continue to weigh on sales revenue. Yet CEO Mike Dustahtar stated that rising sales volumes, combined with early sales of the Wegovy oral pill, demonstrate the effectiveness of the current business strategy. In a Wednesday interview with Caroline Rose, Dustahtar noted: "If core new products like the oral pill are sluggish and unprofitable, we cannot simultaneously achieve positive growth in both revenue and profit."
The CEO also told media that the company is seeking the optimal balance between price and volume. He believes that price cuts can stimulate strong demand and that the company will continue to dynamically adjust pricing in response to market changes. Discussing the second-quarter performance, he said: "We achieved solid double-digit volume growth; of course, product pricing this year has posed headwinds and challenges to financial performance."
Lack of overall highlights, difficult to boost confidence
Novo-Nordisk's quarterly results beat expectations and guidance was raised, yet failed to alleviate Wall Street's biggest concern: as Eli Lilly intensifies its competitive offensive, does the Ozempic manufacturer have a clear and viable path back to sustained growth? Analysts noted that the quarter's strong results were boosted by rebate adjustments and other one-off factors; overall sales of weight-loss drugs were broadly in line with expectations, while oral Wegovy sales slightly missed forecasts. Meanwhile, the next-generation weight-loss drug CagriSema released another set of mixed clinical data, further deepening investor doubts about the company's long-term pipeline.
Citigroup analysts commented: "Overall, there are few highlights, making it difficult to lift market sentiment." Jefferies stated that following this guidance upgrade, the room for upward revisions to consensus sales estimates is now very limited. The Danish drugmaker raised its full-year guidance: on a constant currency basis, it now expects adjusted sales and adjusted operating profit to decline between 6% and flat year-over-year; the previous guidance had indicated a 4% to 12% decline for both metrics, marking a significant improvement. In the second quarter, on a constant currency basis, adjusted sales rose 7% year-over-year, and adjusted operating profit increased 11%, with volume growth partially offsetting the impact of price cuts.
Over the past 12 months, Eli Lilly's stock performance has consistently outperformed Novo-Nordisk's American Depositary Receipts (ADRs). The earnings report was released a day earlier than originally scheduled; shares of Novo-Nordisk listed in Copenhagen fell as much as 5% in early trading before paring losses, closing down 4.3%.
Oral pill market outlook
Novo-Nordisk stated that the upward guidance revision was driven by higher sales expectations for the GLP-1 product line, particularly the Wegovy portfolio (injectable plus oral pill). The company disclosed that oral Wegovy has surpassed 5 million prescriptions since its launch, with strong initial penetration in markets outside the United States. A new, higher-dose version of the Wegovy injection has also been approved and is gradually rolling out.
Dustahtar told media: "I foresee the future weight-loss drug market will largely evolve into an oral pill market," while emphasizing that the pill has only been on the market for six months. Addressing concerns about slowing sales growth of oral Wegovy, which slightly missed some analyst expectations, he countered: "A key data point: in the period without competitive pressure, we achieved our first 1 million prescriptions in 11 weeks. The most recent 1 million prescriptions took only 4 weeks; even with competitors now actively vying for prescription share, we have held our market position."
Novo-Nordisk data shows that approximately 80% of patients taking the oral pill have never used any GLP-1 drug before. This indicates that the oral pill primarily opens up a new patient population with obesity, rather than simply diverting users from the injectable version of Wegovy. Brian Marbury, Chief Market Strategist at Zacks Investment Management, commented via email: "Novo-Nordisk's management hopes that patient preference for oral formulations will drive growth, but ultimate success depends on the company's execution and ability to scale production."
Eli Lilly's competing weight-loss oral pill, Foundayo, launched in April, roughly four months after Wegovy's oral pill entered the U.S. market. Initial prescription volumes for the drug have been slow to ramp up; Eli Lilly CEO David Ricks previously said in an interview that as a new drug, doctors and patients still need time to build awareness, and brand cultivation requires a period of time. Eli Lilly is scheduled to report its earnings on Wednesday morning.
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