To The Moon

On April 13, 2023, $Novo-Nordisk A/S(NVO)$ announced that the expects sales growth in local currencies for 2023 to come in between 24% and 30% and operating profit growth between 28% and 34%, up from a February guidance of between 13% and 19% for both those numbers.

Source: Novo-Nordisk A/S(NVO)

In the Q1 2023, Novo Nordisk's sales were US$9.1 billion, a year-on-year increase of 25%.

Source: Novo-Nordisk A/S(NVO)

On the supply side, new contract manufacturers (CMOs) are ready to start production due to strong demand for semaglutide. $NOVO NORDISK B(0QIU.UK)$ $Novo-Nordisk A/S(NVO)$ has raised its revenue and profit forecast for 2023, but will not disclose more details until it discloses its quarterly report on May 4.

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On Thursday, $Novo-Nordisk A/S(NVO)$ shares rose 2.5% to another record, with a market value of $377 billion.

With the explosive growth of semaglutide, the market value of $Novo-Nordisk A/S(NVO)$ has ranked second in the world, and it is the number one among pure pharmaceutical companies. $Eli Lilly(LLY)$ has given up its position as the first in the market value of pure drugs. $Eli Lilly(LLY)$ , another leader in the GLP-1 field, is not far behind, with a market value of $356.5 billion.

GLP-1 has become the largest category in the diabetes market, and continues to develop new indications such as weight loss, NASH, CKD, and AD, each of which is a super market.

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$Novo-Nordisk A/S(NVO)$ 2022 Annual Report:

Performance: The company's 2022 revenue will be +26%, and the net profit rate will be 31.4%. The revenue in North America increased by 35%, and the revenue in China increased by 102%, mainly driven by Ozempic. At present, the proportion of GLP1 market has increased to 11.6%.

Product sales: Total annual sales of diabetes GLP1 products +56%, weight loss GLP1 total +101% (revenue accounted for 9%, off-label distortion). Ozempic revenue +77%, oral Sema Rylelsus sales +134%. The overall revenue of GLP1 drugs exceeds 15 billion US dollars.

In 2022, Wegovy's sales will only be +346%, and the income of the insulin sector will be -5%. Rare disease revenue +7%.

Comprehensive points of $Novo-Nordisk A/S(NVO)$ and $Eli Lilly(LLY)$

Due to the interruption of Wegovy CDMO (pen-loading) production in 2022, the supply is limited throughout the year. Even if similar products undertake part of the demand, the market has always been in a state of serious imbalance between supply and demand. At present, the company's Wegovy production capacity has resumed, part of the backlog of demand has been met, and its performance is expected to rebound quickly. Therefore, $Novo-Nordisk A/S(NVO)$ is one of the companies with the most certain performance among major pharmaceutical companies this year.

Since the GLP1 market space is large enough (Pfizer estimates it will reach 90 billion US dollars in 2030), the demand is strong, and it is relatively blue ocean at present, so there is no need to consider market competition in the short term. Both Mounjaro and Wegovy will be big sellers. If the follow-up company can prove that 7.2mg Sema is safe and well tolerated, it is expected to win a round from Lilly and become BIC again.

Compared with $Eli Lilly(LLY)$ , although $Eli Lilly(LLY)$ core product revenue guidance shows that there will be a high growth rate of about 50% this year, due to the drag of the new crown-related business, the total revenue will only grow by single digits, and the current valuation is relatively high PE reaching 45x , up to 50x in de-energy years.

In addition, the growth rate of $Eli Lilly(LLY)$ stock price in the past few years was much higher than its performance, mainly because the market expected to buy-in its potential me-better large varieties in advance. This year, these BICs will be approved one after another (or they may not be approved, such as donanemab), which is a year of good news. Superposition is currently overvalued, and it is expected that the main line of $Eli Lilly(LLY)$ this year will be valuation adjustments.

Compared with Lilly, $NOVO NORDISK B(0QIU.UK)$ 's business is relatively simple, mainly for diabetic varieties. Semaglutide-related products can drive the company to maintain a long-term high-growth trend. Novo corresponds to a PE (FWD) of about 29x, although it is not low, but it is more reasonable than $Eli Lilly(LLY)$ 's 37x (FWD).