Novo Nordisk weight-loss pill powers profit beat in race to catch Eli Lilly
Novo Nordisk's Financial Performance and Competitive Landscape
By Stine Jacobsen and Maggie Fick
COPENHAGEN/LONDON, May 6 (Reuters) - Novo Nordisk beat first-quarter profit forecasts and nudged up its full-year outlook on Wednesday, helped by stronger-than-expected sales of its new weight-loss pill in the United States as it seeks to regain ground on rival Eli Lilly.
Shares in the Danish drugmaker were up 5.4% at 1253 GMT and were on track for their biggest daily jump so far this year, after a sharp slide in the last two years saw it lose its crown as Europe's most valuable firm, earned on booming early obesity drug sales.
Novo is now banking on its newly launched pill to widen its consumer reach and offset fierce price competition, especially in the U.S., after price cuts to its Wegovy injection last year squeezed margins.
Market Reaction and Analyst Insights
"Sales of the Wegovy pill are surprisingly positive and above expectations, especially driven by the filling of stocks at the distributors," said AL Sydbank analyst Soren Lontoft Hansen.
"Novo is showing that they are to some extent able to exchange lower prices for higher revenue through volume, both on the pill and on the injection. It sends a positive signal to investors."
Novo, an important driver of Denmark's economy, reported adjusted operating profit of 32.86 billion Danish crowns ($5.16 billion), above the 28.74 billion forecast in a company-compiled poll.
Obesity Drug Demand Proves Resilient
Novo forecast full-year adjusted sales and operating profit declines of 4% to 12% at constant exchange rates, less than the 5%-13% fall predicted previously.
"The earnings downgrade cycle is over," said Markus Manns from Union Investment, a shareholder in both Novo and Lilly, though he added that Novo's sales and EPS decline was in sharp contrast to Lilly's growth.
Eli Lilly beat forecasts last week and hiked its outlook.
The stronger showing from both firms suggests the obesity drug market is large enough to sustain two major players, even as falling prices squeeze margins.
Alessandro Valenti, portfolio manager at Novo shareholder Causeway Capital, said it was clear Novo had a good start with its pill, but it was too early to know whether it could maintain its lead after Lilly launched its own version Foundayo in April.
Novo Pill Expansion and Regulatory Strategy
Novo Pill to Launch Outside U.S. Despite Pricing Fears
Novo is pushing ahead with plans for the Wegovy pill in markets outside the U.S. in the second half of 2026, despite industry concerns that President Donald Trump's "most-favoured-nation" drug pricing policies could disrupt European launches.
"We are considering MFN obviously as part of our planning, but it's not a limiting factor," CEO Mike Doustdar told Reuters in an interview after the results.
Under the policy, the United States would tie the price it paid for drugs to those charged in other developed countries, meaning launches in lower-priced markets could automatically trigger cuts to U.S. prices.
Novo has submitted its Wegovy pill to the European Medicines Agency and other regulatory authorities.
Doustdar said Novo's lower pricing for the Wegovy pill, which starts at $149 per month, reduced pressure from Trump's policies versus drugmakers with wider U.S.-Europe price gaps.
Novo Seeks to Rebuild Momentum
Sales Performance and Market Share
Sales of the Wegovy pill hit 2.26 billion crowns in the quarter, nearly double analyst forecasts.
"We have now been competing with our competitor for about a month... and so far, so good," CEO Doustdar told journalists on a call, referring to Lilly.
Total prescriptions for the Wegovy pill reached about 1.3 million in the first quarter and more than 2 million since its January launch, which Doustdar said made it the strongest GLP-1 launch by volume in the United States.
Adjusted group sales came in at 70.06 billion Danish crowns in the quarter, above the 69.07 billion expected by analysts.
Challenges and Future Outlook
Novo has spent much of the past year on the defensive after disappointing trial results for its next-generation obesity pipeline, weaker than expected sales and a share price slide that has wiped more than $400 billion off its market value since its 2024 peak.
CFO Karsten Munk Knudsen told reporters the company's market research showed patients were shifting away from the compounded obesity drugs that weighed on Wegovy sales.
More than half of Wegovy sales in the United States now came through lower-priced self-pay channels, up from just over 10% a year ago, the company said.
Novo shares are down nearly 40% over 12 months, lagging Lilly's roughly 18% rise, though the stock has edged higher since late March on optimism around the pill launch.
Reporting and Editorial Credits
(Reporting by Stine Jacobsen and Maggie Fick; Additional reporting by Bhanvi Satija in London and Soren Jeppesen in Copenhagen; Editing by Louise Heavens and Elaine Hardcastle, Kirsten Donovan)
