By Maggie Fick
LONDON (Reuters) – Novo Nordisk on Wednesday reported a lower-than-expected second-quarter operating profit, raising its 2024 revenue forecast but cutting its profit outlook as competition from Eli Lilly intensifies in the fast-growing weight-loss market.
Operating profit rose 8% in the quarter at constant exchange rates to 25.9 billion Danish crowns ($3.8 billion), compared with 27.3 billion expected by analysts in an LSEG poll. Novo shares on the Frankfurt stock exchange fell 3.2% in the immediate aftermath of the IPO.
The Danish company expects revenue growth of 22% to 28% in local currency this year, compared to previously forecast growth of 19% to 27%.
“We are pleased with the revenue growth in the first half of 2024, which allows us to revise our outlook for the full year upwards,” CEO Lars Fruergaard Jorgensen said in a statement.
However, the company lowered its forecast for operating profit growth this year to 20% to 28% in local currencies, from its previous forecast of 22% to 30%.
Novo ended an investigation into advanced kidney disease in June, resulting in a DKK 5.7 billion impairment charge, which the company said had an impact on operating profit.
Disappointing second-quarter earnings could add to investor concerns that Novo’s lead as a first mover in the fast-growing market for obesity drugs is under threat.
Sales of Wegovy, Novo’s first weight-loss drug, were also weaker than expected. Sales rose 53% to 11.66 billion crowns, compared with the 13.54 billion expected by analysts in a company-compiled consensus.
Some analysts predict that the obesity drug market could be worth around $150 billion by the early 2030s.
Investors are eager to hear more from Novo, Europe’s most valuable listed company with a value of about $550 billion, on Wednesday. They will say when the company expects to significantly increase shipments of Wegovy in the U.S. and end shortages as rival Lilly rapidly gains market share.
The company is investing billions of dollars to ramp up production of Wegovy to meet growing demand and fend off Lilly, which launched its rival therapy Zepbound in the U.S. last December.
($1 = 6.8402 Danish Krone)
(Reporting by Maggie Fick; Editing by Terje Solsvik and Tomasz Janowski)
