Shares of Danish pharmaceutical giant Novo Nordisk slid 4% on Friday, extending a 2.7% decline on Thursday as analysts pored about the facts of the firm’s first-quarter final results and monitored a opportunity rival body weight reduction procedure.
It puts the stock on observe for its sharpest everyday drop considering the fact that Oct 2023, in accordance to LSEG info.
The company claimed that gross sales for its blockbuster injectable weight reduction procedure Wegovy, a lot more than doubled to 9.38 billion Danish kroner ($1.4 billion). Novo Nordisk, which also would make diabetes treatment method Ozempic, said the increase in sales experienced offset a slight reduction in costs.
Novo Nordisk expects price ranges to fall even more as new entrants enter the sector, CFO Karsten Knudsen claimed on a media get in touch with, including that the enterprise was not viewing much proof of Wegovy consumers moving to other rival treatments.
Analysts predicted even better weight loss drug income in the quarter, and some famous that Novo Nordisk’s 2024 outlook elevate for both of those gross sales advancement and operating earnings was due to just one-off accounting changes.
“Even though we continue on to see Novo as a large-moat organization, with powerful intangible property bordering its cardiometabolic enterprise, we consider higher weight problems drug need and a shortage of provide have driven share price ranges previously mentioned their intrinsic price,” Karen Andersen, strategist at Morningstar, mentioned in a Thursday observe.
The boom in need for excess weight decline solutions saw Novo Nordisk overtake French luxury team LVMH to turn into Europe’s most beneficial corporation previous 12 months. Shares obtained 49% in 2023 and are up 25% year to date.
Income numbers were “a small bit light, expectations got in advance of themselves … and you however have these supply challenges at Novo,” Jared Holz, health-treatment equity strategist at Mizuho, advised CNBC’s “Rapidly Revenue” on Thursday.
Analysts at Stifel trimmed their focus on rate on the stock to 950 kroner, down from 960 kroner on Friday.
Pounds decline drug makers ended up meanwhile broadly reduced following U.S. firm Amgen said it was “quite happy” with initial trial success for its injectable being overweight cure MariTide.
The potential maximize in competition is hanging in excess of each Novo Nordisk and U.S. juggernaut Eli Lilly, which also elevated its outlook this 7 days, as far more excess weight loss players arise to shake up what has mostly been a two-horse race.
The two firms are consequently looking into new prospective fat loss treatments to retain an edge.
“When we appear at the full place, Novo and Lilly are dominating because they were being presently excellent existing gamers in diabetes. This weight problems market place is very tangential, it really is extremely uncomplicated for them to pivot a incredibly related individual population to obesity,” Holz mentioned.
It may possibly be probable for more recent gamers like Amgen to get 5% to 10% market share above time, or for the totality of competition to acquire 10% of the industry, but the advance of Eli Lilly and Novo Nordisk is “going to make it definitely hard,” Holz extra.
