Novo Nordisk
Note: This is a daily stock update and the information stands true as of 06/11/24, 09:00 CET.
Company Update:
Expert Opinion:
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Company Update:
Novo Nordisk’s Q3 24 results were largely in line with the street’s expectations, though its star weigh-loss drug Wegovy’s sales exceeded the consensus’ estimates.
Sales came in at DKK71.3bn (c.1% behind the consensus), surging 23% at constant exchange rates (CER) and 21% reported. NB, all growth figures are in CER terms, unless stated otherwise. The performance was driven by GLP-1 diabetes franchise (c.49% of sales; +15%) – which includes Ozempic (+26%) and its oral-version Rybelsus (+23%), and Obesity drugs (c.26% of sales; +55%). Moreover, Insulins (c.18% of sales; +10%) also posted a healthy growth. In Q3, the operating profit increased 28% to DKK33.8bn (1.6% ahead of the consensus).
For 2024, the management narrowed its outlook, wherein now sales are expected to grow between 23-27% (vs. 22-28% previously) and operating profit between 21-27% (vs. 20-28% previously).
Expert Opinion:
Since its June 2024 peak, Novo’s shares have shed c.27% of their value, largely because of competitive concerns and worries around the inclusion of its drugs under the US IRA negotiations starting 2027. Overall these share price levels are quite attractive, given that Novo is a dominant force in the obesity space, which could burgeon to >$100bn a year in the next decade from just $10bn in 2023, and along its weight-loss drugs could also bring with them a host of other benefits in ailments including cardiovascular, kidney-related, MASH (fatty liver disease), alcohol addiction and even Alzheimer’s. These additional benefits could add another $20-30bn (or even more) to the addressable market of GLP-1 based weight-loss drugs, besides diabetes and obesity of course. Novo’s strong balance sheet also provides it an optionality to go after promising external innovation and stay ahead of the curve. The near-term catalyst (expected in Q4 24) could be late-stage results of its weight-loss candidate CargriSema.
After Eli Lilly’s Q3 24 profitability miss, Wegovy exceeding expectations and Novo’s broader results being in line with the consensus, should be taken in the positive light by the markets.
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