Novo Nordisk Profits Soar as Obesity Drug Sales Skyrocket

Novo Nordisk, the Danish pharmaceutical company, has reported a robust start to the year with better-than-expected profits for the first quarter. The company's operating profit soared to 31.85 billion Danish krone, marking a 27% increase from the same period in the previous year. This performance exceeded analysts' expectations by 9%. Overall sales also climbed, reaching 65.3 billion Danish krone, which represents a 22% rise year-on-year. This growth is primarily attributed to the soaring demand for Novo Nordisk's obesity drug, Wegovy, which saw its sales double to 9.4 billion krone from last year's figures.

Despite the financial uptick, Novo Nordisk has encountered supply constraints due to the unexpectedly high global demand for Wegovy. The company has acknowledged the supply issues and has initiated efforts to boost production capacity both in the short term and for future needs. However, these constraints have led to shortages of the drug in various markets. Additionally, the company's diabetes treatment, Ozempic, has also experienced a significant sales increase of 43%.

While Novo Nordisk is currently the most valuable company in Europe by market capitalisation, valued at €540.4 billion, its shares have declined by 2.9%. Analysts suggest that the impressive performance may have been influenced by one-off factors, and the company faces growing competition from rivals such as Eli Lilly, which is expanding the reach of its Zepbound therapy. Despite the challenges, Novo Nordisk has seen its shares rise approximately 260% since the launch of Wegovy in the US in June 2021.