Novo Nordisk (NOVOb.CO) has seen an increase in the use of its Wegovy chip following the ban on counterfeit versions in the US. However, it is emphasized that the company needs to demonstrate stronger growth in the coming months to boost market confidence.
Wegovy prescriptions increased by 33% following the FDA ban that went into effect on May 22. In the week up to July 18, 181,200 new prescriptions were written. This increase is beginning to narrow the gap between Eli Lilly and its Zepbound drug. Zepbound surpassed Wegovy by 175,000 prescriptions on May 23, but by July 18 that gap had narrowed to 133,000.
Following Wegovy’s rapid success, the launch of Zepbound and its clones had slowed the drug’s growth. This led Novo Nordisk to lower its sales and profit forecasts in May and CEO Lars Fruergaard Jorgensen to unexpectedly step down.
Jorgensen had predicted that the FDA ban would boost sales in the second half of the year. The company’s announcement of its second-quarter results on August 6th is shaping investor expectations. According to Barclays analyst Emily Field, Novo Nordisk is currently in a “show” phase, still lacking optimism and needing to deliver tangible results. Berenberg analyst Kerry Holford notes that the change in new prescriptions hasn’t moved the company’s shares, adding that investors are awaiting new guidance on the year-end target. Novo Nordisk aims to increase its sales during this period with its direct-to-consumer platform called NovoCare. However, analysts note that this channel currently represents only a small fraction of Wegovy’s total volume.Wegovy’s European sales reached €615 billion in June 2024, making Novo Nordisk the most valuable publicly traded company in Europe. However, supply shortages and shortcomings in health insurance coverage increased demand for copy versions.
Investors lost confidence after Novo Nordisk lost ground against Eli Lilly’s Zepbound, which was launched in late 2023.
The first-year forecast downward made in May indicated that the company expects growth of 13-21% in local currency, but below its previous estimate of 16-24%. The FDA imposed a copy production ban after deciding that Wegovy was no longer in short supply. Novo Nordisk developed various strategies to regain the patient base lost following this ban. These include limited-time discounts and new agreements with the insurance company CVS Health. However, analysts Berenberg and UBS expect these strategies to not provide sufficient momentum and anticipate a reduction in the company’s year-end targets.
