Novo Nordisk Reports Strong Q1 Profit Growth but Lowers Full-Year Sales Forecast Amid Rising Competition

Novo Nordisk, the Danish pharmaceutical giant known for its innovative drug solutions, announced on Wednesday that it achieved a net profit of 29.03 billion Danish kroner ($4.4 billion) for the first quarter, surpassing analysts' expectations of 27.8 billion Danish kroner according to an LSEG poll. Despite this promising financial performance, the company has lowered its full-year sales growth forecast following increased competition from compounded medications that mimic their popular Wegovy weight-loss drug. Shares of Novo Nordisk rose by 4.25% as reported at 8:38 a.m. London time, reflecting positive investor sentiment towards the company's ability to deliver profits despite the challenges ahead. Sales of Wegovy surged by 83% annually, reaching 17.36 billion Danish kroner, although it fell short of the anticipated 18.51 billion Danish kroner. Notably, overall revenues increased by 18% to 78.09 billion Danish kroner, a figure just shy of the predicted 78.18 million Danish kroner. The diabetes treatment Ozempic also reported strong sales, totaling 32.72 billion Danish kroner, which exceeded expectations of 31.5 billion kroner. CEO Lars Fruergaard Jørgensen pointed to a crowded market and the emergence of compounding pharmacies in the U.S. as significant factors negatively influencing the company's outlook. These pharmacies were allowed by the FDA to produce legal copies of Wegovy and Ozempic under a drug shortage ruling. Although the FDA lifted the shortage declaration in February, companies continue to distribute these competing products, prompting Novo Nordisk to hint at potential legal actions against those engaging in unlawful practices. Looking ahead, Novo Nordisk revised its growth forecast for 2025, now projecting sales growth of 13% to 21%, lower than the prior estimate of 16% to 24%. Operating profit growth expectations were also revised downwards from 19% to 27% to a new range of 16% to 24%. In the broader competitive landscape, Novo Nordisk faces growing rivalry from companies like Eli Lilly, Roche, and AstraZeneca, all developing new weight-loss treatment candidates. Eli Lilly recently reported a surprising 45% increase in first-quarter sales, even though their weight-loss drug Zepbound underperformed due to price reductions. Furthermore, Novo is still managing negative sentiments resulting from their less-than-ideal trial results for the next-generation obesity drug candidate, CagriSema, which they plan to file for regulatory approval in early 2026. With this shift in prospects and the growing intensity of competition, Novo Nordisk appears to be at a critical juncture as it maneuvers through a rapidly evolving market landscape.