Denmark’s Novo Nordisk has cut its annual revenue and profit forecasts after disappointingly “flabby” sales of its weight loss drug Wegovy, as US prescriptions tailed off amid fierce competition.
Aboom in sales of Wegovyand thediabetes medication Ozempichelped to turn the pharmaceutical firm into Europe’s most valuable listed company, worth $615bn at its peak.
However, prescriptions in the US, its biggest market, have not grown since February, even though Novo Nordisk increased production of Wegovy to meet demand for the slimming drug. Its market value has halved to about $310bn.
A slowdown in forecast sales growth is likely to deepen investor concerns that Denmark’s biggest company is losing market share to its US rival Eli Lilly, which makes the diabetes and obesity drugs Mounjaro and Zepbound.
Susannah Streeter, a Hargreaves Lansdown analyst, said: “Obesity drug maker Novo Nordisk looked like a lean profit machine but its sales are turning flabbier as main rival Eli Lily gains more muscle in the space.”
Wegovy was the first of a new wave of anti-obesity drugs – known as GLP-1s after the gut hormone they mimic – to hit the market. Sales of the injectable drug totalled 17.36bn Danish kroner (£1.98bn) between January and March, down by 13% from the previous quarter. This was below the 18.7bn kroner forecast by analysts.
Overall revenues rose by 18% and operating profits advanced by 20% at constant exchange rates in the first quarter, but Novo said it was hit by compounding – medications made by pharmacies using the active ingredients of patented drugs.
The Danish company now expects 13%-21% sales growth this year, down from the 16%-24% range given at the start of the year. Operating profits are expected to rise by 16%-24%, compared with the previous estimate of 19%-27%.
Analysts are forecasting that sales and operating profit this year will grow by 17.8% and 21.5%.
Novo’s chief executive, Lars Fruergaard Jørgensen, said: “In the first quarter of 2025 we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments. However, we have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US.”
Novo reported first-quarter pre-tax profits of 38.79bn kroner, up 22% from a year earlier.
Derren Nathan, the head of equity research at Hargreaves Lansdown, said: “Novo Nordisk has lashed out at the controversial US compounding industry in its quarterly update, citing a focus on preventing unlawful formulations of semaglutide, the active ingredient in its weight-loss wonder jab Wegovy.
Sign up toBusiness Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
“In some cases, US compounding pharmacies are allowed to formulate active medical ingredients into non-approved drugs to meet individual requirements or combat shortfalls in supply.”
Nathan said that while Wegovy’s sales growth in the US, at 39%, was “hardly pedestrian”, most of its growth was driven by sales in other markets. He said Novo faced “intense competition” from Eli Lilly to bring an oral alternative to Wegovy to market.
Competition is likely to heat up further with other drugmakers developing GLP-1 medications, and cheaper generic versions coming on to the market.
Sheena Berry, a healthcare analyst at Quilter Cheviot, said: “Currently, the obesity market is still dominated by Eli Lilly and Novo Nordisk, but there are numerous clinical trials ongoing with competitors looking to enter the space.”