Key Takeaways:
Novo Nordisk A/S (NOVOb.CO) raised its full-year guidance after reporting first-quarter adjusted operating profit of 32.86 billion Danish crowns ($5.16 billion), beating analyst expectations on strong demand for its weight-loss drug Wegovy.
"The strong Wegovy performance, combined with continued growth in International Operations, has led us to raise our 2026 guidance for both adjusted sales and adjusted operating profit,” CEO Mike Doustdar said in a statement.
The Danish drugmaker's Q1 adjusted operating profit surpassed the mean forecast of 28.74 billion crowns from a company-compiled poll. Novo Nordisk now expects its adjusted sales and operating profit to decline by between 4% and 12% at constant exchange rates this year, compared with a previous forecast for a 5% to 13% decline. The results come as rival Eli Lilly and Co (LLY.N) last week hiked its own full-year profit and revenue forecasts on surging demand for its competing weight-loss drugs.
The improved outlook provides a much-needed boost for Novo Nordisk, whose shares have fallen almost 40% in the last year, lagging Lilly's 18% gain. The company is banking on its new oral version of Wegovy to defend its market share as a price war with Eli Lilly intensifies in the booming obesity drug market.
Competition in the lucrative market for weight-loss treatments is heating up. Eli Lilly received U.S. Food and Drug Administration approval for its competing oral drug, Foundayo, in early April, ending Novo Nordisk's brief monopoly with its Wegovy pill.
Both companies are grappling with proving that soaring volumes can offset falling prices. Novo Nordisk has faced a challenging year, marked by disappointing trial results for a next-generation obesity drug and a share price slide that erased over $400 billion in market value from its 2024 peak.
For the first quarter, Eli Lilly reported that revenue from its GLP-1 drugs, Zepbound and Mounjaro, accounted for roughly two-thirds of its total sales, which grew 56% year-over-year to $19.7 billion.
The stronger-than-expected performance and guidance lift suggest Novo Nordisk's strategy to navigate the competitive landscape is gaining traction. Investors will now watch for the uptake of the oral Wegovy pill and its impact on margins in the company's second-quarter earnings report.
This article is for informational purposes only and does not constitute investment advice.
