Demand for obesity drugs has pushed Novo Nordisk’s share price to new highs.
The rush on weight loss drugs has sent Danish drugmaker Novo Nordisk’s market value to new records as its share price has also soared rapidly after Europe’s biggest company posted better-than-expected results in its latest earnings report.
The firm behind weight loss drug Wegovy and diabetes drug Ozempic has reported that its sales increased by 31% and its net profit surged by 51% in 2023 compared to the previous year (both in Danish kroner).
Growth was driven by Novo’s obesity care sales which jumped by 154% compared to the previous year.
At the opening of the Copenhagen stock exchange, Novo shares were sold for more than 776 Danish kroner, a more than 3% rise, temporarily sending the market value of the company beyond $500 million before the overall joy cooled down and the price fell slightly.
Its share price has already risen sharply in 2023 and gained more than 60% over the last 52 weeks. In September last year, this drove the 100-year-old company’s value to the sky and allowed it to dethrone French luxury group LVMH and become the most valuable company in Europe.
Looking ahead, it seems that the company’s two flagship products are going to drive growth. Ozempic, which is used to treat type 2 diabetes, and Wegovy, the weight loss drug, are the star sellers, both containing the same active ingredient that tackles weight loss.
North America is the biggest market for Novo’s obesity care. In 2023 sales increased by 50%, and the Danish pharmaceutical giant is predicting that there is room to grow.
“Globally, the number of people living with obesity has almost tripled since 1975 and is set to reach over 1.2 billion adults by 2030,” said the company in a statement.
Previously, the company’s flagship weight loss drug Wegovy became too successful for its own good in the US, eventually forcing Novo Nordisk to limit access to the therapy in May 2023.
However, the company has now reported boosting supplies, calming investors’ concerns that rivals may take over Novo’s leading position in this market.
The Danish drugmaker is optimistic about its outlook for 2024, expecting to preserve its lead.
In the latest earnings report, Novo forecasts sales growth to be 18-26%, and operating profit growth at 21-29%, both at constant exchange rates.
“The obesity market remains extremely dynamic, with new players lining up to enter the space amid a growing appreciation that medicines tackling obesity have the potential to boost public health and cut long-term healthcare costs,” the firm said.