Danish drugmaker Novo Nordisk (NOVOb.CO) raised its full-year earnings outlook after reporting better-than-expected profit on strong sales of diabetes treatment Ozempic, lifting its shares to a three-month high.
The company predicted 2022 operating profit growth at constant exchange rates of 13-16%, up from a previous target range of 11-15%.
Third-quarter operating profit rose by almost a third to 20.2 billion Danish crowns ($2.7 billion), above the 19.2 billion forecast by analysts, based on Refinitiv data.
It reiterated that it expects to make all doses of weight-loss drug Wegovy, a future growth driver, available in the United States towards the end of 2022, as it recovers from a production outage last year.
Like Ozempic, Wegovy belongs to a drug class known as GLP-1 analogues.
“The growth is driven by increasing demand for GLP-1-based diabetes treatments, especially Ozempic,” CEO Lars Fruergaard Jorgensen said on Wednesday.
Analysts have speculated that Ozempic demand is partly driven by prescriptions to non-diabetic patients who seek to lose weight, which is outside its approved indication.
“We believe that the weight benefit of Ozempic is becoming a stronger prescription driver because it also matters to people with diabetes,” the CEO said, but he stressed that the company would promote drugs only within approved indications.
Novo Nordisk shares rose 5% to a three-month high, but still did not quite make up for a nosedive in August, when the company flagged delays in the Wegovy relaunch.
In obesity, much of the company’s growth aspirations are riding on weekly injection Wegovy, which was shown to help patients lose about 12% of their body weight. It won U.S. approval in June 2021 as an obesity drug.
But a contractor filling syringes for injection pens for the U.S. market ran into production problems last December, which has left Novo scrambling to reorganise the launch.
Jorgensen said future obesity drug launches would have buffer production capacity and he would worry less about marketing and advertising because of the “pull nature” of the weight-loss market.
Still, Novo faces keen competition from Eli Lilly, whose monthly injection Mounjaro won U.S. approval for type 2 diabetes in May and it is under fast-track review as a potential weight-loss drug.
Driving the surprise earnings gain, Ozempic sales surged a currency-adjusted 63% to 16.4 billion crowns during the quarter, while sales from weight-loss pill Saxenda gained 54% to 3.17 billion crowns.
“Underlying obesity demand remained exceptionally strong,” Credit Suisse analysts said.
($1 = 7.5224 Danish crowns)