Jacob Gronholt-Pedersen and Maggie Fick
Copenhagen/London (Reuters) - Drugmaker Novo Nordisk expects U.S. Wegovy weight loss drug sales will begin to resume once a ban on compound imitators is enforced this month.
After a review by the U.S. Food and Drug Administration (FDA), U.S. pharmacies were allowed to produce composite copies due to insufficient supply.
Compounds replicate branded medicines by binding, mixing or changing the ingredients of the medicine.
Wegovy's booming sales helped make Novo the most valuable publicly-owned company in Europe, with a peak value of $615 billion, but its market value has dropped to about $310 billion since its peak last June.
Despite Novo increasing supply, the largest market in the U.S. (its largest market) did not grow.
"Growth is expected to be successful in the second half of this year," CEO Lars Fruergaard Jorgensen said in a call with reporters.
Investors have been worried that Novo's first arrival drug is losing leadership ahead of Eli Lilly, whose US prescription for Zepbound obesity has surpassed Wegovy since mid-March.
Novo Nordisk said Wegovy's first-quarter sales were 17.36 billion Danish royal family ($2.64 billion), down 13% from the previous quarter, down from analysts' expectations of 18.7 billion crown.
“Or the prescription is back or it will be set up or closed for Wegovy,” Barclays analyst Emily Field said on CNBC. “Either the prescription is back or people think Eli Lilly will adopt the entire market.”
Novo executives said in a call with analysts that the company has formulated a strategy to win the market share currently held by compound pharmacies.
Novo's stock was 3.4% higher in 1300 GMT.
Novo estimates that about one-third of the U.S. obesity drug market is “captured” by making pharmacies.
He said this has “defeated” the company’s growth in major U.S. markets. “It’s unprecedented in our industry that we have a large number of unapproved patients,” he said. “We were really surprised.”
Jorgensen also said the sales would benefit from a decision by CVS Health, the largest pharmacy welfare administration in the United States, to remove Zepbound from some of the drug lists covered for repayment.
Potential new tariff loom
Novo launched Wegovy in three countries within the last month and brought the total to 25 countries, saying it will further accelerate launches due to the elimination of supply restrictions.
Still, the Danish company cut its sales and profit forecasts for 2025 for the first time since its launch four years ago.
Now, it expects sales of local currencies between 13% and 21% to be sold in 2025, compared with 16%-24% given at the beginning of the year to 16%-24%, while operating profit growth this year was between 16% and 24%, compared with previous guidance between 19% and 27%.
"Guideline cuts are widely expected and are seen as a liquidation activity, with people looking to sell from compounders exports in June and from preferred CVS formula in July," said Markus Manns, a Novo shareholder and portfolio manager at Mutual Funds United Investments.
The company said that while current U.S. tariffs have no significant impact on Novo's outlook, President Donald Trump's potential new tariffs on drugs could have a negative impact.
Novo's first-quarter earnings ahead of interest and taxes was 38.79 billion yuan, while 37.2 billion stock forecasts based on the 26-analyst company consensus, up 22% from a year ago.
($1 = 6.5675 Danish Crown)
(Reported by Jacob Gronholt-Pedersen and Maggie Fick, editor of Terje Solsvik, Barbara Lewis, Elaine Hardcastle)