May 24, 2024

Novo Nordisk, the maker of the mega-popular diabetes and weight loss medications Ozempic and Wegovy, is set to report its first quarter earnings on May 2.

The Danish pharma giant is one-half of the current duopoly on GLP-1 (glucagon-like peptide 1) agonist medications, a class of drugs that helps regulate blood sugar levels and suppresses a user’s appetite.

The other half, Zepbound-maker Eli Lilly, already reported its first quarter earnings on Monday. Sales of its weight loss drug were so hot the company raised its full-year revenue guidance by $2 billion.

Soaring sales of GLP-1s overall have have catapulted both pharma giants into the most valuable pharmaceutical companies in the world by market capitalization.

Morgan Stanley analysts anticipate the global market for these drugs will reach $105 billion by 2030. The investment bank also expects the adoption of GLP-1s to reach about 31.5 million people in the United States, about 9% of the nation’s population, by 2035.

On Thursday, Novo Nordisk, which sparked the GLP-1 craze with Ozempic in 2017, is set to give investors an update on its business.

Here are a few things to keep an eye on.

💉 Ozempic and Wegovy sales are expected to grow

In 2023, Ozempic and Wegovy accounted for nearly 55% of Novo Nordisk’s 232.3 billion Danish kroner ($33.8 billion) full-year 2023 sales. Wall Street expects sales for these medications to grow even more this year.

Analysts expect sales of Ozempic in the first quarter of 2024 to rise 36% year over year to $3.8 billion, from $2.8 billion, according to a consensus estimate from FactSet. Sales of Wegovy are anticipated to grow more drastically, by 129% year over year to $1.5 billion, from $652 million.

This quarter is also the first to track sales of Wegovy after Medicare Part D programs were allowed to provide coverage for the drug.

Toward the end of the first quarter of 2024, Wegovy became eligible for Medicare coverage when it is prescribed to reduce patients’ risk of serious heart events such as heart attacks and strokes. This opened the door for for over 3 million Medicare beneficiaries that are obese or overweight to get coverage for Wegovy.

🚫 How quickly can Novo Nordisk address ongoing shortages?

Ongoing shortages have plagued both Ozempic and Wegovy. The Food and Drug Administration (FDA) lists most doses of both medications as in limited supply. Investors will be expecting to hear how the company is working to to fix its supply issues.

Novo Nordisk has been limiting starter doses of Wegovy since last year to ensure there’s enough supply for patients already on the drug. The FDA first declared a shortage of Wegovy in March of 2022. Novo Nordisk CEO Lars Fruergaard Jørgensen said in March that the gap between demand for weight loss drugs and the supply is so significant that it will take years to close.

Novo Nordisk announced in February that it has acquired three facilities from the company’s largest shareholder, Novo Holdings, for $11 billion in an effort to address a shortage of Wegovy. The deal was made in connection with Novo Holdings’ acquisition of the drug manufacturing company Catalent. Novo Nordisk said in a statement that the acquisition will increase the company’s production capacity beginning in 2026.

On Monday, the company told Quartz in emailed statement that while it plans to gradually increase the drug’s supply throughout the year it admits that “demand will continue to exceed supply.”

🕵️‍♂️ Will the company address government challenges?

This month, Novo Nordisk faced challenges from two U.S. governmental bodies over the price of its drugs.

In a letter to Novo Nordisk on Tuesday, the Federal Trade Commission said it was disputing patent listings in regards to the company’s Ozempic, Saxenda, and Victoza brands. The challenges are part of an FTC campaign to promote competition in the pharmaceutical industry in lower prices. The Commission argues that improper listings “can delay cheaper generic alternatives from entering the market.”

And, last week, U.S. Sen. Bernie Sanders launched an investigation into the the high prices of Novo Nordisk’s Wegovy and Ozempic in the United States.

“As important as these drugs are, they will not do any good for the millions of patients who cannot afford them,” Sanders wrote in a letter to Novo Nordisk CEO Lars Fruergaard Jørgensen.

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