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Novo Nordisk has reduced its sales and profits forecasts for 2025 due to lower-than-expected demand in the US for blockbuster weight loss and diabetes drugs, though shares in the company were still up following positive Q1 results.
Despite feeling the effects from the compounded glucagon-like peptide 1 receptor agonist (GLP-1RA) market, Novo Nordisk is still growing at a fast pace. Total revenues for the company came in at DKr78.1bn ($11.9bn) for Q1 2025, up 18% at constant exchange rates from the same period last year. Operating profit increased by 20%, reaching DKr38.8bn.
Whilst the share price in the Copenhagen-listed company opened relatively unchanged to a pre-earnings release market close, the stock crept up 5.8% by mid-morning today (7 May). Novo Nordisk’s market cap of DKr1.56tn is the second largest in Europe.
The Danish pharma company’s diabetes and obesity care business made up the bulk of total revenue. Sales for the unit, headed by GLP-1RA treatments Wegovy (semaglutide) and Ozempic (semaglutide) for weight loss and type 2 diabetes, respectively, reached DKr73.5bn. Novo Nordisk stated that obesity sales were the main driver – up 65% compared to Q1 2024. Diabetes sales were up a more modest 11%, with the market not as big as its burgeoning obesity counterpart.
When it comes to its total 2025 outlook, Novo Nordisk does not think it will reach its previously anticipated target. The company cut its sales growth to a range of 13-21%, compared to earlier guidance of 16-24%. Operating profit growth is forecast at 16-24%, also down from a previous range of 19-27%, the company said.
The reason, Novo Nordisk stated, was “lower-than-planned penetration of branded GLP-1RA treatments in the US, impacted by compounded GLP-1RAs”.
Compounding pharmacies were allowed to produce vast quantities of semaglutide copies when Novo Nordisk’s branded drugs were in short supply starting in early 2022. Compounded drugs are custom-made and unbranded medications that contain the same active ingredient as a marketed drug, such as semaglutide, under a prescription.
Several telehealth companies such as Mochi Health and Hims & Hers began to offer compounded semaglutide during the shortage, significantly growing their customer base in this time. Their growth in popularity has meant an erosion of market share in the obesity sector for Novo Nordisk. The Danish company has now formed a partnership to provide Him & Hers customers access to the NovoCare Pharmacy.
Novo Nordsik’s CEO Lars Fruergaard Jørgensen said: "In the first quarter of 2025, we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments. However, we have reduced our full-year outlook due to lower-than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US.”