Weight-Loss Drug Giant Novo Nordisk Grew In All The Right Places Last Year

Weight-Loss Drug Giant Novo Nordisk Grew In All The Right Places Last Year
Paul Allison, CFA

26 days ago2 mins

What’s going on here?

Novo Nordisk’s profit put on weight last year, one of the few spots where the Danish weight-loss drug giant will accept a little extra bloating.

What does this mean?

Weight-loss drugs promise to keep our waistlines in check, and with nearly half of US adults already interested in trying the newly mainstream medication, it’s no wonder that the sector was one of last year’s biggest investing themes. Novo was a real standout: its Ozempic and Wegovy products flew off the pharmacists’ shelves especially quickly, making up 40% of the firm’s total sales. That meant Novo’s obesity care department made 150% more revenue than the year before, enough to secure expectation-beating results as a whole. Plus, with doctors expected to write scripts for Ozempic and Wegovy as if the Sackler family were looking over their shoulders, Novo’s predicting revenue that’s another 22% higher this year.

Novo obesity sales
Source: Novo Nordisk

Why should I care?

Zooming out: Let’s get medical.

Novo is now, ironically, Europe’s heftiest firm. Investors piled into the stock last year, won over by the sheer number of potential slimmers out there. More than two-thirds of US adults are said to be overweight or obese, after all. On top of that, though, are the company’s claims that Wegovy could ease the symptoms of ailments like kidney and heart disease. If Novo can prove that, insurance companies will be more likely to cover the cost, making the medicines more accessible to the masses.

Novo stock

The bigger picture: Patents are a virtue.

Novo’s Swiss rival didn’t fare quite as well, reporting lower-than-expected sales and profit for last year and underwhelming predictions for this year. Novartis pinned the blame on expiring patents on some of its biggest-selling medications. When they time out, rivals can launch competing versions for less, nabbing market share faster than you can get to the drugstore. That’s a timely reminder for investors: medical companies can’t get away with being one-hit wonders forever.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG