Novo Nordisk (NYSE:NVO) raised its full-year guidance after reporting continued demand for its weight-loss treatments, but weaker-than-expected sales of its oral Wegovy medication and disappointing clinical trial results for a next-generation obesity therapy weighed heavily on investor sentiment.
The company’s shares dropped 6% during US trading on Tuesday, while its Copenhagen-listed stock declined 4.2% after European markets opened on Wednesday.
Company narrows full-year guidance
The Danish pharmaceutical group now expects adjusted sales and adjusted operating profit to decline by no more than 6% at constant exchange rates this year.
That represents an improvement from its previous guidance, which projected declines of between 4% and 12% for both measures.
The stronger outlook reflects continued demand for Novo Nordisk’s portfolio of obesity treatments, despite an increasingly competitive market.
Wegovy pill sales miss expectations
Investors were disappointed after the oral version of Wegovy generated second-quarter sales of 3.2 billion Danish kroner, or approximately $500 million, below the 3.3 billion kroner forecast by analysts surveyed by FactSet.
The injectable version of Wegovy continued to perform strongly, producing sales of 19.48 billion Danish kroner during the quarter.
CagriSema trial results raise concerns
Novo Nordisk also reported new clinical trial data for its experimental obesity treatment CagriSema, which failed to match the blood sugar control achieved by Eli Lilly’s (NYSE:LLY) tirzepatide in patients with Type 2 diabetes.
The study showed that CagriSema achieved noninferiority to tirzepatide for the primary weight-loss endpoint, with patients losing 15.2% of their body weight compared with 15.8% for tirzepatide.
However, the treatment did not meet expectations on the second primary endpoint, reducing HbA1c by 1.9% compared with a 2.2% reduction for tirzepatide.
“We expected CagriSema to show non-inferiority on both primary endpoints, but importantly, for Zepbound to numerically outperform on both co-primary endpoints. So, today’s result came in less favorable for CagriSema than expected,” Wolfe Research analyst Alexandria Hammond said in a note.
Financial performance remains solid
Despite the market reaction, Novo Nordisk continued to deliver solid underlying financial results.
Analysts had broadly anticipated that the company would increase its guidance, supported by the continued success of Wegovy since receiving FDA approval as a weight-loss treatment in 2021.
Adjusted sales increased 7% year over year to 78.49 billion Danish kroner during the second quarter.
Net profit declined 21% to 20.99 billion kroner, while adjusted operating profit, a closely watched measure among investors, rose 11% to 33.39 billion kroner.
Novo Nordisk stock price
