Copenhagen (AFP) – Danish drugmaker Novo Nordisk, known for its blockbuster diabetes and weight-loss treatments Ozempic and Wegovy, on Tuesday lowered its earning forecasts again as it unveiled a new chief executive to tackle “recent market challenges”. The downward revisions prompted heavy selling by investors on the Copenhagen stock exchange, with Novo shares plunging 22 percent in afternoon trading.
The company has faced growing headwinds in the key US pharmaceutical market, where the two drugs, known as GLP-1 injections, have seen their dominance challenged by rivals including Eli Lilly. A rule by the US Food and Drug Administration allowing pharmacies to create so-called “compound” copycat versions of the drug, after high demand led to shortages, has also dented earnings, Novo said.
“Despite the expiry of the FDA grace period for mass compounding on May 22, 2025, Novo Nordisk market research shows that unsafe and unlawful mass compounding has continued,” it said in a statement. It now expects full-year sales growth overall of eight to 14 percent – down from the 13 to 21 percent expected after a first forecast downgrade earlier this year. Operating margins are seen reaching 10 to 16 percent, instead of the forecast of 16 to 24 percent.
– ‘Speed and ambition’ – The lower forecasts came as Novo reported Tuesday an 18 percent sales increase for the first half of the year, while operating profit growth fell to 29 percent after growth of 40 percent in the same period last year. The “market challenges” prompted Novo to announce in May the departure of its chief executive Lars Fruergaard Jorgensen, who will be replaced by Maziar Mike Doustdar, currently its vice president for international operations.
“We are confident that he is the best person to lead Novo Nordisk through its next growth phase,” board chairman Helge Lund said in a statement. “This is an important moment for Novo Nordisk,” Lund added. “The market is developing rapidly, and the company needs to address recent market challenges with speed and ambition.”
In the statement, Doustdar said: “I come to this role with a sense of urgency, a laser focus on high performance, and a fierce determination for Novo Nordisk to aim higher than it’s ever done.” Novo Nordisk’s full first-half results will be published August 6.
© 2024 AFP
