Copenhagen (AFP) – Danish pharmaceutical giant Novo Nordisk posted a sharp rise in second-quarter net profit Wednesday, but rising competition is weighing on sales of its diabetes and obesity treatments Ozempic and Wegovy in the United States. The group reported a net profit of 26.5 billion kroner ($4.1 billion), a 32 percent increase from the same period last year, while sales increased by 18 percent to 76 billion kroner.
The drug maker lowered its annual earnings outlook last week, causing its share price to deepen a year-long slide. The company had already cut its forecast in May and announced the departure of chief executive Lars Fruergaard Jorgensen. “We are in a crisis of confidence because we have revised our forecasts downward,” Jorgensen said in an interview on Danish public television. He noted the company is still growing and it is reporting record results every quarter.
“Before this growth is slightly lower, or even considerably lower than what we had predicted a few quarters ago,” said Jorgensen, acknowledging that repeated disappointments over a short period “is reflected in the share price.” The popularity of Novo Nordisk’s weight-loss treatments had made it a darling of investors, boosting its share price and at one point making it Europe’s most valuable company.
But Novo Nordisk shares have lost more than two-thirds of their value since peaking in June last year. They fell more than three percent on Wednesday. Jorgensen said that the company is implementing measures to improve its commercial performance and cut costs, and that it probably would not be able to avoid layoffs.
Novo Nordisk announced last week that it was promoting Maziar Mike Doustdar, its vice president for international operations, to succeed Jorgensen. It faces growing competition from rival treatments made by US group Eli Lilly in the United States. Novo Nordisk’s limited production capacity had also led the US Food and Drug Administration to temporarily allow pharmacies to create so-called “compound” or copycat versions of Ozempic and Wegovy.
While that authorisation has expired, Novo Nordisk lowered its 2025 outlook due to the persistent use of compounded copycat versions of the drugs.
© 2024 AFP
