Novo Nordisk sales surge drives value towards $500bn

Fuelled by its diabetes and obesity drugs, Novo Nordisk has reported revenues up a third in 2023, sparking a rise in an already inflated share price that briefly pushed the group’s valuation above $500 billion this morning.

A correction had pulled it back slightly below that level at the time of writing but, according to Bloomberg, Novo Nordisk is only the second European company to ever breach that threshold after luxury goods giant LVMH.

The company’s net sales rocketed 36% to DKK 232 billion ($33.7 billion) last year at constant exchange rates, while operating profit grew 44% to almost DKK 103 billion. The results have been driven by strong gains for its diabetes and obesity category on the back of its Ozempic and Wegovy, both based on GLP-1 agonist semaglutide.

Ozempic for diabetes was up 60% to almost DKK 98 billion year-on-year, while obesity therapy Wegovy was up a stellar 407% to DKK 31 billion, despite ongoing shortages in supply that have led to restrictions on the availability of lower starting doses for both products.

Novo Nordisk said that it had started to increase the supply of starting doses for Wegovy in the US since the start of the year thanks to investments in production capacity.

The spike in the company’s share price this morning likely stemmed as much from its expectations for 2024 as its performance in 2023, during which big revenue gains were recorded each quarter.

Novo Nordisk is still expecting strong growth this year of 18% to 26% at constant exchange rates, with a 21% to 29% rise predicted for operating profit, which has been labelled by some analysts as conservative.

“We are very pleased with the strong performance in 2023, reflecting that more than 40 million people are now benefitting from our innovative diabetes and obesity treatments,” commented the Danish group’s chief executive, Lars Fruergaard Jørgensen.

“We continue to make progress on our strategic aspirations,” he added. “Our focus in 2024 will be on reaching more patients, progressing and expanding our pipeline, as well as the continued significant expansion of our production capacity.”

Among updates to R&D highlighted by the company were the completion this month of the first phase 3a trial IcoSema, a fixed-ratio once-weekly combination of basal insulin icodec and semaglutide in patients with type 2 diabetes who need insulin therapy, and a phase 1 trial with oral amycretin.

Novo Nordisk has high hopes for IcoSema, as it could reduce the injection burden on patients to just one a week from a current level of up to 28 per week for patients who can’t control their blood sugar with insulin alone. The COMBINE trial also showed improved blood glucose control and lower rates of hypoglycaemia with IcoSema than basal insulin alone.

Amycretin, meanwhile, is Novo Nordisk’s latest entry into its clinical-stage obesity pipeline and is a co-agonist of GLP-1 and amylin. A long-acting subcutaneous form of the drug suitable for once-weekly injection is also in early-stage testing.

It also confirmed the termination of belcesiran, an siRNA drug for liver disease caused by alpha-1-antitrypsin deficiency (AATD), due to “portfolio considerations”.