Weight Loss Miracle Drug Boosts! Novo Nordisk's revenue and profit both increased by 30% in the first half of the year, while raising its full-year performance guidance. | Earnings Report

With the unexpected popularity of its diabetes medication for weight loss, Novo Nordisk has experienced a surge in revenue and profits, triggering a frenzy in the market. Furthermore, with the continuous positive news from the clinical trials of semaglutide, the company has provided strong performance guidance.

On Thursday, August 10th, the manufacturer of the weight loss wonder drug semaglutide, Danish pharmaceutical company Novo Nordisk, announced its first-half performance for the period ending June 30th.

According to the financial report, calculated in Danish kroner, Novo Nordisk's revenue for H1 2023 increased by 29% YoY, reaching DKK 107.7 billion. Operating profit also grew by 30% YoY, reaching DKK 48.9 billion. The company achieved a net profit of DKK 39.2 billion, representing an impressive 43% YoY growth. The net profit margin stood at 36.4%, a 3.4% increase compared to the same period last year.

Notably, the growth in overseas markets, particularly in North America, has attracted attention.

As previously mentioned by Wall Street CN, due to the frenzy among American consumers, Novo Nordisk's GLP-1 drugs experienced widespread shortages, leaving genuine diabetes patients without access to medication. In the first half of the year, Novo Nordisk's revenue in North America increased by 45%, while overall international revenue grew by 14%.

Breaking down the business segments, sales in Novo Nordisk's diabetes and obesity care business increased by 36%, reaching DKK 99 billion, accounting for 92% of its total revenue. The company stated that the growth in diabetes and obesity care business was mainly driven by a 49% increase in sales of GLP-1 drugs and a 158% YoY growth in sales of obesity care products.

Additionally, rare disease drug sales decreased by 18% YoY due to the company's proactive reduction in production.

Just before the release of the financial report, Novo Nordisk announced that the positive results of its highly anticipated Phase III trial, "SELECT," exceeded expectations. This may indicate the potential role of the so-called "miracle weight loss drug" Wegovy in reducing the risk of severe cardiovascular diseases. The statistical significance of a 2.4 mg dose of semaglutide demonstrated a significant reduction in the risk of major adverse cardiovascular events. Furthermore, Phase III trials OASIS 1 and STEP HFpEF for obesity have also been successfully completed.

Looking ahead to the full year of 2023, the company expects revenue and operating profit growth rates, calculated at constant exchange rates (CER), to be between 27% and 33% and between 31% and 37%, respectively. Sales and operating profit growth rates, calculated in Danish kroner, are expected to be 6 percentage points and 9 percentage points lower than the CER values, respectively.

Commenting on the H1 2023 performance, Lars Fruergaard Jørgensen, President and CEO of Novo Nordisk, said: We are very pleased with the sales growth in the first half of 2023. The growth is driven by the increasing demand for our GLP-1-based products for diabetes and obesity treatments, allowing us to serve more patients. The performance in the first six months has enabled us to raise our outlook for the full year.

In terms of research and development, we are excited about the results of the SELECT trial. Obesity is a severe chronic disease with various complications, and the results of the SELECT trial indicate that semaglutide treatment can significantly reduce obesity-related complications.

However, it should be noted that the supply of Novo Nordisk's GLP-1 drugs has not yet been alleviated.

In late July, Novo Nordisk announced on its website that the supply of the weight-loss drug Wegovy in the United States will be "temporarily reduced." Among them, the availability of the lower three doses of Wegovy will be limited, as these doses are used as starting injections on a weekly basis to gradually increase patients' tolerance to the drug and ensure the continuity of care for those currently receiving maintenance treatment. Novo Nordisk stated that the issue may be alleviated once the new contract manufacturer is up and running.

Since the end of 2018, Novo Nordisk's stock price has more than tripled, with a current market value of around $420 billion, surpassing Denmark's GDP and gradually approaching luxury goods giant LVMH Group, with the potential to become the highest-valued company in Europe.

At the time of writing, Novo Nordisk's Class B shares listed on the Copenhagen Stock Exchange fell more than 1%.