Reduced sales growth and operating profit forecasts announced by pharmaceutical company Novo Nordisk for the year 2025 concerning their obesity-related drugs.
In a recent announcement, Danish pharmaceutical giant Novo Nordisk has lowered its sales and operating profit forecast for 2025, citing slowed growth in its semaglutide franchise, increased competition, and geographic penetration issues.
The company's new forecast ranges from 8%-14% for sales growth in local currencies, down from the previous 13-21% range. This revision represents a 5% downward adjustment, primarily due to continued weakness in the incretin drug business, particularly in the U.S. market.
The slowed growth of Novo Nordisk's semaglutide franchise includes its popular obesity drug Wegovy and diabetes drug Ozempic. The company has experienced lower-than-expected uptake for Wegovy in select international markets beyond the U.S., and increased competition from Eli Lilly, its primary rival, has impacted demand for semaglutide products in the U.S.
Moreover, currency effects, where reported sales and profit growth in Danish kroner are expected to be several percentage points lower due to the depreciation of the USD against DKK, have also contributed to the lowered forecast.
Despite strong first-half 2025 results, with sales up 18% and operating profit up 29% (constant exchange rates), Novo Nordisk has tempered its full-year outlook on slower growth anticipated in the second half of the year.
This marks the third forecast cut for 2025, reflecting a moderation in growth driven by market dynamics and competition in the U.S. obesity and diabetes drug markets, along with some geographic penetration issues and currency headwinds.
The decline in Novo Nordisk's shares over the past year is likely due to these struggles in the obesity drug market. The company continues to face competition from U.S. rival Eli Lilly and is still struggling to convince investors of its competitiveness in this sector.
Novo Nordisk's new 2025 operating profit growth forecast is 10%-16%, down from its previous 16-24%. The company remains a manufacturer of obesity drugs, with the weight-loss drug Wegovy being one of its key products.
Investors will be closely watching Novo Nordisk's performance in the second half of 2025 to see if the company can regain its momentum in the obesity and diabetes drug markets.
The decline in Novo Nordisk's shares might be attributed to its struggles in the obesity drug market, particularly the lower-than-expected uptake for Wegovy in select international markets. On the other hand, the company's continued efforts in health-and-wellness and weight-management sectors are evident in their production of nutrition-focused drugs such as Wegovy.
