Yahoo Finance Novo Nordisk (NVO) Q1 Earnings Beat, GLP-1 Drugs Boost Sales
Novo Nordisk A/S NVO reported first-quarter 2024 earnings of 83 cents per American Depositary Receipt (ADR), which surpassed the Zacks Consensus Estimate of 77 cents. The company had reported earnings of 63 cents per ADR in the year-ago quarter.
Revenues of $9.52 billion increased 22% in Danish kroner (DKK) and were up 24% at constant exchange rate (CER) in the reported quarter. Total revenues also beat the Zacks Consensus Estimate of $9.23 billion. The year-over-year increase in revenues was driven by higher Diabetes and Obesity Care sales as GLP-1 product sales increased year over year, partially offset by decreasing insulin and Rare disease sales.
Shares of Novo Nordisk have climbed 24.9% in the year-to-date period compared with the industry’s growth of 12.6%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and at CER.
Quarter in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care and Rare disease.
The Diabetes and Obesity Care segment’s sales reported DKK 61 billion in first-quarter 2024, which represents growth of 27%. In Diabetes Care, fast-acting insulin, Fiasp’s revenues were up 11%. NovoRapid revenues increased 1% and Human insulin revenues declined 15%. Premix insulin (Ryzodeg and NovoMix) revenues increased 12%. Also, sales of long-acting insulins (Tresiba, Xultophy and Levemir) jumped 28% in the reported quarter.
Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 27.8 billion for the quarter, up 43%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 5 billion for the quarter, up 17%. However, Victoza sales of DKK 2.2 billion declined 22% during the reported quarter.
Obesity Care (Saxenda and Wegovy) sales were up 42% to DKK 11 billion. Wegovy sales continued to soar, recording DKK 9.4 billion in sales, which represents a surge of 107%, driven by robust demands and Novo Nordisk’s efforts to meet the same.
Sales in the Rare disease segment were down 3% to DKK 4.4 billion in the first quarter of 2024. Sales of rare blood disorder products were DKK 2.9 billion, down 4%. Sales of hemophilia A products decreased 8%. Hemophilia B products’ sales were, however, up 36%. Sales of NovoSeven decreased 6% to DKK 1.9 billion.
Sales and distribution costs climbed 7% in DKK and 8% at CER in the reported quarter to DKK 13.3 billion. This increase was due to promotional activities related to Wegovy and Rybelsus in North America and International Operations, respectively. In International Operations, costs related to Obesity care market development activities also contributed to the increase.
Research and development costs were up 28% in both DKK and at CER to DKK 8.6 billion. Higher costs were driven by clinical activity for late-stage studies and increased research activities compared with the year-ago quarter.
Administrative costs increased 8% in DKK and 9% at CER to DKK 1.2 billion.
2024 Outlook Updated
Novo Nordisk now expects its sales to grow in the band of 19-27% compared with the previous guidance of 18-26%. The company also expects operating profit to grow in the band of 22-30% compared with the previous guidance of 21-29%.
The updated sales outlook at CER reflects gross-to-net sales adjustments related to prior years in the United States. Overall, the guidance indicates steady sales growth in North America and International Operations, primarily driven by the volume growth of GLP-1-based Diabetes and Obesity care products.
Novo Nordisk has high expectations from this segment, especially from Ozempic in the U.S. market and Wegovy in the obesity care market. The company continues to remain concerned about periodic supply constraints and drug shortages across several products and geographies.
However, the company has been heavily investing in ramping up its internal and external production capacity to tackle both the short and long-term demands of its GLP-1 products.
In the United States, NVO started gradually increasing the supply of the lower dose strengths of Wegovy to meet demand since January 2024. Furthermore, the sales growth indicated in the updated guidance accounts for a gradual roll-out of Wegovy with capped volumes in International Operations.
Novo Nordisk A/S Price and EPS Surprise
Novo Nordisk A/S price-eps-surprise | Novo Nordisk A/S Quote
Our Take
Novo Nordisk’s earnings and revenues beat estimates in the first quarter of 2024 on the back of higher Diabetes and Obesity care sales. Ozempic and Rybelsus have experienced great traction in the market since launch and are expected to drive growth in the upcoming quarters as well. Wegovy, too, has been witnessing robust uptake so far, contributing significantly to the top line.
NVO’s focused efforts to increase the supply capacity for Wegovy in the United States, as well as other international markets, are highly commendable. By gradually meeting the robust demand for the blockbuster obesity care drug, the company will be able to maintain its market share dominance. The increasing demand trend for the drug is encouraging and expected to fuel higher revenue incomes in the upcoming quarters.
Zacks Rank & Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the drug/biotech industry are Ligand Pharmaceuticals LGND, Blueprint Medicines BPMC and Annovis Bio ANVS. While LGND sports a Zacks Rank #1 (Strong Buy), BPMC and ANVS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 earnings per share has remained constant at $4.56. During the same time frame, the estimate for Ligand’s 2025 earnings per share has increased from $5.20 to $5.27. Year to date, shares of LGND have neither booked profits, nor a loss.
Ligand’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 84.81%.
In the past 30 days, the Zacks Consensus Estimate for Blueprint’s 2024 loss per share has narrowed from $5.42 to $5.41. During the same period, the estimate for Blueprint’s 2025 loss per share has narrowed from $2.95 to $2.89. Year to date, shares of BPMC have risen 2.8%.
Blueprint’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 13.26%.
In the past 30 days, the Zacks Consensus Estimate for Annovis’ 2024 loss per share has narrowed from $3.37 to $2.93. The estimate for Annovis’ 2025 loss per share is currently pegged at $2.83. Year to date, shares of ANVS have plunged 67.3%.
Annovis beat estimates in two of the trailing four quarters and missed the mark on the other two occasions, delivering an average negative surprise of 15.70%.
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Novo Nordisk A/S (NVO) : Free Stock Analysis Report
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