Novo Nordisk Adjusts Supply of Wegovy Obesity Treatment in the U.S.
Novo Nordisk announces retention of Wegovy supply in the U.S. amidst high demand, leading to Ozempic shortage. Expanding capacity but restricted supply of lower doses. Temporary halt in promotions.
Troy D. Hanson
August 12, 2023
Danish pharmaceutical company Novo Nordisk has announced that it will be retaining a portion of the lower-strength starter doses of its Wegovy obesity treatment in the U.S. market in order to ensure sufficient supplies for patients who are already using the drug. This decision comes amidst a surge in demand for Wegovy.
In May, Novo Nordisk had previously indicated a reduction in the supply of lower-dose strengths, and now they anticipate that many patients may experience challenges in filling their lower-dose Wegovy prescriptions until September.
The popularity of Wegovy has also led to a significant increase in demand for Novo Nordisk's diabetes drug, Ozempic. Some patients have been using Ozempic "off label" as a treatment for obesity, as it contains the same active ingredient as Wegovy. Consequently, this has resulted in shortages of Ozempic for patients who rely on it for managing their diabetes.
Novo Nordisk has acknowledged that, due to higher-than-expected volume growth for both Ozempic and Wegovy in recent years, as well as ongoing volume growth and capacity limitations at certain manufacturing sites, periodic supply constraints and drug shortage notifications across multiple products and geographical regions are expected.
In response, Novo Nordisk is investing in expanding both internal and external capacity in order to enhance short-term and long-term supply. However, to ensure continuity of care, the supply of lower-dose strengths of Wegovy in the U.S. will continue to be restricted as supply capacity gradually expands.
In an effort to avoid further stimulating demand, Novo Nordisk has temporarily halted certain promotional activities for Wegovy and is closely managing shipments of the treatment to wholesalers in the U.S., ensuring a steady level of inventory.
Wegovy is currently available in the U.S., Denmark, Norway, and Germany. Although it has been approved for use in the U.K., it is not yet available there.
Novo Nordisk Raises Full-Year Guidance on Strong Demand for Ozempic and Wegovy
Novo Nordisk, a leading pharmaceutical company, has revised its full-year guidance, citing strong demand for its drugs Ozempic and Wegovy. The company reported a net profit of 19.43 billion Danish kroner ($2.86 billion) in the second quarter, compared to DKK13.32 billion in the same period last year. Overall group sales also saw an impressive increase of 32% year-on-year, reaching DKK54.3 billion.
While these figures fell short of analysts' expectations, which forecasted a net profit of DKK20.63 billion and sales of DKK55.47 billion, the discrepancy can be attributed to lower insulin sales and a decline in the company's rare diseases business.
One standout performer for Novo Nordisk was Wegovy, with sales soaring to DKK7.52 billion in the quarter, a significant increase from DKK1.18 billion recorded during the same period last year.
In response to its positive performance, Novo Nordisk has raised its sales growth projections for 2023 to 27%-33% from the previous range of 24%-30%. Similarly, the company has adjusted its operating profit growth forecast to 31%-37% from 28%-34%, both in local currencies.
Recently, Novo Nordisk received much attention when a trial of Wegovy found that not only does it aid weight loss, but it also reduces the risk of heart attacks, strokes, and cardiovascular deaths by 20%. As a result, the company's shares rose by 17% on the day. This surge in popularity has propelled Novo Nordisk to become Europe's second-most valuable company by market capitalization, trailing behind luxury giant LVMH Moet Hennessy Louis Vuitton.
To enhance liquidity for shareholders, Novo Nordisk has decided to split its units in a two-for-one ratio. This move aims to align price levels with market practice and ensure ease of trading for the company's B shares on Nasdaq Copenhagen and American depositary receipts on the New York Stock Exchange.
Overall, Novo Nordisk's steady growth, driven by the success of Ozempic and Wegovy, positions it optimally in the pharmaceutical industry. With its ongoing commitment to innovation and expansion, the company is poised for continued success in the coming years.