Novo Nordisk boosts Wegovy shipments to cope with price pressure from competition from Eli Lilly

Reprinted from: Golden Ten Data Novo Nordisk\’s (NVO.N) first dose of weight loss drug Wegovy has increased in the United States. The company is currently grappling with supply constraints and competition from Eli Lilly (LLY.N).
Wegovy\’s first-quarter sales more than doubled to 9.38 billion crowns ($1.35 billion), but the figure was below analysts\’ expectations due to pricing pressure.
The stock fell even as the company\’s quarterly profit soared and it raised its forecasts, a sign of investors\’ focus on the weight-loss drug.
Expanding production is a key element of Novo Nordisk\’s strategy as it competes with Eli Lilly for dominance in the weight loss market.
The Danish drugmaker has doubled its investment in production capacity this year to about $6.4 billion. That figure does not include its planned $11 billion acquisition of contract manufacturer Catalent Inc. of three factories.
Novo Nordisk CEO Lars fruergard Jorgensen said Thursday that more than 25,000 patients are currently starting to use Wegovy in the United States each week.
That number is up from about 5,000 in December.
Another executive said earlier that the number has quadrupled to about 20,000, a sign that Novo Nordisk is rapidly expanding its supply of the drug, which has helped open up a whole new market.
Given the huge global demand, we will not be able to fully meet global demand in the short or medium term. Chief Financial Officer Karsten Munk Knudsen said in an interview.
Demand for Wegovy and its sister drug Ozempic, which treats diabetes, prompted the company to raise its forecast, saying sales could soar 27% this year. Operating profit could rise 30%.
Analysts said: Novo Nordisk\’s strong first-quarter performance and modest guidance hike are unlikely to distract from Wegovy\’s 11% sales decline. This may be attributed to lower realized prices and supply.
We expect sales of this weight-loss drug to accelerate in the second half of the year on improving supply.
Price Matters The cost of Wegovy and Ozempic has been a point of contention in the United States, as a March study from Yale University estimated that Ozempic costs less than $5 per month to produce.
The drug\’s list price is $936. Wegovy\’s list price is $1,349.
Jorgensen said the Yale study did not take into account the cost of building a production facility.
The CEO said: Numbers like this actually disturb me.
I think it gives patients false hope. To think anyone can produce it at this price.
Chief Financial Officer Knudsen said on the conference call that Wegovy\’s prices are falling as business volume increases. This has to do with the breadth of insurance coverage and competition.
This will also happen for the rest of the year, he said.
In an April 24 letter to Novo Nordisk\’s CEO, Sen. Bernie Sanders said the Senate Health, Education, Labor and Pensions Committee is investigating the prices of the drugs.
About 80% of Wegovy\’s commercially insured patients in the U.S. pay $25 or less per month, according to Novo Nordisk.
As patients gradually increase their use of Wegovy, the drugmaker will continue to impose some restrictions on the use of lower doses of Wegovy.
\”We didn\’t put a time limit on it,\” Senior Vice President Negelle Morris said in an interview.
We do expect demand to continue to exceed supply.
The idea of ​​limiting low-dose drugs is to give patients confidence that once they progress to high doses – intended to be taken long-term – they will be able to continue treatment.
As of this week, the two highest doses of Wegovy are listed in a U.S. Food and Drug Administration (FDA) database that tracks drug shortages.
Eli Lilly also raised its outlook this week and predicted supply and pricing for its competing drug Zepbound would improve this year.
According to reports, the obesity treatment market may soar to more than $80 billion by 2030.
Novo Nordisk said it remains the global leader in GLP-1 drugs, with a market share of 55%.
Novo Nordisk has gained more than 350% in the past four years. If the weight-loss drug company is to close the gap with its U.S. rivals, it may have to work harder.
While analysts have warned that the company\’s stock is overvalued, its 30% discount to Eli Lilly suggests otherwise.