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Novo Nordisk A/S (NVO - Free Report) reported third-quarter 2024 earnings of 90 cents per American Depositary Receipt (ADR), which marginally missed the Zacks Consensus Estimate of 91 cents. The company had reported earnings of 73 cents per ADR in the year-ago quarter.
Revenues of $10.5 billion increased 21% in Danish kroner (DKK) and 23% at constant exchange rate (CER) in the reported quarter. However, total revenues also missed the Zacks Consensus Estimate of $10.7 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, as well as greater Rare disease sales.
All growth rates mentioned below are on a year-over-year basis and at CER.
Stay up-to-date with all quarterly releases:See Zacks Earnings Calendar.
NVO’s Q3 Results in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care and Rare disease.
The Diabetes and Obesity Care segment reported sales of DKK 66.7 billion in the reported quarter, which grew 23%. In Diabetes Care, fast-acting insulin Fiasp’s revenues were down 32%. NovoRapid revenues increased 16% and Human insulin revenues increased 8%. Premix insulin (Ryzodeg and NovoMix) revenues grew 13% year over year. Sales of long-acting insulins (Tresiba, Xultophy, Levemir and Awiqli) jumped 10% in the third quarter.
Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 29.8 billion for the quarter, up 26%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 5.5 billion for the quarter, up 23%. Victoza sales declined 114% during the reported quarter due to the impact of negative gross-to-net sales adjustments as well as lower volumes.
Obesity Care (Saxenda and Wegovy) sales were up 55% to DKK 18.8 billion. Wegovy sales continued to soar, recording DKK 17.3 billion in sales, representing a surge of 81%, driven by robust demands and Novo Nordisk’s efforts to meet the same.
Year to date, shares of NVO have gained 6.5% compared with the industry’s 12.8% growth.
Image Source: Zacks Investment Research
Sales in the Rare disease segment were up 17% to DKK 4.6 billion in the third quarter of 2024. Sales of rare blood disorder products were DKK 3 billion, up 1%. Sales of hemophilia A products increased 4%. Hemophilia B products’ sales increased 6%. Sales of NovoSeven declined 3% to DKK 2 billion. Sales of Novo Nordisk’s rare endocrine disorder products soared 126% to DKK 1.2 billion.
Sales and distribution costs climbed 20% in the reported quarter to DKK 15.2 billion. This increase was due to promotional activities related to Wegovy in North America. In International Operations, costs related to Obesity care market development activities, as well as promotional activities for GLP-1 diabetes products, contributed to the increase.
Research and development (R&D) costs were up 17% to DKK 9.5 billion. The rise in R&D costs was driven by increased clinical activity for late-stage studies and research activities mainly related to Obesity Care.
NVO Updates 2024 Financial Outlook
Novo Nordisk now expects its sales to grow in the band of 23-27% compared with the previous guidance of 22-28%. The company also changed its operating profit growth to 21-27% compared with the previous guidance of 20-28%.
The updated sales outlook at CER reflects growth in both North America Operations and International Operations, primarily driven by increased sales volumes of GLP-1-based treatments for obesity and diabetes care. Per NVO, the impact of continued pricing pressure within Diabetes and Obesity care is also captured in the updated guidance.
Novo Nordisk has high expectations from this segment, especially from Ozempic in the diabetes 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.
Our Take
Novo Nordisk’s earnings and revenues missed estimates in the third quarter of 2024. This was mainly because Diabetes and Obesity care sales failed to meet investor expectations. However, the key drugs in this segment have recorded year-over-year increases in revenues. 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.
Novo Nordisk’s formidable adversary in the Obesity care market is Eli Lilly (LLY - Free Report) . LLY has been investing heavily to meet the growing demand for weight management medicines. Lilly reported third-quarter financial results last week. Its most popular products are its tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. However, sales of these drugs disappointed due to inventory issues, per Lilly.
Mounjaro recorded sales of $3.11 billion during the quarter compared with $3.09 billion in the previous quarter. The reported sales figure missed the Zacks Consensus Estimate of $3.70 billion. Lilly’s Zepbound, which was launched in November 2023, recorded sales of $1.26 billion in the quarter compared with $1.24 billion in the previous quarter. Zepbound revenues also missed the Zacks Consensus Estimate of $1.65 billion.
NVO’s Zacks Rank & Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #3 (Hold).
Allogene Therapeutics’ loss estimates have remained constant at $1.41 per share for 2024 over the past 60 days, while that for 2025 has narrowed from $1.46 to $1.45 per share. ALLO’s shares have lost 6.9% year to date.
Allogene Therapeutics’ earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 11.82%.
Novartis’ earnings estimates have risen from $7.50 to $7.56 per share for 2024 over the past 60 days, while that for 2025 has increased from $8.30 to $8.33. NVS’ shares have risen 8.3% year to date.
Novartis’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 2.22%.
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NVO Misses Q3 Earnings & Revenue Estimates, Updates 2024 View
Novo Nordisk A/S (NVO - Free Report) reported third-quarter 2024 earnings of 90 cents per American Depositary Receipt (ADR), which marginally missed the Zacks Consensus Estimate of 91 cents. The company had reported earnings of 73 cents per ADR in the year-ago quarter.
Revenues of $10.5 billion increased 21% in Danish kroner (DKK) and 23% at constant exchange rate (CER) in the reported quarter. However, total revenues also missed the Zacks Consensus Estimate of $10.7 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, as well as greater Rare disease sales.
All growth rates mentioned below are on a year-over-year basis and at CER.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
NVO’s Q3 Results in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care and Rare disease.
The Diabetes and Obesity Care segment reported sales of DKK 66.7 billion in the reported quarter, which grew 23%. In Diabetes Care, fast-acting insulin Fiasp’s revenues were down 32%. NovoRapid revenues increased 16% and Human insulin revenues increased 8%. Premix insulin (Ryzodeg and NovoMix) revenues grew 13% year over year. Sales of long-acting insulins (Tresiba, Xultophy, Levemir and Awiqli) jumped 10% in the third quarter.
Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 29.8 billion for the quarter, up 26%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 5.5 billion for the quarter, up 23%. Victoza sales declined 114% during the reported quarter due to the impact of negative gross-to-net sales adjustments as well as lower volumes.
Obesity Care (Saxenda and Wegovy) sales were up 55% to DKK 18.8 billion. Wegovy sales continued to soar, recording DKK 17.3 billion in sales, representing a surge of 81%, driven by robust demands and Novo Nordisk’s efforts to meet the same.
Year to date, shares of NVO have gained 6.5% compared with the industry’s 12.8% growth.
Image Source: Zacks Investment Research
Sales in the Rare disease segment were up 17% to DKK 4.6 billion in the third quarter of 2024. Sales of rare blood disorder products were DKK 3 billion, up 1%. Sales of hemophilia A products increased 4%. Hemophilia B products’ sales increased 6%. Sales of NovoSeven declined 3% to DKK 2 billion. Sales of Novo Nordisk’s rare endocrine disorder products soared 126% to DKK 1.2 billion.
Sales and distribution costs climbed 20% in the reported quarter to DKK 15.2 billion. This increase was due to promotional activities related to Wegovy in North America. In International Operations, costs related to Obesity care market development activities, as well as promotional activities for GLP-1 diabetes products, contributed to the increase.
Research and development (R&D) costs were up 17% to DKK 9.5 billion. The rise in R&D costs was driven by increased clinical activity for late-stage studies and research activities mainly related to Obesity Care.
NVO Updates 2024 Financial Outlook
Novo Nordisk now expects its sales to grow in the band of 23-27% compared with the previous guidance of 22-28%. The company also changed its operating profit growth to 21-27% compared with the previous guidance of 20-28%.
The updated sales outlook at CER reflects growth in both North America Operations and International Operations, primarily driven by increased sales volumes of GLP-1-based treatments for obesity and diabetes care. Per NVO, the impact of continued pricing pressure within Diabetes and Obesity care is also captured in the updated guidance.
Novo Nordisk has high expectations from this segment, especially from Ozempic in the diabetes 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.
Our Take
Novo Nordisk’s earnings and revenues missed estimates in the third quarter of 2024. This was mainly because Diabetes and Obesity care sales failed to meet investor expectations. However, the key drugs in this segment have recorded year-over-year increases in revenues. 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.
Novo Nordisk A/S Price and Consensus
Novo Nordisk A/S price-consensus-chart | Novo Nordisk A/S Quote
Novo Nordisk’s formidable adversary in the Obesity care market is Eli Lilly (LLY - Free Report) . LLY has been investing heavily to meet the growing demand for weight management medicines. Lilly reported third-quarter financial results last week. Its most popular products are its tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. However, sales of these drugs disappointed due to inventory issues, per Lilly.
Mounjaro recorded sales of $3.11 billion during the quarter compared with $3.09 billion in the previous quarter. The reported sales figure missed the Zacks Consensus Estimate of $3.70 billion. Lilly’s Zepbound, which was launched in November 2023, recorded sales of $1.26 billion in the quarter compared with $1.24 billion in the previous quarter. Zepbound revenues also missed the Zacks Consensus Estimate of $1.65 billion.
NVO’s Zacks Rank & Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #3 (Hold).
Some better-ranked pharma stocks are Allogene Therapeutics (ALLO - Free Report) and Novartis (NVS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Allogene Therapeutics’ loss estimates have remained constant at $1.41 per share for 2024 over the past 60 days, while that for 2025 has narrowed from $1.46 to $1.45 per share. ALLO’s shares have lost 6.9% year to date.
Allogene Therapeutics’ earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 11.82%.
Novartis’ earnings estimates have risen from $7.50 to $7.56 per share for 2024 over the past 60 days, while that for 2025 has increased from $8.30 to $8.33. NVS’ shares have risen 8.3% year to date.
Novartis’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 2.22%.