Novo Nordisk faces 'show me' moment to boost Wegovy growth after US copycat ban
New Wegovy prescriptions have increased by about 33% since May 22, when a U.S. Food and Drug Administration ban on so-called compounded versions of Wegovy took effect, amounting to 181,200 in the week ended July 18, according to data from IQVIA that was shared with Reuters by industry analysts.
Total Wegovy prescriptions have also increased, narrowing the lead for Eli Lilly and Co's (LLY.N), opens new tab Zepbound. In the week ended May 23, U.S. Zepbound prescriptions exceeded Wegovy by nearly 175,000. By July 18, the gap was about 133,000.
Early signs of a shift come at a critical juncture for Novo. After Wegovy's initial stunning success, investor confidence was rattled when Zepbound and compounders started to slow the drug's growth. And then in May, the Danish company cut its full-year sales and earnings forecasts and announced the surprise exit of Chief Executive Lars Fruergaard Jorgensen, citing market challenges and a stock price nearly 60% below its 2024 peak.
Jorgensen said at the time he expected the FDA compounding ban to lift sales in the second half of this year. Investors are keen to hear whether that is still likely when the company reports quarterly earnings on August 6.
That leaves the drugmaker in what Barclays analyst Emily Field called a "show me" phase - no longer buoyed by optimism about a turnaround but under pressure to deliver. She has an "overweight" rating on Novo's shares.
"We thought this trajectory change (in new prescriptions) would get the shares moving, but not so far," Berenberg analyst Kerry Holford told Reuters. "I suspect investors are now waiting for the (second quarter) update - will they/won't they trim guidance range? I think they will trim the top." Berenberg has a "hold" rating on Novo.
Novo did not respond to a request for comment.
Investors and analysts note that the IQVIA prescription data is incomplete, because it does not capture sales of Wegovy through the company's direct-to-consumer platform, NovoCare, launched in March. They estimate the channel is still a small slice of overall Wegovy volume.
"We would hope to see strong growth from the NovoCare channel but are cognizant that this may come at initially lower prices" due to discount offers, said Marcus Morris-Eyton, a portfolio manager at Alliance Bernstein, whose fund holds Novo shares.
"Sentiment towards Novo Nordisk is currently exceptionally weak, but given low expectations, the low valuation and hopefully accelerating prescription data in (the second half of 2025) we believe the market is underestimating Novo's long term growth potential," he said.
Booming sales of Wegovy catapulted Novo to become Europe's most valuable listed company, peaking in June 2024 at about 615 billion euros, after the weekly injection became the first highly-effective obesity treatment approved in the U.S. in 2021.
But supply disruptions and gaps in health insurance coverage for Wegovy helped fuel the market for cheaper compounded - or copycat - versions, which are allowed under U.S. law when drugs are in shortage.
Investor sentiment on Novo soured after the company lost ground to U.S. rival Eli Lilly, which launched Zepbound in late 2023.
In its first full-year forecast downgrade since Wegovy's launch, Novo said in May it expected local-currency sales growth of 13–21%, down from a previous forecast of 16–24%. Operating profit growth is projected at 16–24%, versus 19–27% previously.
Capturing more of the patients who had turned to compounded drugs is key to meeting those targets. The FDA determined that Wegovy was no longer in shortage in February, leading to the ban on compounded versions. Novo has rolled out new tactics to bring patients back, including a limited-time discount for one month's supply, and secured better coverage from insurer CVS Health.
Analysts at Berenberg and UBS are sceptical these moves will provide enough momentum and expect that Novo will reduce or narrow its full-year guidance ranges, according to research notes. TD Cowen said the outcome was hard to predict due to limited visibility on NovoCare. Bank of America and Guggenheim said they did not expect another guidance cut and Barclays said it was unlikely.
($1 = 0.8513 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
21 minutes ago
- The Independent
Team breaking scams ‘spell' stops £3.5m going to criminals in first half of 2025
A fraud prevention team set up to 'break the spell' on victims has stopped £3.5 million of funds getting into the hands of criminals in the first six months of this year. Santander UK's specialist Break the Spell team intervenes in situations where it is suspected that customers are being tricked and manipulated by scammers such as romance and payments fraudsters. Victims of crimes such as romance fraud can end up being highly manipulated by a complex web of stories. They may also be discouraged by criminals from speaking to anyone or encouraged to lie if their loved ones or their bank ask them what is happening. Santander's specially-trained team, which uses behavioural psychology, encourages people to open up and supports them, for example by signposting them to further sources of support such as Citizens Advice and the Samaritans, depending on the circumstances. Cases may be referred to it when there are 'red flags' with payments that people are attempting to make. Referrals may also be made from branches. Michelle Pilsworth, head of fraud and customer experience, said the crime dealt with by the team 'is a particularly horrible and cruel crime'. She told the PA news agency that the team supports people who have been tricked into sending money to people they believe they are in a relationship with, as well as people who have been tricked into believing they are helping organisations such as the police or HM Revenue and Customs. Ms Pilsworth said: 'The reason it's complex is the level of social engineering… a quick call is not going to 'break the spell'.' She continued: 'We have to work a long time with them to try and help them see that that is a spell that they're under.' Ms Pilsworth said the team was set up to help understand what fraud victims are going through and to 'work with them'. In some cases, victims may be starting to have their own doubts about a fraud following an initial call from the bank, by the time they are contacted by the Break the Spell team. 'Quite often they will say by that point: 'Yes, it doesn't sound right, I've had time to think',' Ms Pilsworth said. 'At that point we will break the spell and we will educate them and stop the payment, protect the funds, all that good stuff.' But for some people, further intervention may be needed, she said, which could be via calls or branch visits. Staff work to build trust with the customer over time. As the customer explains to staff what they have been told, seeds of doubt in the customer's mind may then start to emerge, for example if they recall that they were expecting to meet the romance scammer but they did not turn up. Ms Pilsworth said: 'We get them to realise what's happening to them. And then, it's all about support, how do we support that person.' Scammers will often try to regain their victim's trust, and so for some people, changing their phone number is a way to stop contact. Some scammers may even pretend that they can help victims recoup funds they have already lost. 'Many colleagues keep customers for days, weeks, sometimes months, because it's a long process,' said Ms Pilsworth. Sometimes people may feel embarrassed or angry, but Ms Pilsworth said: 'We say: 'Look, this can happen to anybody, from the work we've done we can see this happens to anyone'.'
Daily Mail
21 minutes ago
- Daily Mail
Another UK-listed mining firm starts buying up bitcoin - here's why
Hamak Gold has become the third UK-listed miner to start buying bitcoin, spending nearly £1.8million on the cryptocurrency. A number of bitcoin treasury companies (BTCs) have quickly emerged on the London Stock Exchange, with firms listing or overhauling their entire business in order to focus on the new strategy. BTCs accumulate more and more bitcoin, attracting waves of investors looking for exposure to a 'bitcoin yield', which is a return denominated not in fiat currencies like sterling but in units of the cryptocurrency. The trend, pioneered by US-based MicroStrategy, has led to these London-listed firms racking up enormous share price gains over the last couple of months. But small, listed gold miners are now getting in on the action. Hamak told investors on Wednesday it had bought 20 bitcoin at an average price of £88,569 each, marking its 'first foray into digital asset investment'. The firm, which is otherwise focused on a Liberian gold mine, said the move 'reflects a proactive approach to value creation and balance sheet optimisation'. Hamak launched the strategy earlier this year after a leadership shake-up, with the promise of offering investors 'exposure to both gold and bitcoin under a single, transparent structure'. More recently it saw shares soar after appointing well-known US economist Dr Arthur B. Laffer a founding member of its advisory board. Laffer said in a comment on Wednesday: 'I am extremely excited by the direction Hamak Gold is heading, and I'm proud to have been invited to join the company's first-rate team and to be actively involved in helping facilitate Hamak's growth in any way that I can.' It follows similar moves from Zinc miner Panther Metals, which is investing up to £4million in bitcoin as collateral to fund mining acquisitions, and Bluebird Mining Ventures. Victoria Scholar, head of investments at Interactive Investor, highlighted 'gloomy' financial results posted by all three firms. She said: 'Panther Metals and Hamak both reported full-year losses in April while just this week Bluebird Mining announced a first half loss of $2.6million, a sharp increase year-on-year. 'It looks like the companies have decided to take a gamble on the burgeoning cryptocurrency as they haven't got much to lose. 'All three, as you would expect of small mining companies, are losing money. 'Raising fresh capital is essential so perhaps a sexy bitcoin strategy makes it easier to raise cash. And investors appear to be enjoying the bitcoin strategy, as shares in these companies have been performing much better lately.' What does it mean for investors? Bluebird has seen its share price soar nearly 400 per cent since it launched the strategy, reviving the business after struggling with financial losses, while Panther says it is 'redefining what a modern resource company can be'. Hamak shares soared 13.6 per cent to 6.7p by midday on Wednesday having added nearly 980 per cent since the start of the year. The company listed in March 2022 and has never generated revenues, as it is still at the exploration stage. Stockopedia's Stock Rank gives Hamak a 19/100 score overall, with a 14 for quality and just an 8 for value. Dan Coatsworth, investment analyst at AJ Bell, says BTCs argue owning bitcoin is a way to 'preserve value and mitigate against inflation and geopolitical risks'. However, he warns, 'investors need to take care in these situations'. Coatsworth said: 'The reality is that many small cap companies are typically cash-poor, constantly raising new funds on the market to keep the lights on. 'They rarely have cash lying around for a rainy day and anything in the bank is needed to support the business. 'Prices can often move fast – both up and down – and valuations have moved out of kilter with the underlying fundamentals of the company.' Sign of the top for bitcoin? Crypto expert Glen Goodman told This is Money earlier in July he has an 'early inkling' that the emergence of bitcoin treasury companies 'may be a sign of the top' for the cryptocurrency's recent run. Bitcoin is up by around 25 per cent since the start of the year at $117,619.10, having hit yet another all-time high of $122,979.87 earlier this month. Goodman said: 'Because it's been successful for those companies. More companies are jumping on the band wagon 'As their shares go up they issue more equity, so they dilute the share price of the existing shares, to buy more bitcoin for their treasury. 'And then that bitcoin attracts new investors who push the share price higher – and then they issue more equity. 'You can see where this is heading.'
Reuters
22 minutes ago
- Reuters
U.S. Steel appoints three American board directors after Nippon deal
July 30 (Reuters) - U.S. Steel (5401.T), opens new tab said on Wednesday it has appointed three American directors to its board, more than a month after Nippon Steel closed its $14.9-billion acquisition of the company. Its board is now comprised of seven directors, four of whom are U.S. citizens, including three independent U.S. directors. Nippon had signed a national security agreement with the Trump administration in a bid to get the go-ahead for its acquisition of U.S. Steel. The agreement gave U.S. President Donald Trump a non-economic golden share and the authority to name a member to the board. The appointments include former AT&T CEO John Donovan, ex-Lockheed Martin chief Robert Stevens and Timothy Keating, who is currently the top boss at Keating Global.
