CNBC58 minutes agoBusiness1 min read

Novo shares jump 6% as Wegovy pill sales impress, drugmaker hikes outlook

Shares rise over 6% in early trading following Q3 results that surpassed analyst estimates and an upgraded financial outlook.

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Novo reported Q3 sales of 79.2 billion Danish kroner, beating estimates as Wegovy sales surpassed expectations and driving shares up over 6%.
The weight-loss drug maker also raised its full-year revenue and operating profit outlook.

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Why It Matters

Novo pioneered GLP-1 weight-loss drugs but faced increased competition from rival Eli Lilly in the U.S. market.

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Novo posted quarterly earnings ahead of expectations early Wednesday as sales of its Wegovy pill blew past estimates amid continued GLP-1 volume growth globally, sending shares up more than 6% in early trading.

The company updated its outlook to now see adjusted revenue and operating profit growth between negative 2% and 2% at constant exchange rates. It previously saw full-year sales and operating profits, which it hiked in August, at negative 6% to flat for both metrics.

Sales in the third quarter came in at 79.2 billion Danish kroner ($11.9 billion), up 4% year-on-year at constant exchange rates and ahead of FactSet estimates of 73.6 billion kroner. Adjusted operating profit (EBIT) was 31.7 billion kroner, compared with the expected 28.6 billion kroner.

It comes as the Danish weight-loss drug maker is looking to regain momentum following a tumultuous year in which it fell behind rival Eli Lilly.

While Novo pioneered the GLP-1 weight-loss drugs now used by around 10% of Americans, it has struggled to keep the momentum going as chief rival Eli Lilly quickly caught up and surpassed Novo in their by far biggest market, the U.S. Several other pharma companies are also eyeing entry into the lucrative market.

Investors are now laser-focused on the pair's next-generation weight-loss drugs, and whether they can treat obesity-linked diseases such as heart and kidney conditions, sleep apnea and arthritis.

Novo CEO Mike Doustdar told reporters early Wednesday that the company's recovery was gaining traction following successive upgrades to its full-year guidance, but cautioned that a turnaround could not be established on the basis of a single strong quarter.

"Turnaround and recovery is not done based on one data point, on one quarterly good result," Doustdar said, pointing to the progressive improvement in the company's outlook throughout the year.

"That gives me confidence that we're going in the right direction, and then we'll just have to continue working hard to see the recovery in full," he added.

Open Questions

How will Novo sustain its momentum against Eli Lilly?
Can next-generation weight-loss drugs successfully treat obesity-linked diseases?