When
Novo Nordisk
reports earnings on Thursday, investors will be focused on sales of its blockbuster anti-obesity medicines, which have captured the cultural imagination over the past year.
Novo’s (ticker: NVO) American depository receipt is up more than 40% this year on excitement over its weight-loss and Type 2 diabetes drugs. The company’s market value has climbed to roughly $430 billion, making it one of the most valuable healthcare companies in the world.
The earnings report comes amid what has been a surprisingly grim two weeks for the pharmaceutical sector: Investors have sold off shares of virtually every large drugmaker that has reported earnings in recent days. That has led to share-price losses for
Sanofi
(SNY),
Amgen
(AMGN), and other companies. Investors have even dumped shares of companies as they reported generally good news, as was the case with
GSK
(
GSK
) on Wednesday.
Novo and its competitor
Eli Lilly
(LLY) have been the exceptions to the rule in the drug sector so far this year, rising while most of the rest of the pharmaceutical sector has fallen.
While Novo and Lilly’s shares have skyrocketed, the
NYSE Arca Pharmaceutical Index
(DRG), which tracks drug stocks, is down 1.1% on the year. Investors’ reaction to Novo’s third-quarter earnings Thursday will show whether that trend continues.
Novo took some of the intrigue out of Thursday’s announcement in mid-October, when it previewed its earnings and raised its full-year estimates. The company said sales were up 38% in the third quarter of 2023 compared with the same period last year, and operating profits were up 47%.
At the time, Novo said it expects sales for 2023 to climb between 32% and 38% from 2022 to 2023, up from its prior estimate of an increase of between 27% and 33%. It projected full-year operating profits to grow between 40% and 46%, up from its previous estimate of between 31% and 37%.
Novo had also raised its sales guidance to reflect increased expectations for sales of Ozempic, its Type 2 diabetes drug. A higher-dose version of Ozempic, called Wegovy, is sold as a weight-loss treatment.
Wall Street analysts expect Novo to report earnings of 4.81 Danish krone per share on sales of 57.8 billion Danish krone ($8.2 billion) for the third quarter, according to FactSet. Sales were 45.6 billion Danish krone, or $6 billion, in the same quarter last year.
One question for the company is the progress of its efforts to ramp up Wegovy and Ozempic production to meet exploding demand.
Novo reports its financial results on Thursday morning. The company is hosting an investor call at 8 a.m. ET.
Write to Josh Nathan-Kazis at [email protected]
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