Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Novo Nordisk’s shares plunged more than a fifth on Tuesday, wiping more than €60bn from its value, after it slashed sales and profit forecasts for the year amid competition from US copycat weight-loss drugs.
The Danish manufacturer of Ozempic and Wegovy, one of Europe’s largest companies by market capitalisation, warned that full-year sales growth was expected to be 8 to 14 per cent, sharply lower than its May estimate of 13 to 21 per cent.
It also downgraded its forecast for profit growth for the year, from 16 to 24 per cent to 10 to 16 per cent.
By mid-afternoon in Europe, the shares had fallen about 21 per cent, in a slide that overshadowed its appointment of a new chief executive.
The woes reflect competition in the US weight-loss market from both Novo’s rival Eli Lilly and from “compounded” — copycat — versions of the Danish company’s products.
“For Wegovy in the US, the sales outlook reflects the persistent use of compounded [drugs], slower than expected market expansion and competition,” said Novo.
The new forecasts also reflected lower expectations for Ozempic in the US diabetes market and Wegovy in some international markets, it added.
Sales in the first six months of the year rose 18 per cent after the effect of currency fluctuations was stripped out, Novo said. Operating profit was up 29 per cent.
The company also announced it was appointing Maziar Mike Doustdar, current executive vice-president of international operations, as chief executive.
Doustdar will succeed Lars Fruergaard Jørgensen in the top job next week and will also become president of the group. Jørgensen was ousted in May after shares in the company fell more than 50 per cent in 12 months.
Doustdar, an Austrian-Iranian national, is the first non-Dane to head the company. His appointment comes after a search that emphasised the commercial nous needed for the US, after what some analysts see as an inferior marketing operation to Eli Lilly’s. Doustdar is a life-long Novo employee who runs every market apart from the US.
Novo’s problems with copycat drugs in the US date back to 2022 shortages of Wegovy and Ozempic, as well as of Lilly’s weight-loss treatment Zepbound. The US Food and Drug Administration responded by allowing other companies to make versions of the medicines.
While the FDA ended that permission this year, Novo has found it hard to stop the supply of these alternative medicines. The company said on Tuesday it was pursuing litigation “to protect patients from copycat . . . drugs”.
“Novo Nordisk market research shows that unsafe and unlawful mass compounding has continued,” it said. “Multiple entities continue to market and sell compounded [drugs] under the false guise of ‘personalisation’.”
Last month, the company ended a partnership with US telehealth group Hims & Hers after Novo alleged it was deceptively marketing copycat versions of Wegovy. Hims & Hers accused Novo of “misleading the public” and said it refused to be “strong-armed by any pharmaceutical company’s anti-competitive demands”.
Credit: Source link
