Novo Nordisk, the renowned healthcare company, is set to report its earnings on Thursday, attracting significant attention from investors. Particularly, investors will be closely monitoring the sales performance of Novo’s blockbuster anti-obesity medications, which have captivated the public’s imagination over the past year.
Impressively, Novo’s American depository receipt (ADR) has experienced a remarkable surge of over 40% this year. This surge can be attributed to the excitement surrounding the company’s weight-loss and Type 2 diabetes drugs. As a result, Novo Nordisk’s market value has significantly increased, reaching around $430 billion. Consequently, the healthcare giant now stands as one of the most valuable companies in the global healthcare industry.
It is worth noting that Novo Nordisk’s earnings report arrives amidst a rather challenging period for the pharmaceutical sector. During the past two weeks, investors have shown their skepticism by selling shares of various large drug manufacturers upon their earnings announcements. This has caused notable share-price losses for companies such as Sanofi, Amgen, and others. Interestingly, investors have even offloaded shares of companies reporting positive news, evident in the case of GSK on Wednesday.
However, Novo Nordisk and its competitor Eli Lilly stand as exceptions within the pharmaceutical sector’s recent trend. Both companies have seen their shares soar this year, while the majority of their counterparts have experienced significant declines. This stark contrast becomes evident when comparing Novo and Lilly’s performance to that of the NYSE Arca Pharmaceutical Index (DRG), which is down by 1.1% year-to-date.
Therefore, investors eagerly anticipate Novo Nordisk’s third-quarter earnings announcement on Thursday, as it will provide valuable insight into whether this positive trend will continue or shift course.
Novo Boosts Sales and Profits Estimates
Novo, a leading pharmaceutical company, has given investors a glimpse into its impressive financial performance during the third quarter of 2023. Sales surged by 38% compared to the same period last year, while operating profits experienced a remarkable 47% growth.
Anticipating continued success, Novo has raised its full-year sales estimates for 2023. The company now expects a climb of between 32% and 38% from the previous year, surpassing its initial projections of an increase between 27% and 33%. Additionally, Novo has revised its full-year operating profit estimates to grow between 40% and 46%, up from the original range of 31% to 37%.
Novo attributes its optimistic outlook to the rising popularity of Ozempic, its Type 2 diabetes drug. The introduction of Wegovy, a higher-dose version of Ozempic targeted for weight-loss treatment, has further bolstered sales projections.
Financial analysts on Wall Street predict Novo’s earnings for the third quarter to be around 4.81 Danish krone per share, accompanied by sales totaling 57.8 billion Danish krone ($8.2 billion) based on FactSet data. By comparison, sales in the same quarter last year amounted to 45.6 billion Danish krone or $6 billion.
While Novo’s financials showcase impressive growth, investors are curious about the progress of the company’s efforts to meet the surging demand for Wegovy and Ozempic. Currently, Novo is investing in scaling up production to ensure a steady supply of these drugs.
Novo will release its official financial results on Thursday morning and has scheduled an investor call at 8 a.m. ET to further discuss its performance.
