Novo Nordisk (NYSE:NVO) reported a robust first quarter with a 24% increase in sales at constant exchange rates (CER), reaching DKK 65.35 billion. The company's operating profit also saw a significant rise, jumping by 30% at CER to DKK 31.8 billion. Despite these strong results, shares of the pharmaceutical giant fell by 2.83%.
The first quarter's performance was marked by a notable 34% sales increase in North America Operations, with a 35% increase at CER. This growth was largely attributed to adjustments in gross-to-net sales from previous years. International Operations also saw an 11% rise at CER. Within the Diabetes and Obesity care segment, sales surged by 27% at CER, primarily due to a 32% increase in GLP-1 diabetes sales and a significant 42% jump in Obesity care.
Comparatively, the company's rare disease sales saw a slight decline of 3% at CER. Novo Nordisk's advancements in the first quarter included the successful completion of the FLOW kidney outcomes trial with semaglutide 1.0 mg and the US approval of Wegovy® for cardiovascular risk reduction in overweight or obese individuals with established cardiovascular disease. Additionally, Awiqli®, a once-weekly insulin icodec, was recommended for EU approval.
Looking ahead, Novo Nordisk has updated its 2024 outlook, now anticipating sales growth between 19-27% and operating profit growth of 22-30% at CER. These projections are expected to align with growth reported in Danish kroner for both sales and operating profit.
Lars Fruergaard Jørgensen, president and CEO of Novo Nordisk, expressed satisfaction with the first quarter's sales growth, attributing it to the increased demand for the company's GLP-1-based diabetes and obesity treatments. "More patients benefit from our innovative treatments, and the agreement to acquire the three Catalent manufacturing sites will enable us to serve significantly more people living with diabetes and obesity in the future," said Jørgensen.
Despite the positive outlook and strong quarterly performance, the stock experienced a downturn, which may reflect market concerns over the sustainability of the demand for Novo Nordisk's obesity drug or other external factors not directly related to the company's financials.
Following the report, analysts at BofA said the "one-off" first-quarter sales beat drove the company's guidance upgrade.
Analysts at Jefferies stated: "1Q focus drugs Wegovy & Rybelsus miss but Ozempic ahead as Sales beat by 2%, but with 4p.p. benefit from US rebate adjustments, for an underlying miss."
The firm felt that shares would tick higher "given some fear into the results, but may then fade."
Analysts at UBS wrote: "Stronger sales was driven by performance of Ozempic and long-acting insulins in the US, with Novo noting positive gross-to-net sales adjustments benefiting the quarter. We view this as more a low quality beat given we know the performance of US prescription volumes."
Analysts at BMO Capital said: "1Q24 print top-line beat (+3% vs. consensus) was largely driven by GLP-1 and insulin products. Both Ozempic (+4%) and Victoza (+7%) added meaningfully to Novo's diabetes revenue while Rybelsus missed significantly (-13%). This outperformance is aligned with our expectations for the quarter based on scripts."