Packing containers of Ozempic and Wegovy made by Novo Nordisk at a pharmacy in London on March 8, 2024.
Hollie Adams | Reuters
Wegovy-maker Novo Nordisk stated Wednesday that it was doubling down on direct-to-consumer gross sales because it contends with copycat compounders and Washington’s calls for for decrease home drug costs.
Chief Monetary Officer Karsten Munk Knudsen stated that the pharma big’s money channel, which lets sufferers buy its blockbuster weight reduction remedy for lower than half its typical worth per 30 days, was key to regaining market share and assembly U.S. coverage wants.
“The market is evolving within the sense that there’s each an insured channel however then there’s a money channel, the place sufferers can entry our merchandise instantly with out intermediaries,” he advised CNBC’s “Squawk Field Europe.”
The corporate stated throughout an earnings name Wednesday that its forthcoming weight problems tablet, due for U.S. approval in late 2025, is also included in its money channel.
“We expect weight problems merchandise actually lend themselves to the money channel. So it is an possibility that we now have and we actually stay up for assembly sufferers wherever they’re by way of their entry wants,” David Moore, government vp of U.S. Operations advised traders.
Shares have been down 5.5% by 2:10 p.m. London time (9:10 a.m. ET).
Knudsen stated an ultimatum delivered final week by President Donald Trump demanding pharma companies lower the value of U.S. prescribed drugs to “most favored nation” (MFN) ranges by Sept. 29, had “resonated” and that Novo “shares the identical goal” of reducing costs.
The U.S. constantly pays probably the most on the earth for a lot of prescribed drugs, due partly to the its extremely advanced and fragmented reimbursement system and the prevalence of intermediaries, referred to as pharmacy profit managers (PBM).
Novo Nordisk’s CFO nonetheless stated that the corporate — and the business at giant — remained in negotiations with the administration on applicable coverage.
“We consider there’s extra discussions available between the business and the president for the laws to come back by means of to search out the appropriate format,” Knudsen added.
Copycat compounders weigh heavy
Novo Nordisk launched its direct-to-consumer on-line pharmacy, NovoCare, in March in a bid to make its weight-loss injection accessible to tens of millions of uninsured sufferers. The platform lowers the money worth to $499 per 30 days in comparison with Wegovy’s listing worth earlier than insurance coverage and different rebates which is sort of $1,350 per 30 days.
In Could, CVS Well being expanded entry to the drug Wegovy for sufferers lined by its pharmacy profit supervisor, Caremark, and later made Wegovy its most well-liked GLP-1 drug for weight problems.
It comes as the corporate — and to a lesser extent rival Zepbound-maker Eli Lilly — have struggled to fend off elevated competitors from cheaper compounded weight reduction medicine. Lily launched its lower-cost LillyDirect service firstly of 2024.
In a shock revenue warning final week, Novo stated that “unsafe and illegal mass compounding” had continued since Could 22, a deadline set by the U.S. Meals and Drug Administration for compounders to stop gross sales following the top of its drug scarcity ruling.
Novo stated weaker second-half U.S. gross sales development forecasts for Wegovy and its Ozempic diabetes remedy had prompted the revision. It now expects annual gross sales development of 8% to 14% at fixed trade charges, together with annual working revenue development of 10% to 16%.
Rajesh Kumar, head of life sciences and healthcare analysis at HSBC, stated Wednesday that Novo had been disproportionately impacted by the rise of compounded copycats versus Lily given the identify recognition round Wegovy.
Novo Nordisk.
“The model recognition for Wegovy is considerably better [than for competitors],” Kumar advised CNBC’s “Squawk Field Europe.” Lilly’s Zepbound drug got here to market within the U.S. round two years after Wegovy.
“Market analysis implies that 75% to 80% of compounded pharmacies are concentrating on Wegovy as a result of that is a model which shoppers establish very simply. So that you’re seeing a disproportionate influence from the compounders.”
Knudsen described compounding because the “largest single issue” impacting Novo’s U.S. market share, however nonetheless added that compounding additionally “expands the market as a result of [it] is an indication of great demand for these merchandise.”
Wegovy gross sales bounce 67%
Wegovy gross sales climbed within the second quarter, rising 67% year-on-year at fixed trade charges to 19.53 billion Danish kroner ($3.03 billion), the corporate stated in its newest earnings report Wednesday. That was barely beneath the 20 billion Danish kroner forecast by analysts in an LSEG ballot.
General gross sales rose 13% year-on-year at fixed trade charges to 76.86 billion Danish kroner within the three months to June, simply forward of the 76.6 billion Danish kroner analysts forecast.
Quarterly web revenue got here in at 26.5 billion Danish kroner, versus 26.6 billion Danish kroner anticipated.
The Danish drug maker reiterated its full-year outlook and stated that it could lower prices and sharpen its industrial focus after the corporate’s share worth took a beating on final week’s announcement, extending extended declines since its June 2024 peak.
“We’re taking measures to sharpen our industrial execution additional, and guarantee efficiencies in our price base whereas persevering with to put money into future development,” outgoing President and CEO Lars Fruergaard Jørgensen stated in a press release accompanying the outcomes.
Incoming CEO Maziar Mike Doustdar, whose appointment stunned markets final week and takes impact Thursday, stated that he was assuming the position with “a way of urgency, a laser deal with excessive efficiency, and a fierce dedication for Novo Nordisk to intention greater than it is ever executed.”
Fruergaard Jørgensen’s shock ouster in Could got here as the corporate has additionally been making an attempt to regain investor confidence following a collection of disappointing trial outcomes for its next-generation weight problems drug candidate, CagriSema.
Meantime, the broader pharmaceutical business is going through the prospect of great White Home tariffs — which President Trump stated Tuesday may run as excessive as 250%.
Knudsen stated Wednesday that he believed the corporate was in a robust place to climate U.S. tariffs, noting that it has a robust and rising U.S. manufacturing presence.
“After we speak about GLP-1s, which is the energetic ingredient in Ozempic and Wegovy, we are literally exporting extra from the U.S. than we’re importing, by way of volumes,” he stated.
“So the commerce steadiness, in the event you can name it that, is definitely in a quite good place and placing Novo Nordisk in, I believe, a greater place than many different pharmaceutical firms.”
