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 large’s money channel, which lets sufferers buy its blockbuster weight reduction therapy 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 straight with out intermediaries,” he instructed CNBC’s “Squawk Field Europe.”
Knudsen stated an ultimatum delivered final week by President Donald Trump demanding pharma companies minimize the value of U.S. pharmaceuticals to “most favored nation” (MFN) ranges by Sept. 29, had “resonated” and that Novo “shares the identical goal” of reducing costs.
Shares have been down 2% by 11:50 a.m. London time (6:50 a.m. ET).
The U.S. constantly pays probably the most on the earth for a lot of pharmaceuticals, due partially to the its extremely complicated and fragmented reimbursement system and the prevalence of intermediaries, often known as pharmacy profit managers (PBM).
Novo Nordisk’s CFO however stated that the corporate — and the trade at giant — remained in negotiations with the administration on acceptable coverage.
“We consider there’s extra discussions available between the trade and the president for the laws to come back via to seek out the fitting 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 obtainable to thousands and thousands of uninsured sufferers. The platform lowers the money worth to $499 per 30 days in comparison with Wegovy’s checklist worth earlier than insurance coverage and different rebates which is nearly $1,350 per 30 days.
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 initially of 2024.
In a shock revenue warning final week, Novo stated that “unsafe and illegal mass compounding” had continued since Might 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 progress forecasts for Wegovy and its Ozempic diabetes therapy had prompted the revision. It now expects annual gross sales progress of 8% to 14% at fixed trade charges, together with annual working revenue progress 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.
“The model recognition for Wegovy is considerably larger [than for competitors],” Kumar instructed 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 focusing on Wegovy as a result of that is a model which shoppers determine very simply. So that you’re seeing a disproportionate affect from the compounders.”
Knudsen described compounding because the “largest single issue” impacting Novo’s U.S. market share, however however added that compounding additionally “expands the market as a result of [it] is an indication of great demand for these merchandise.”
Wegovy gross sales leap 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 under the 20 billion Danish kroner forecast by analysts in an LSEG ballot.
Total 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 might minimize 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.
Novo Nordisk.
“We’re taking measures to sharpen our industrial execution additional, and guarantee efficiencies in our price base whereas persevering with to spend money on future progress,” outgoing President and CEO Lars Fruergaard Jørgensen stated in an announcement 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 give attention to excessive efficiency, and a fierce dedication for Novo Nordisk to intention increased than it is ever completed.”
Fruergaard Jørgensen’s shock ouster in Might got here as the corporate has additionally been making an attempt to regain investor confidence following a sequence of disappointing trial outcomes for its next-generation weight problems drug candidate, CagriSema.
Meantime, the broader pharmaceutical trade is dealing with the prospect of great White Home tariffs — which President Trump stated Tuesday might 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.
“Once 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, when it comes to volumes,” he stated.
“So the commerce stability, should you can name it that, is definitely in a relatively good place and placing Novo Nordisk in, I feel, a greater place than many different pharmaceutical corporations.”
