It’s all about Ozempic & Wegovy for Europe’s largest company

Novo Nordisk, the pharma giant that’s become even more giant thanks to its weight loss drugs Ozempic and Wegovy, reported first-quarter earnings yesterday.

Although the company technically raised its revenue forecast for the year, sales of Wegovy, despite doubling from last year, fell short of analysts' predictions, as supply constraints and competition in the space began to hamper demand for the drug. The news weighed on the company’s shares, which are down 6% in the last 48 hours, underscoring how crucial the obesity drug is perceived as being to Novo’s future.

By leading the way in the booming weight loss market, the Danish firm has become Europe's most valuable company, with a market cap bigger than its native country’s GDP. The company's first triumph came with Ozempic, a headline-grabbing semaglutide drug that mimics the effects of the naturally occurring hormone GLP-1, which was initially intended for diabetes treatment. One welcomed side effect of Ozempic turned out to be weight loss, sparking an ever-growing list of celebrity endorsements, and sending Novo's GLP-1 sales up 6x in just 5 years.

Now, nearly 3 years on from Wegovy — Novo Nordisk’s FDA-approved rebranded semaglutide for “chronic weight management” — hitting the market, its obesity specific sales have grown to a sizable 17% of the company's total.

However, competition is intensifying: Eli Lilly launched its own obesity drug, Zepbound, late last year, and many other similar drugs are in late-stage trials. In response, the company has dropped prices for both Wegovy and Ozempic, even in the face of constrained supply — a situation that might typically drive prices higher.