Novo Nordisk, Europe’s largest pharmaceutical company, reported fourth-quarter earnings exceeding analyst expectations, leading to a 6% jump in its stock price at the market opening in Europe. However, despite strong financial results, the company expects slower growth in 2025 due to rising competition in the weight-loss drug market, particularly from US rival Eli Lilly.
Novo Nordisk’s operating profit rose 37% in the fourth quarter to 36.7 billion Danish kroner (€4.92 billion), surpassing estimates of 33.6 billion DKK (€4.5 billion). For the full year 2024, operating profit increased by 25% (26% in constant currency) to 128.3 billion DKK (€17.2 billion). The company’s diabetes and obesity care sales grew by 26%, primarily driven by a 21% increase in GLP-1 diabetes drug sales.
The firm’s blockbuster weight-loss drug Wegovy saw a 107% year-on-year sales surge to 19.87 billion DKK (€2.66 billion) in the fourth quarter, although it slightly missed expectations. The company remains focused on next-generation weight-loss treatments, as the Wegovy patent is set to expire in the early 2030s.
Novo Nordisk is currently developing two new obesity drugs, CagriSema and Amycretin. While CagriSema failed to meet investor expectations, causing a 20% drop in the company’s stock, Amycretin’s promising trial results reassured the market.
Due to unprecedented demand for weight-loss treatments in 2024, supply shortages persisted for much of the year. In response, Novo Holdings, the investment arm of Novo Nordisk, acquired three manufacturing sites from Catalent in December to boost production capacity.
CEO Lars Fruergaard Jørgensen expressed satisfaction with the company’s progress:
“We are pleased with our 26% sales growth in 2024, reflecting the fact that over 45 million people now benefit from our treatments. We successfully acquired three Catalent sites and made progress in our R&D pipeline, particularly in obesity projects such as CagriSema and Amycretin. In 2025, we will continue focusing on commercial execution, R&D advancements, and production expansion.”
Novo Nordisk expects a more modest growth of 16% to 24% in constant currency in 2025, marking the company’s lowest midpoint forecast in three years. The weight-loss drug market is expected to slow down while competition from Eli Lilly intensifies globally.
Eli Lilly’s competing weight-loss treatments, Zepbound and Mounjaro, directly rival Novo Nordisk’s Wegovy and Ozempic. Additionally, Eli Lilly’s latest trial results for retatrutide show an average weight loss of 24.4% over 48 weeks, compared to 22% weight loss over 36 weeks for Novo Nordisk’s Amycretin.
Meanwhile, Novo Nordisk’s rising R&D spending may impact profit margins. Research and development costs grew by 48% in 2024, up from a 35% increase in 2023, largely due to higher employee costs and clinical trial expenses.
As the battle for dominance in the weight-loss drug market heats up, Novo Nordisk remains committed to innovation and expanding its production capabilities to stay ahead of its competitors.
