Novo Nordisk launches 'strong' guidance, warns of supply constraints

Novo Nordisk launches 'strong' guidance, warns of supply constraints
By Reuters
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By Nikolaj Skydsgaard

COPENHAGEN -Danish drug developer Novo Nordisk on Wednesday presented “strong” sales expectations for 2023 and announced heavy investments into its production capacity, but warned of supply constraints on its best-selling drug.

Novo Nordisk, which develops diabetes and obesity drugs, said it expected “periodic supply constraints” this year, partly driven by higher than expected demand for its blockbuster diabetes drug, Ozempic, and manufacturing constraints.

“Supply of Ozempic cannot keep up with demand in some markets,” Novo’s Chief Financial Officer Karsten Munk Knudsen told journalists on Wednesday, but said Ozempic was available in the United States, the firm’s biggest single market.

Shortages of human growth hormone would also cause sales in its rare disease franchise to drop by a “mid-single digit” percentage in 2023, as its Norditropin drug would be out of stock in certain markets, Knudsen said.

Novo however expects both sales and operating profit growth in local currencies in 2023 to be in a range between 13% and 19%, “strong” guidance according to Jyske Bank analyst Henrik Hallengreen Laustsen.

“Hopefully we’ll get a whole year where Wegovy sales are allowed to flourish, so that’s definitely something that pulls up the guidance for 2023,” Laustsen told Reuters.

Sales of the company’s new obesity drug, Wegovy, grew nearly 300% in local currencies last year, despite having faced serious supply issues throughout the year. In December, all doses of Wegovy were made available again to patients in the United States, Novo said.

In response to the strong demand, Novo Nordisk expects to invest around 25 billion Danish crowns ($3.66 billion) in 2023, mainly towards additional ingredient production and fill-finish capacity, more than double the 12.1 billion it spent in 2022.

“We are gradually increasing our supply capacity,” Knudsen said.

Shares in Novo Nordisk traded up 0.50% at 0923 GMT, close to an all-time high reached earlier this month.

It will propose a dividend of 8.15 crowns per share, making the total dividend for 2022 12.4 crowns per share. A new 12-month share repurchase programme of up to 28 billion crowns has been initiated, the company said.

($1 = 6.8341 Danish crowns)

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