Novo Nordisk extends U.S. supply curbs on weight-loss drug Wegovy

By Nikolaj Skydsgaard

COPENHAGEN (Reuters) -Novo Nordisk will continue to restrict U.S. supplies of starter doses of its hugely popular Wegovy weight-loss drug most likely into 2024, it said on Thursday, as the company struggles to keep up with soaring U.S. demand.

The news came as the Danish drugmaker raised its full-year profit and sales forecasts for a second time.

Novo Nordisk, Europe's second most valuable listed company behind LVMH, is riding a wave of sky-high demand for its highly effective diabetes and weight-loss drugs Ozempic and Wegovy, which has sent earnings and shares to record highs.

Wegovy is a weekly injection that can help patients to shed 15% of their weight alongside diet and exercise changes.

But the struggle to satisfy demand means Novo could lose out on market share to a string of competitors working on weight-loss therapies similar to Wegovy, vying for a slice of a market estimated to be worth as much as $100 billion by the end of the decade.

The company said it would extend the limits introduced for Wegovy supplies, having said in May that it would halve supply of starter doses to the U.S. market for several months to ensure supplies for existing patients.

"We've seen that the initiative we took earlier this year, limiting the starter dose, has actually helped manage those dynamics. So we want to extend that in the coming quarters," CEO Lars Fruergaard Jorgensen told journalists.

Jorgensen added in a separate interview with Reuters, that the supply limitations would "most likely" extend into 2024.

Many analysts had expected Novo to raise earnings guidance, given the huge U.S. demand for the weekly injection.

More than 650 million adults worldwide are obese and a further 1.3 billion are overweight, exacerbating conditions such as heart disease and diabetes, the World Health Organization says.

"In my view, it's not a winner-takes-all market, it will grow strongly in the coming years," Sydbank analyst Soren Lontoft Hansen said, adding: "There will be room for new players and new, competitive drugs will contribute to a market expansion."

Having raised its earnings guidance in April, Novo now expects 2023 operating profit growth in local currencies of between 31% and 37% on sales growth of 27-33%. The new outlook is up from previous estimates of 24-30% and 28-34% respectively.

"The growth is driven by increasing demand for our GLP-1-based diabetes and obesity treatments, and we are serving more patients than ever before," Jorgensen said in a statement.

Jyske Bank analyst Henrik Hallengreen Laustsen said second-quarter sales and earnings came in slightly below expectations, while costs were also higher than anticipated by analysts.

"Fortunately, the core products Wegovy and Ozempic beat expectations, but there are a few disappointments here and there, in the Insulin division and Rare Diseases," Laustsen said.

Novo shares were down 1.6% at 1015 GMT.

The company also warned that it expected "continued periodic" supply constraints and drug shortages across a number of products and geographies.

(Reporting by Nikolaj SkydsgaardEditing by Josephine Mason and Mark Potter)