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Investing.com -- Novo Nordisk (CSE:NOVOb)saw its stock rise over 3% on Wednesday following the release of its first-quarter results for 2025, which, despite a 19% increase in sales, led to a downward revision in the company’s full-year guidance.
The pharmaceutical giant reported a solid 18% increase in first-quarter sales (DKK 78.1 billion), though it acknowledged slower-than-expected growth in the U.S. GLP-1 market, which led to the reduction in its 2025 forecast.
While the company now expects sales to grow between 13% and 21% at constant exchange rates, and operating profit to rise by 16% to 24%, this marks a cut from previous expectations of 16%-24% sales growth and 19%-27% operating profit growth.
The quarterly results showed a strong performance in diabetes and obesity care, with operating profit up 22% to DKK 38.8 billion (20% at CER), driven by sales of its flagship GLP-1 drugs.
However, U.S. sales were impacted by factors including destocking of Wegovy and competition from compounded GLP-1 treatments. Analysts have pointed to these factors as the primary cause for the revision to the company’s guidance.
BofA Securities noted that the revision in guidance was in line with their expectations, although the impact from foreign exchange (FX) was worse than anticipated.
The brokerage observed that while Novo Nordisk had a solid first quarter, the FX shift was a significant factor in the reduced outlook, leading them to lower their 2025 sales growth forecast to 14%, down from their original range of 16%-24%.
BofA also pointed to the ongoing challenges presented by compounded GLP-1 treatments, which could further impact U.S. market dynamics in the coming months.
Morgan Stanley (NYSE:MS) shared similar concerns, particularly noting the 7% miss on Wegovy sales in Q1, which they attributed to U.S. destocking and growing competition from compounded versions of GLP-1 treatments.
The brokerage lowered its sales and EBIT expectations for 2025 by around 6%, mainly due to the negative FX impact.
While Morgan Stanley sees the second half of 2025 as potentially stronger, driven by better access and commercial execution, they cautioned that the guidance cut implies a more difficult road ahead to achieve the higher end of the forecast, particularly as they anticipate continued headwinds from compounded treatments.
Barclays (LON:BARC) echoed these views, noting that the performance of Ozempic in Q1 was better than expected, helping to offset some of the underperformance in Wegovy.
While they acknowledged that the overall results were largely in line with consensus, the guidance cut, driven by the compounded treatment issue, was slightly more significant than anticipated.
Barclays lowered its sales growth forecast to 13%-21%, from 16%-24%, and pointed to the challenges in the U.S. obesity market as the key driver of the reduction.
They also flagged the importance of the second half of the year for Novo’s growth trajectory, with the success of its commercial strategies and efforts to expand access being pivotal.
Jefferies noted that the company’s sales were generally in line with expectations, with the key drugs like Ozempic beating estimates and Wegovy falling short.
They attributed the shortfall in Wegovy sales to both destocking and the rising competition from compounded GLP-1 treatments, with some analysts estimating that up to 1 million patients in the U.S. are now using compounded versions.
Jefferies adjusted their outlook slightly more than expected, with a 3% cut to both sales and profit growth forecasts.
They also suggested that the FX impact could lead to further downgrades, though the company’s focus on improving access through collaborations with telehealth companies and CVS could help mitigate some of the pressures in the second half of 2025.