Novo Nordisk, the Danish pharmaceutical company, has recently garnered attention for its weight management drug Wegovy and diabetes treatment Ozempic. Now, it’s sounded the alarm on its financial condition for the upcoming fiscal year. The retailer now anticipates a more muted pace of same-store profit and sales growth than previously forecast. This is largely attributable to pressures in the U.S. obesity market and the downward trend in Ozempic sales.
As a result, the company has raised its full-year earnings-per-share growth outlook to 10% to 16%. This is a dramatic drop from the previously estimated range of 13% to 21% issued back in May. Likewise, Novo Nordisk now expects 2023 sales growth of 8% to 14%, a retraction from previous guidance. Analysts attribute the cut to a slower-than-expected rollout of Wegovy to U.S. households. They further cite decreased sales of Ozempic ($SEQ=NNYSE) in the booming American diabetes market as helping to fuel the collapse.
Maziar Mike Doustdar, who has been with Novo Nordisk since 1992. He will officially assume the position of Chief Executive Officer on August 7. His selection came after an extensive national search that considered both internal and external candidates. This unexpected decision has generated intense debate among industry insiders and experts. Some analysts believe that the decision to promote an internal candidate may be surprising given the current challenges facing the company.
“We are surprised by the appointment of Mike Doustdar as chief executive with feedback suggesting an external candidate may have been preferred.” – Benjamin Jackson, analyst at Jeffries
Markus Manns, a portfolio manager at Union Investment, has publicly called out Novo Nordisk. He thinks the company’s problems run deeper than just how well Wegovy is doing in the U.S. He argued that the problems run “a lot deeper,” reaching the global market, too. Manns characterized the cuts to Novo Nordisk’s growth outlook as a “shocker,” highlighting the widespread sentiment of unease regarding the company’s future.
Novo Nordisk’s semaglutide injections, the brand name Ozempic, are skyrocketing in popularity for managing type 2 diabetes. Others are using them as powerful weight-loss tools. Though catfishing has an ever-growing market appeal, the company may soon face increasing domestic and foreign competitive pressures that will eat into its market share and profitability.
Despite Novo Nordisk’s success, challenges loom on the horizon. TNC Stakeholders are looking forward to how Doustdar’s stewardship will influence the company’s strategic direction and affect its performance at home and abroad. The company now enters a very dangerous few months. It is looking to recapture that momentum and provide investors confidence that it has strong growth prospects ahead.