Big Danish drugmaker Novo Nordisk (NVO 3.97%) reported its third-quarter results on Wednesday, Nov. 5. Although sales and earnings grew year over year, the company downgraded its full-year outlook for the fourth time.
Novo Nordisk now expects full-year 2025 sales growth of between 8% and 11% at constant exchange rates. It looks for operating profits to grow between 4% and 7% on a constant-currency basis. Previously, the pharmaceutical giant projected sales growth in the range of 8% to 14%, with operating profit growth of 10% to 16%.
Is something rotten in Denmark? Here's what investors need to know.
Image source: Novo Nordisk.
Why Novo Nordisk lowered its guidance again
Novo Nordisk's full-year guidance changed again, but the underlying reasons why largely remained the same. The drugmaker expects lower growth for its GLP-1 diabetes and obesity products -- Ozempic, Rybelsus, and Wegovy.
One big problem for Novo Nordisk is the compounding of cheaper GLP-1 drugs that haven't been approved by the U.S. Food and Drug Administration (FDA). David Moore, the company's executive vice president for U.S. operations, said in the Q3 earnings call that compounding is on the rise, adding, "Multiple entities continue to market and sell compounded GLP-1s, and it is now estimated to be well above 1 million patients in the U.S. that are currently on compounded GLP-1."
Another major issue is increased competition. Novo Nordisk's GLP-1 products have lost 9% of their global market share over the last 12 months. Eli Lilly has made significant inroads with its rival drugs, Mounjaro and Zepbound.
Novo Nordisk's GLP-1 woes weren't the only factor behind its reduced operating profit guidance, though. The company will also incur additional costs related to the pending acquisitions of Akero Therapeutics and Omeros.
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Key Data Points
What's next for the drugmaker?
New CEO Maziar "Mike" Doustdar said in the Q3 call that Novo Nordisk is "sharpening our focus." The company has discontinued several pipeline programs and is prioritizing the core areas of diabetes and obesity. As part of this transformation, Novo Nordisk plans to reduce around 9,000 positions.
The drugmaker hopes to win FDA approval of a pill version of Wegovy by the end of 2025. Management thinks this oral obesity medication should expand Novo Nordisk's market.
Novo Nordisk has also made an offer to acquire Metsera for up to $10 billion. This deal could add Metsera's promising GLP-1 clinical programs to Novo's pipeline. However, the transaction is likely to face regulatory challenges, especially with Pfizer's rival bid to buy Metsera.
In addition, the Trump administration just announced a deal with Novo Nordisk and Lilly to expand coverage of their obesity drugs to Medicare patients beginning in 2026. Although the prices of the GLP-1 medications will be reduced, this agreement will expand Novo Nordisk's market opportunity.
