Ozempic maker Novo Nordisk posts strong results but competition weighs

An employee walks past a door bearing the logo of Novo Nordisk at the factory in Hilleroed on September 26, 2023.[AFP]

Danish pharmaceutical giant Novo Nordisk posted a sharp rise in second-quarter net profit Wednesday, but rising competition is weighing on sales of its diabetes and obesity treatments Ozempic and Wegovy in the United States.

The group reported a net profit of 26.5 billion kroner ($4.1 billion), a 32 percent increase from the same period last year, while sales increased by 18 percent to 76 billion kroner.

The drug maker lowered its annual earnings outlook last week, causing its share price to continue its nearly year-long slide.

The company had already cut its forecast in May and announced the departure of its chief executive Lars Fruergaard Jorgensen.

"In May we mostly thought the bottom was reached," Mikael Bak, director of the Danish shareholders' association, told AFP.

Bak said "every is a bit surprised" that the situation has deteriorated.

"So now we don't want to see more disappointments, there are reasons to believe the business is healthy, the institution and the products good," he said.

Novo Nordisk announced last week that it was promoting Maziar Mike Doustdar, its vice president for international operations, to succeed Jorgensen.

The popularity of Novo Nordisk's weight-loss treatments had once made it a darling of investors, boosting its share price and at one point making it Europe's most valuable company.

But it now faces growing competition from rival treatments made by US group Eli Lilly in United States.

A rule by the US Food and Drug Administration allowing pharmacies to create so-called "compound" copycat versions of the drug, after high demand led to shortages, has also dented Novo Nordisk's earnings.