Novo Nordisk, Europe’s largest pharmaceutical company, reported higher-than-expected fourth-quarter earnings, leading to a rise in its stock price. Despite this strong performance, the company anticipates slower growth in 2025 due to increasing competition in the weight-loss drug market, particularly from Eli Lilly.
In the last quarter of 2024, Novo Nordisk’s operating profit increased by 37 percent to 36.7 billion Danish kroner, surpassing forecasts. For the full year, operating profit grew by 25 percent to 128.3 billion kroner, driven by strong sales in diabetes and obesity treatments.
The company’s leading weight-loss drug, Wegovy, saw a 107 percent increase in sales, reaching 19.87 billion kroner in the fourth quarter, though it slightly missed projections. As the patent for the drug is set to expire in the early 2030s, Novo Nordisk is developing new obesity treatments to maintain its market position.
Trial results for two new weight-loss drugs, CagriSema and Amycretin, produced mixed results. CagriSema underperformed expectations, causing a sharp drop in the company’s stock price, while Amycretin showed more promising data, reassuring investors.
Throughout 2024, demand for weight-loss treatments outpaced supply, prompting Novo Nordisk to invest in expanding its manufacturing capabilities. In December, the company’s investment arm acquired three manufacturing facilities from Catalent to address supply constraints and support future growth.
The company’s leadership expressed satisfaction with the strong sales performance and emphasized its continued focus on increasing production capacity, advancing its research pipeline, and strengthening commercial execution.
Novo Nordisk expects growth to slow in 2025, with projections between 16 and 24 percent at constant currency, marking its lowest growth outlook in three years. The weight-loss drug sector is expected to become more competitive as Eli Lilly continues to expand its presence with rival treatments.
Eli Lilly’s weight-loss drugs, Zepbound and Mounjaro, compete directly with Wegovy and Ozempic. Additionally, new trial data showed that Eli Lilly’s retatrutide achieved an average weight reduction of 24.4 percent over 48 weeks, outperforming Novo Nordisk’s Amycretin, which reported 22 percent weight loss over 36 weeks.
Novo Nordisk is also facing rising research and development expenses, which could impact profit margins. In 2024, the company’s R&D costs increased by 48 percent, compared to a 35 percent rise in 2023, as it invested heavily in clinical trials and new drug development.
As competition grows and operational costs rise, Novo Nordisk is focusing on developing new treatments and expanding production to maintain its position in the global weight-loss drug market.