Novo Nordisk A/S (NYSE:NVO) is witnessing a surge in the number of patients starting on its weight-loss drug, Wegovy, in the U.S. This increase comes despite supply constraints and competition from Eli Lilly & Co. (NYSE:LLY).
What Happened: The Danish pharmaceutical company is now shipping more introductory doses of Wegovy to the U.S., as it grapples with supply constraints and competition from Eli Lilly, reported Bloomberg on Friday.
Despite the challenges, Wegovy sales more than doubled to 9.38 billion kroner ($1.35 billion) in the first quarter. This figure, however, fell short of analysts’ estimates due to pricing pressure. The company’s stock declined, despite a surge in quarterly profit and an increased forecast.
Novo Nordisk is doubling its investment in manufacturing capacity this year to about $6.4 billion. This figure does not include the planned $11 billion acquisition of three factories originally owned by contract manufacturer Catalent Inc. (NYSE:CTLT).
See Also: 3 Trends In Healthcare Guided By AI And The Companies Behind The Innovation
The obesity market is a key battleground for Novo Nordisk and Eli Lilly. The former’s strategy to ramp up production is crucial as it competes with Lilly for dominance in this market. The demand for Wegovy and its sister medicine for diabetes, Ozempic, has led the company to increase its forecast, with sales potentially surging by as much as 27% and operating profit by as much as 30% this year.
However, the cost of these drugs has been a point of contention in the U.S., with prices coming down due to volume, breadth of coverage, and competition. This has led to an investigation by the Senate Committee on Health, Education, Labor, and Pensions. Despite this, about 80% of Wegovy patients in the U.S. with commercial coverage for the drug are paying $25 or less per month.
Why It Matters: The increase in patients starting on Wegovy comes at a time when Novo Nordisk is facing challenges on multiple fronts. The company is currently facing a setback in Denmark, where the healthcare authority has shifted prescription guidelines to favor less expensive drugs for type 2 diabetes patients, impacting the prescription of costlier GLP-1 drugs such as Ozempic.
Moreover, the Federal Trade Commission is challenging pharmaceutical patent listings, including those for diabetes and weight-loss drugs like Novo Nordisk’s Ozempic and Victoza. This initiative is aimed at facilitating the availability of more affordable alternatives to brand-name drugs.
Despite these challenges, Novo Nordisk has been expanding its market reach by introducing Wegovy in Japan, where obesity rates have been rising. The drug’s introduction in Japan marks the first effective obesity medication to be made available in the country in nearly three decades.
Read Next: AI In Healthcare Is Expected To Reach $148 Billion By 2029
Image Via Unsplash
Engineered by Benzinga Neuro, Edited by Kaustubh Bagalkote
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.
