Novo Nordisk Earnings: Compounders Pressured Q1 Wegovy Sales

We expect disappointing results in the first quarter will be balanced by higher-than-anticipated growth in the second half of the year.

Karen Andersen, CFA 8 May, 2025 | 8:54AM
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Editor's Note: This analysis was originally published as a stock note by Morningstar Equity Research.

Key Morningstar Metrics for Novo Nordisk


What We Thought of Novo Nordisk’s Earnings

Novo Nordisk NOVO B reported constant currency sales growth of 18% in the first quarter and lowered the midpoint of its 2025 constant currency sales growth guidance from 20% to 17%. As it reports in Danish kroner, management now sees foreign exchange fluctuations as a headwind in 2025.

Why it matters: The market has been closely watching Novo’s ability to maintain solid double-digit GLP-1 growth despite both branded competition (Eli Lilly) and unbranded, compounded versions of its products in the United States.

• First-quarter growth was below our expectations, mostly due to disappointing sales of the obesity drug Wegovy in the face of unbranded competition. However, the grace period for large-scale compounding ends May 22, and we expect this competition to fade in the second half.

• Novo aims to address the drop in compounded supply by improving access to its products for self-pay patients (with its NovoCare website and collaborations with telehealth firms) and insured patients (Wegovy will be the exclusive choice for the CVS national formulary starting July 1).

The bottom line: We’re maintaining our $89 fair value estimate for wide-moat Novo, as we expect disappointing results in the first quarter will be balanced by higher-than-anticipated growth in the second half. Shares look undervalued.

• While exposure to potential pharma-specific tariffs remains a risk, we think Novo’s expansion of US manufacturing facilities—as well as the uncertain duration of tariffs—will mean only near-term pressure on margins, which is unlikely to sway our valuation.

Long view: Oral GLP-1 medications for obesity will be the next wave of innovation, and we think Novo is in a solid position, with the launch of oral semaglutide in obesity likely in 2026.

• While Lilly’s orforglipron is likely cheaper to manufacture and could more rapidly reach global markets, the drug has much more limited long-term safety data and could be roughly a year behind Novo’s launch in the US.


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Karen Andersen, CFA  Karen Andersen, CFA, is a senior stock analyst with Morningstar.

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