Novo Nordisk A/S ( NVO Quick Quote NVO - Free Report) reported first-quarter 2021 earnings of 88 cents per American Depositary Receipt (ADR), beating the Zacks Consensus Estimate of 79 cents. The company reported earnings of 75 cents in the year-ago quarter.
Revenues of $5.4 billion remained flat in Danish kroner and increased 7% at constant exchange rate (“CER”). Revenues also surpassed the Zacks Consensus Estimate of $5.0 billion. Sales were driven by higher Diabetes and Obesity care sales, owing to elevated GLP-1 sales, offset by insulin revenue decline.
Sales were negatively impacted by COVID-19-related stocking that took place in the year-ago quarter, partially offset by inventory changes and shipments timing in 2021.
Shares of Novo Nordisk have increased 6.1% in the year so far compared with the
industry’s rise of 3.3%. All growth rates mentioned below are on a year-over-year basis. Quarter in Detail
Novo Nordisk operates in two segments — Diabetes and Obesity Care, and Biopharmaceuticals.
The Diabetes and Obesity Care segment sales grew 9% at CER. In Diabetes Care, fast-acting insulin (Fiasp and NovoRapid) revenues declined 4% at CER and Human insulin revenues were up 2% at CER. Premix insulin (Ryzodeg and NovoMix) revenues rose 6%. Sales of long-acting insulins (Tresiba, Xultophy and Levemir) were flat. Ozempic had a strong launch and recorded sales of DKK 6.66 billion for the quarter, up 52% at CER.
Obesity Care (Saxenda) sales were up 9% at CER year over year.
Sales in the Biopharm segment were up 1% at CER year over year to DKK 4.97 billion. Sales of rare blood disorder products increased by 2% at CER to DKK 2,678 million, driven by the launch of Esperoct and Refixia, partially offset by declining NovoSeven sales. Sales of haemophilia A products increased by 16% at CER. Haemophilia B products’ sales increased by 18% at CER. Sales of NovoSeven decreased by 2% to DKK 1,980 million.
Sales and distribution costs increased 9% in Danish kroner and 16% at CER year over year. The increase was driven by North America Operations, reflecting the launch of Rybelsus and promotional activities related to Ozempic.
Research and development costs increased 4% in Danish kroner and 7% at CER from the year-ago quarter. The costs were driven by increased clinical study activity and ongoing cardiovascular outcome studies – SOUL and SELECT.
Administrative costs increased 1% in Danish kroner and 3% at CER from the same period in 2020.
Novo Nordisk now expects 6-10% sales growth at CER. The guidance reflects persistent sales growth in International operations. The guidance also reflects robust sales performance of GLP-1 diabetes care products, Ozempic and Rybelsus, as well as growth within Obesity Care. The guidance also reflects intensifying competition in both Diabetes care and Biopharm.
Notably, Novo Nordisk faces stiff competition from
Eli Lilly ( LLY Quick Quote LLY - Free Report) and Sanofi ( SNY Quick Quote SNY - Free Report) in the global insulin market. The company also faces competition from Lilly and AstraZeneca ( AZN Quick Quote AZN - Free Report) in the global GLP-1 market.
Persistent pricing pressure within Diabetes Care, especially in the United States, might also negatively impact sales.
Novo Nordisk beat both revenues and earnings estimates in the first quarter. Ozempic is off to a solid start and the launch of Rybelsus looks impressive. However, adverse impacts of COVID-19 are likely to affect its performance in the future quarters.
Novo Nordisk currently has a Zacks Rank #3 (Hold). You can see
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