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Novo Nordisk (NVO) Q3 Earnings and Sales Beat, 2023 View Up
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Novo Nordisk A/S (NVO - Free Report) reported third-quarter 2023 earnings of 73 cents per American Depositary Receipt (ADR), which surpassed the Zacks Consensus Estimate of 69 cents. The company had reported earnings of 43 cents per ADR in the year-ago quarter.
Revenues of $8.57 billion increased 29% in Danish kroner (DKK) and were up 38% at constant exchange rate (CER) in the reported quarter. Total revenues also beat the Zacks Consensus Estimate of $8.03 billion. The year-over-year increase in revenues was driven by higher Diabetes and Obesity care sales as GLP-1 sales increased year over year, partially offset by wholesaler destocking in the United States.
Shares of Novo Nordisk have rallied 44.3% year to date compared with the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and at CER.
Quarter in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care and Rare disease.
The Diabetes and Obesity Care segment’s sales reported DKK 54.8 billion in third-quarter 2023, which represents growth of 45%. In Diabetes Care, fast-acting insulin, Fiasp’s revenues were up 25%. NovoRapid revenues were down 8%. Human insulin revenues were down 13%. Premix insulin (Ryzodeg and NovoMix) revenues decreased by 8%. Also, sales of long-acting insulins (Tresiba, Xultophy and Levemir) were flat in the reported quarter.
Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 23.9 billion for the quarter, up 56%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 4.5 billion for the quarter, up 59%. However, Victoza sales of DKK 2.23 billion declined 21% during the reported quarter.
Obesity Care (Saxenda and Wegovy) sales were up 200% year over year. Wegovy sales skyrocketed to DKK 9.65 billion during the quarter, as a second contract manufacturer for Wegovy initiated production in April 2023to meet the increasing demand for the drug.
Sales in the Rare disease segment were down 20% to DKK 3.9 billion in the third quarter of 2023. Sales of rare blood disorder products were DKK 2.96 billion, up 9%. Sales of hemophilia A products increased by 13%. Hemophilia B products’ sales were also up 58%. Sales of NovoSeven were up 4% to DKK 2.08 billion.
Sales and distribution costs climbed 12% in DKK and increased 19% at CER year over year in the reported quarter. This increase was due to promotional activities related to Ozempic and Rybelsus as well as Obesity care market development activities.
Research and development costs were up 44% in DKK and increased 49% at CER from the year-ago quarter’s figures. Higher costs were driven by clinical activity for late-stage studies and increased research activities.
Administrative costs increased 8% in DKK and were up 12% at CER from the year-ago quarter’s figures.
2023 Outlook Raised
For 2023, the company now expects sales to grow by 32-38%, up from the earlier estimate of 27-33% at CER. Operating profit growth is now estimated at 40-46%, up from the earlier forecast of 31-37% at CER.
The increase in guidance primarily reflects higher full-year expectations for GLP-1 diabetes products in both North America and internationally, primarily driven by the volume growth of GLP-1-based diabetes products.
Novo Nordisk has high expectations from this segment, especially from Ozempic in the U.S. market and Wegovy in the obesity care market, post its relaunch. However, the company remains concerned about Wegovy’s limited roll-out in international markets and continues to expect periodic supply constraints.
Our Take
Novo Nordisk’s earnings and revenues beat estimates in the third quarter of 2023 on the back of higher Diabetes and Obesity care sales. Ozempic and Rybelsus have experienced great traction in the market since launch and are expected to drive growth in the upcoming quarters as well. Wegovy and Saxenda, too, have witnessed strong uptake so far, contributing to the top line.
NVO continues to expand its supply capacity for Wegovy, post its relaunch in the United States as well as in other geographies. The increasing demand trend for the drug is encouraging and expected to fuel higher revenue incomes in the upcoming quarters.
Novo Nordisk currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth mentioning are Dynavax Technologies (DVAX - Free Report) , Apellis Pharmaceuticals (APLS - Free Report) and Adicet Bio, Inc. (ACET - Free Report) . While DVAX sports a Zacks Rank #1 (Strong Buy), APLS and ACET carry a Zacks Rank #2 each at present.
In the past 30 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has narrowed from 23 cents to 22 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 8 cents. Year to date, shares of DVAX have gained 32.5%.
DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.
In the past 30 days, the Zacks Consensus Estimate for Apellis’ 2023 loss per share has narrowed from $4.89 to $4.32. During the same time frame, the estimate for Apellis’ 2024 loss per share has narrowed from $2.77 to $2.15. Year to date, shares of APLS have lost 3.5%.
APLS beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average earnings surprise of 1.36%.
In the past 30 days, the estimate for Adicet Bio’s 2023 loss per share has remained constant at $2.93. During the same period, the estimate for Adicet’s 2024 loss per share has remained constant at $2.40. Year to date, shares of ACET have fallen 85.5%.
ACET’s earnings beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative surprise of 7.70%.
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Novo Nordisk (NVO) Q3 Earnings and Sales Beat, 2023 View Up
Novo Nordisk A/S (NVO - Free Report) reported third-quarter 2023 earnings of 73 cents per American Depositary Receipt (ADR), which surpassed the Zacks Consensus Estimate of 69 cents. The company had reported earnings of 43 cents per ADR in the year-ago quarter.
Revenues of $8.57 billion increased 29% in Danish kroner (DKK) and were up 38% at constant exchange rate (CER) in the reported quarter. Total revenues also beat the Zacks Consensus Estimate of $8.03 billion. The year-over-year increase in revenues was driven by higher Diabetes and Obesity care sales as GLP-1 sales increased year over year, partially offset by wholesaler destocking in the United States.
Shares of Novo Nordisk have rallied 44.3% year to date compared with the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and at CER.
Quarter in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care and Rare disease.
The Diabetes and Obesity Care segment’s sales reported DKK 54.8 billion in third-quarter 2023, which represents growth of 45%. In Diabetes Care, fast-acting insulin, Fiasp’s revenues were up 25%. NovoRapid revenues were down 8%. Human insulin revenues were down 13%. Premix insulin (Ryzodeg and NovoMix) revenues decreased by 8%. Also, sales of long-acting insulins (Tresiba, Xultophy and Levemir) were flat in the reported quarter.
Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 23.9 billion for the quarter, up 56%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 4.5 billion for the quarter, up 59%. However, Victoza sales of DKK 2.23 billion declined 21% during the reported quarter.
Obesity Care (Saxenda and Wegovy) sales were up 200% year over year. Wegovy sales skyrocketed to DKK 9.65 billion during the quarter, as a second contract manufacturer for Wegovy initiated production in April 2023to meet the increasing demand for the drug.
Sales in the Rare disease segment were down 20% to DKK 3.9 billion in the third quarter of 2023. Sales of rare blood disorder products were DKK 2.96 billion, up 9%. Sales of hemophilia A products increased by 13%. Hemophilia B products’ sales were also up 58%. Sales of NovoSeven were up 4% to DKK 2.08 billion.
Sales and distribution costs climbed 12% in DKK and increased 19% at CER year over year in the reported quarter. This increase was due to promotional activities related to Ozempic and Rybelsus as well as Obesity care market development activities.
Research and development costs were up 44% in DKK and increased 49% at CER from the year-ago quarter’s figures. Higher costs were driven by clinical activity for late-stage studies and increased research activities.
Administrative costs increased 8% in DKK and were up 12% at CER from the year-ago quarter’s figures.
2023 Outlook Raised
For 2023, the company now expects sales to grow by 32-38%, up from the earlier estimate of 27-33% at CER. Operating profit growth is now estimated at 40-46%, up from the earlier forecast of 31-37% at CER.
The increase in guidance primarily reflects higher full-year expectations for GLP-1 diabetes products in both North America and internationally, primarily driven by the volume growth of GLP-1-based diabetes products.
Novo Nordisk has high expectations from this segment, especially from Ozempic in the U.S. market and Wegovy in the obesity care market, post its relaunch. However, the company remains concerned about Wegovy’s limited roll-out in international markets and continues to expect periodic supply constraints.
Our Take
Novo Nordisk’s earnings and revenues beat estimates in the third quarter of 2023 on the back of higher Diabetes and Obesity care sales. Ozempic and Rybelsus have experienced great traction in the market since launch and are expected to drive growth in the upcoming quarters as well. Wegovy and Saxenda, too, have witnessed strong uptake so far, contributing to the top line.
NVO continues to expand its supply capacity for Wegovy, post its relaunch in the United States as well as in other geographies. The increasing demand trend for the drug is encouraging and expected to fuel higher revenue incomes in the upcoming quarters.
Novo Nordisk A/S Price and Consensus
Novo Nordisk A/S price-consensus-chart | Novo Nordisk A/S Quote
Zacks Rank & Other Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth mentioning are Dynavax Technologies (DVAX - Free Report) , Apellis Pharmaceuticals (APLS - Free Report) and Adicet Bio, Inc. (ACET - Free Report) . While DVAX sports a Zacks Rank #1 (Strong Buy), APLS and ACET carry a Zacks Rank #2 each at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has narrowed from 23 cents to 22 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 8 cents. Year to date, shares of DVAX have gained 32.5%.
DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.
In the past 30 days, the Zacks Consensus Estimate for Apellis’ 2023 loss per share has narrowed from $4.89 to $4.32. During the same time frame, the estimate for Apellis’ 2024 loss per share has narrowed from $2.77 to $2.15. Year to date, shares of APLS have lost 3.5%.
APLS beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average earnings surprise of 1.36%.
In the past 30 days, the estimate for Adicet Bio’s 2023 loss per share has remained constant at $2.93. During the same period, the estimate for Adicet’s 2024 loss per share has remained constant at $2.40. Year to date, shares of ACET have fallen 85.5%.
ACET’s earnings beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative surprise of 7.70%.