Novo Nordisk posts disappointing earnings as fierce Ozempic competition hits hard

Novo Nordisk’s second-quarter earnings announced on Wednesday reveal further erosion of the Danish company’s one time leadership in weight loss drugs, with fierce competition from Eli Lilly and low-cost compounders causing revenues to come in slightly below Wall Street expectations.

The company’s second quarter revenues rose 18%, the smallest gain since 2021, with growth in its GLP-1 drugs Wegovy and Ozempic lagging expectations due to rival compounders who make copycat Wegovy drugs at a lower price. In a morning media call, outgoing CEO Lars Fruergaard Jorgensen said the compounder business is now "equal size to our business."

Last week the company reduced its full-year sales and profit outlook to 8% to 15% from 13% to 21%, blaming the change on compounder competition. The downgrade took the stock market by surprise and wiped $95 billion off Novo's market value. Just a year ago Novo Nordisk was the most valuable European company — now it sits in 11th place.

The company’s second quarter revenues were DKK 76.86 billion, approximately $11.92 billion, compared to $11.97 billion expected by analysts. It also reported earnings per share of $5.96, compared to estimates of $6.06 per share.

Novo reiterated its expectations for lower U.S. sales of Wegovy and Ozempic and confirmed its pessimistic outlook, saying sales growth is now expected to be 8-14% and operating profit growth is now expected to be 10-16%.

 “The lowered sales outlook for 2025 is driven by lower growth expectations for the second half of 2025, reflecting the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition,” the company said. Novo said it will continue to roll out Wegovy to more markets around the world.

The company narrowed the gap in the U.S. between market leader Eli Lilly, maker of Zepbound and Mounjaro, during the second quarter, with sales of Wegovy rising by 36% over the prior year in the U.S and more than quadrupling in markets outside the U.S.

However, the company said that more than one million U.S. patients continue to use compounded GLP-1s. Novo had expected that U.S. patients using compounds would switch back to its branded drugs after the U.S. Food and Drug Administration banned compounded copies of Wegovy as of May 22.

Today marks the final day of Jorgenson’s tenure as CEO. In a shakeup announced last month, the company announced that Maziar Mike Doustdar, currently executive vice president, international operations, will take over as CEO on August 7. Doustdar will be closely watched by investors as he takes on the company’s cost cutting plans while trying to expand its market.