Novo Nordisk A/S Q2 FY2025 earnings call

• Purpose and Sustainability: Serving nearly 46 million patients with diabetes and obesity treatments, an increase of over 3.5 million patients compared to H1 2024.
• R&D: Ozempic received a positive EMA opinion for treating peripheral arterial disease in Type-2 diabetes. In obesity, subcutaneous and oral amycretin advanced to Phase III, and REDEFINE 11 Phase IIIb trial for CagriSema was initiated. A collaboration with Septerna was entered for obesity, Type-2 diabetes, and cardiometabolic diseases.
• Commercial Execution: U.S. operations grew 17%, international operations grew 19%. GLP-1 diabetes sales in U.S. grew 9% and international 10%. Obesity care sales in U.S. grew 36% and international 125%. Rare disease sales grew 15%, red blood disorder sales grew 6%. Wegovy in U.S. had 37% growth, and obesity care sales in international operations grew 125% to DKK 13.9 billion, with Wegovy alone at over DKK 12.2 billion.

In the first 6 months of 2025, Novo Nordisk delivered 18% sales growth and 29% operating profit growth. GLP-1 diabetes sales increased 10%, with U.S. operations growing 9% and international operations 10%. Obesity care sales grew 58%, with U.S. operations up 36% and international operations 125%. Rare disease sales increased 15%, driven by U.S. operations (23%) and international operations (10%). Red blood disorder sales grew 6%, driven by increased sales of NovoSeven and Alhemo in the U.S. and higher haemophilia B and Alhemo sales in international operations. Revenue contribution: GLP-1 diabetes sales contributed around 10% to total sales, obesity care sales around 58%, rare disease around 15%, and red blood disorder around 6%.

Novo Nordisk lowered the full-year 2025 outlook. Sales growth is expected to be 8%-14% at constant exchange rates, and operating profit growth is expected to be 10%-16% at constant exchange rates. Free cash flow is now expected to be DKK 35 billion to DKK 45 billion. The lower sales outlook for 2025 is driven by lower growth expectations for the second half of 2025, including Wegovy in the U.S. obesity market, Ozempic in the U.S. GLP-1 diabetes market, and Wegovy in select international markets.

• Unsafe and unlawful mass compounding of GLP-1s in the U.S. is impacting Wegovy penetration. For example, an estimated 1 million patients are on compounded GLP-1s, and Novo Nordisk is working to address this.
• Supply issues in some international markets have negatively impacted sales growth, such as wholesaler inventory movements and timing affecting GLP-1 diabetes sales in Region China.

Q: On Wegovy formulary position with CVS and compounding litigation, how does the CVS conversion impact prescriptions and is Novo initiating litigation against compounders?

A: Dave Moore stated the CVS formulary conversion is going as planned, and while not commenting on specific patient numbers, they are seeing trends in line with expectations. On compounding, Novo Nordisk considers patient safety a priority, and while not commenting directly on litigation, they are taking actions to ensure laws are followed and are in dialogue with the FDA.

Q: About China's destocking, R&D strategy changes, and commercial strategy changes, why was there destocking in China and what changes are planned for R&D and commercial?

A: Mike Doustdar explained that China's lower growth is not due to losing market share but due to inventory adjustments from last year's stockbuilding. For R&D, focus remains on diabetes and obesity. For commercial, emphasis is on execution and efficiency, building on current strategies to drive growth.

Q: Regarding Wegovy TRx dynamics, specifically NovoCare contribution, and Rybelsus's future, how much of Wegovy's recent growth is from CVS vs other factors, and is Rybelsus's focus changing?

A: Dave Moore said Wegovy's growth is a mix of CVS impact and other commercial efforts, with NovoCare Pharmacy being a focus. David S. Moore noted Rybelsus's focus has shifted to prioritize Ozempic and Wegovy in commercial investments.

Q: On IO capacity, oral sema launch, and Rybelsus, how is Novo's capacity positioned for IO growth and when is oral sema expected, and what's Rybelsus's outlook?

A: Karsten Knudsen said Novo's capacity is reflected in current run rates, with Wegovy and IO growth scaling. Oral sema for obesity is expected to launch next year. David S. Moore indicated Rybelsus is expected to have flattish trends as focus shifts to other products.

Q: About Zalfermin, FGF21, pricing, and SURPASS-CVOT, why was Zalfermin development discontinued and what does SURPASS-CVOT mean for semaglutide's CV benefit?

A: Martin Holst Lange explained Zalfermin didn't differentiate meaningfully from semaglutide in trials. Martin Holst Lange and Ludovic Helfgott stated SURPASS-CVOT confirmed semaglutide's unsurpassed 26% cardiovascular risk reduction in the SUSTAIN 6 trial, highlighting its unique CV benefit.

Q: On CapEx and Wegovy approval, what's the outlook for CapEx and when is Wegovy expected to launch in the U.S. post-approval?

A: Karsten Knudsen said CapEx is near peak and expected to gradually decline, with a maintenance level around 5% of sales. Dave Moore stated Novo is ready for Wegovy's potential approval, with launch readiness activities underway near approval.

Q: Regarding guidance and CagriSema, how was the guidance range determined and what's the status of CagriSema's clinical development?

A: Karsten Knudsen explained the guidance range accounts for unforeseen events like gross to net adjustments and market volatility. Martin Holst Lange said CagriSema's clinical equivalent is established, and no new fill/finish capacity is needed for its development.