By Maggie Fick

LONDON (Reuters) -Novo Nordisk on Wednesday trimmed its full-year revenue outlook after reporting weaker-than-expected quarterly gross sales of its widespread weight-loss drug Wegovy, stirring worries amongst buyers about stiffening competitors from Eli Lilly (NYSE:).

The outcomes finish a protracted streak of constructive earnings information from the primary mover within the weight problems drug race which has seen its worth surge to greater than $500 billion, making it Europe’s most precious listed firm.

Novo shares, which have soared some 230% since June 2021, fell as a lot as 7.7% in early buying and selling and had been down 3.1% by 0916 GMT, the fourth greatest faller on the broader and close by of their February lows.

Chief Monetary Officer Karsten Munk Knudsen in an interview known as the market response unsurprising, given the market’s sensitivity to Novo’s mega-blockbuster drug Wegovy.

Second-quarter revenue additionally missed expectations, doubtlessly deepening investor worries that Novo’s dominance within the fast-growing weight problems drug market – which some forecast may very well be value about $150 billion by the early 2030s – is in danger because it races to develop capability to satisfy runaway demand.

The tender second-quarter outcomes are “in sharp contrast to the massive sales and earnings beats we have seen last year”, stated Markus Manns, a portfolio supervisor at Novo shareholder Union Funding in Germany.

CEO Lars Fruergaard Jorgensen downplayed considerations over competitors from U.S. rival Lilly in a name with journalists, saying that he didn’t see these dynamics having a huge impact on gross sales within the foreseeable future.

However CFO Knudsen stated Lilly’s latest entrance to the weight problems market had pressured Novo to chop costs of Wegovy, although he stated this was anticipated.

Novo will proceed limiting provides of the bottom or starter dose of Wegovy to the U.S. market to make sure sufferers who begin remedy can proceed, Jorgensen added.

The Danish firm minimize its working revenue development forecast this yr to between 20% and 28% in native currencies from 22% to 30% beforehand.

Working revenue within the quarter rose 8% at fixed change charges to 25.9 billion Danish crowns ($3.8 billion) in contrast with the 27.3 billion crowns forecast by analysts in a LSEG ballot.

Gross sales of Wegovy, Novo’s first-to-market weight-loss drug, rose 53% to 11.66 billion crowns, properly under the 13.54 billion crowns anticipated by analysts, whereas gross sales of Ozempic, a diabetes drug with the identical energetic ingredient, additionally simply missed expectations.

An adjustment of rebates associated to estimates the corporate made on final yr’s gross sales hit web gross sales of Wegovy within the second quarter, CFO Knudsen stated, calling it a “quarterly blip”.

Novo ended a complicated kidney illness trial in June, leading to a 5.7 billion Danish crown impairment loss which it stated impacted working revenue.

ALL EYES ON SUPPLY

However, Novo raised its gross sales development outlook for this yr to between 22% and 28% in native currencies from 19% to 27% beforehand.

Jorgensen stated on the media name that the improve confirmed Novo is comfy in its potential to additional ramp up provide, with out giving particulars.

Analysts from Barclays and Citi each stated that though the second-quarter numbers had been weaker than anticipated, Novo’s statements on boosting Wegovy manufacturing had been reassuring.

Novo is spending billions of {dollars} to carry Wegovy manufacturing to satisfy runaway demand and fend off Lilly, which launched its rival remedy Zepbound within the U.S. final December.

Although Novo and Lilly are actually going head-to-head with weight problems remedies in plenty of markets together with Britain and Germany, essentially the most profitable one by far is the U.S., the place greater than 70% of adults are overweight or chubby.

The bottom of 5 dose strengths of Wegovy continues to be in scarcity, in keeping with the U.S. Meals and Drug Administration web site, which was up to date late on Tuesday to point out two extra dose strengths had been now accessible.

On Friday, the FDA up to date its web site to say Lilly’s Zepbound was accessible, nevertheless it didn’t take away the drug from its scarcity record. It stated in an announcement it was working with Lilly to substantiate provides had been secure.

Lilly will launch quarterly numbers on Thursday.

Novo stated it had withdrawn its submission to U.S. and European regulators for approval of Wegovy to deal with coronary heart failure and kidney illness, and plans to resubmit with extra knowledge in the beginning of 2025.

($1 = 6.8397 Danish crowns)