Novo Nordisk A/S NVO reported third-quarter 2022 earnings of 86 cents per American Depositary Receipt, beating the Zacks Consensus Estimate of 84 cents. The company had reported earnings of 84 cents in the year-ago quarter.
Revenues of $6.17 billion increased 28% in Danish kroner and were up 15% at constant exchange rate (“CER”) in the reported quarter. Revenues surpassed the Zacks Consensus Estimate of $6.09 billion. Sales were driven by higher Diabetes and Obesity care sales as GLP-1 sales increased.
Shares of Novo Nordisk have lost 5% so far this year against the industry’s increase of 2.6%.
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All growth rates mentioned below are on a year-over-year basis.
Quarter in Detail
Novo Nordisk operates under two segments: Diabetes and Obesity Care, and the Rare disease segment.
The Diabetes and Obesity Care segment’s sales grew 17% at CER. In Diabetes Care, fast-acting insulin, Fiasp’s revenues rose 9% at CER. NovoRapid revenues were down 13% at CER. Human insulin revenues were also down 22% at CER. Premix insulin (Ryzodeg and NovoMix) revenues declined 13% at CER. Sales of long-acting insulins (Tresiba, Xultophy and Levemir) also declined 18% at CER.
Ozempic, which has witnessed a strong launch and a solid uptake so far, recorded sales of DKK 16.39 billion for the quarter, up 63% at CER. Rybelsus too witnessed a strong uptake and recorded sales of DKK 3.01 billion for the quarter, up 101% at CER.
Obesity Care (Saxenda and Wegovy) sales were up 62% at CER year over year.
Per the company, the contract manufacturer filling syringes for Wegovy has reinitiated commercial production, and Novo Nordisk expects to make all Wegovy dose strengths available in the United States by the end of 2022.
Sales in the Rare disease segment were up 4% at CER year over year to DKK 5,108 million. Sales of rare blood disorder products were DKK 2,885 million, up 13% at CER. Sales of hemophilia A products increased 18% at CER. Hemophilia B products’ sales were also up 13% at CER. Sales of NovoSeven were up 13% at CER to DKK 2,108 million.
Sales and distribution costs climbed 26% in Danish kroner and increased 14% at CER year over year. This increase was due to International Operations and North America Operations, owing to promotional activities related to Ozempic and Rybelsus as well as Obesity care market development activities.
Research and development costs were up 32% in Danish kroner and increased 25% at CER from the year-ago quarter. Higher costs were driven by clinical activity for late-stage studies.
Administrative costs increased 13% in Danish kroner and were up 8% at CER from the year-ago quarter.
Novo Nordisk now expects 14-17% sales growth at CER, which was previously expected to be in the range of 12-16%. The guidance indicates steady sales growth in North America and International Operations, primarily driven by Diabetes and Obesity care. The guidance also reflects the expectation of meeting the demand for Wegovy in the United States by 2022-end. This apart, the outlook implies intensifying competition in both Diabetes care and Rare disease units.
Persistent pricing pressure within Diabetes Care, especially in the United States, might also negatively impact sales.
Novo Nordisk's earnings and revenues beat estimates in the third quarter of 2022. Ozempic is off to a solid start and the launch of Rybelsus looks encouraging. Both medicines continue to drive growth, witnessing solid uptake. Saxenda, too, has witnessed strong uptake so far. The approval for Wegovy is also likely to boost sales of the drug in the days ahead.
Novo Nordisk AS Price, Consensus and EPS Surprise
Novo Nordisk AS price-consensus-eps-surprise-chart | Novo Nordisk AS Quote
Zacks Rank & Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the biotech sector are Akero Therapeutics, Inc. AKRO, Arcus Biosciences, Inc. RCUS and Atea Pharmaceuticals, Inc. AVIR, all sporting a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Loss per share estimates for Akero Therapeutics narrowed 6.9% for 2022 and 4.8% for 2023 in the past 60 days.
Earnings of Akero Therapeutics surpassed estimates in three of the trailing four quarters and missed on the other occasion. AKRO delivered an earnings surprise of 7.66% on average.
Loss per share estimates for Arcus Biosciences narrowed 4.6% for 2022 and 3.9% for 2023 in the past 60 days.
Earnings of Arcus Biosciences surpassed estimates in two of the trailing four quarters, met once and missed on the other occasion. RCUS delivered an earnings surprise of 53.61% on average.
Loss per share estimates for Atea Pharmaceuticals narrowed 10.9% for 2022 and 9.5% for 2023 in the past 60 days.
Earnings of Atea Pharmaceuticals surpassed estimates in three of the trailing four quarters and missed on the other occasion. AVIR delivered a negative earnings surprise of 58.74% on average.
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