Wegovy maker Novo Nordisk warns of layoffs as competition grows

Novo Nordisk’s outgoing CEO, Lars Fruergaard Jorgensen, has warned that layoffs astatine the Danish pharmaceutical elephantine could beryllium unavoidable arsenic contention heats up against its blockbuster obesity cause Wegovy amid rising unit from rival Eli Lilly.

Novo Nordisk – which became Europe’s astir invaluable company, worthy $650bn, past twelvemonth connected booming income of Wegovy – is facing a pivotal infinitesimal arsenic the medicine loses marketplace stock and sees income maturation slow, particularly successful the United States.

It has warned of acold slower maturation this year, successful portion owed to compounders who person been allowed to marque copycat drugs based connected the aforesaid ingredients arsenic Wegovy owed to shortages. Novo Nordisk, which according to its website has 77,000 employees, chopped its full-year income and nett forecasts past week, wiping $95bn disconnected its marketplace worth since.

The descent is simply a immense and abrupt turnaround for the steadfast that has been 1 of the world’s hottest concern stories, which led to a accelerated enlargement of manufacturing and income capacity. Now the institution is eyeing imaginable cost-cutting measures.

Layoffs loom

“We astir apt won’t beryllium capable to debar layoffs,” Jorgensen told Danish broadcaster DR. “When you person to set a company, determination are immoderate areas wherever you person to person less people, immoderate [areas] wherever you person to beryllium smaller.”

He added, though, that immoderate determination connected layoffs would beryllium successful the hands of the incoming CEO, institution seasoned Maziar Mike Doustdar, who takes implicit connected Thursday.

On a media call, Jorgensen said the marketplace for copycat versions of Wegovy’s people of drugs – known arsenic GLP-1 receptor agonists – was of “equal size to our business” and compounded versions of Wegovy were sold astatine a “much little terms point”.

In May, Novo Nordisk said it expected galore of the astir 1 cardinal US patients utilizing compounded GLP-1 drugs to power to branded treatments aft a US Food and Drug Administration ban connected compounded copies of Wegovy took effect connected May 22, and it expected compounding to upwind down successful the 3rd quarter.

However, concern main Karsten Munk Knudsen said connected Wednesday that much than 1 cardinal US patients were inactive utilizing compounded GLP-1s and that the company’s lowered outlook has “not assumed a simplification successful compounding” this year.

“The obesity marketplace is volatile,” Knudsen told analysts erstwhile asked nether what circumstances the institution could spot antagonistic maturation successful the past six months of the year. The debased extremity of the firm’s caller full-year guidance scope would beryllium for “unforeseen events”, specified arsenic stronger pricing unit successful the US than forecast, helium said.

The little extremity of the scope would connote income astir 150 cardinal Danish krone ($23bn) successful the 2nd fractional of 2025, compared with 157 cardinal krone ($24.5bn) successful the aforesaid play past year.

Knudsen reiterated that the institution was pursuing aggregate strategies, including lawsuits against compounding pharmacies, to halt unlawful wide compounding.

Jorgensen said the institution was encouraged by the latest US medicine information for Wegovy. While the cause was overtaken earlier this twelvemonth by rival Eli Lilly’s Zepbound successful presumption of US prescriptions, that pb has narrowed successful the past month.

Second-quarter income of Wegovy roseate by 36 percent successful the US and much than quadrupled successful markets extracurricular the US compared to a twelvemonth ago, Novo Nordisk said.

While Wegovy’s US pricing held dependable successful the quarter, the institution expected deeper erosion successful the cardinal US marketplace successful the 2nd half, owed to a greater information of income expected from the direct-to-consumer oregon cash-pay channel, arsenic good arsenic higher rebates and discounts to insurers, Knudsen said.

He said Novo Nordisk was expanding its US direct-to-consumer platform, NovoCare, launched successful March, and whitethorn request to prosecute akin “cash sales” straight to patients, extracurricular of security channels, successful immoderate markets extracurricular the US.

Cost cuts

Novo Nordisk reiterated its full-year net expectations connected Wednesday aft past week’s nett warning.

Jorgensen said the institution was acting to “ensure efficiencies successful our outgo base” arsenic it announced it would terminate 8 probe and improvement projects.

“There seems to beryllium a larger R&D clean-out than usual, but we bash not cognize if this reflects a strategical re-assessment oregon conscionable a coincidence,” Jefferies analysts said successful a note.

Investors person questioned whether the institution tin enactment competitory successful the booming weight-loss cause market. Several equity analysts person chopped their terms targets and recommendations connected the banal since past week.

Shares successful Novo Nordisk plunged 30 percent past week – their worst play show successful implicit 2 decades. The banal has continued to tumble since the marketplace opened successful New York. As of 12pm section clip (16:00 GMT), the pharmaceutical elephantine was down by much than 3.3 percent.