NVO Q4 Earnings Beat Estimates, GLP-1 Drugs Boost Sales, Stock Up

Novo Nordisk A/S NVO reported fourth-quarter 2024 earnings of 91 cents per American Depositary Receipt (ADR), which beat the Zacks Consensus Estimate of 83 cents. The company had reported earnings of 71 cents per ADR in the year-ago quarter.See the Zacks Earnings Calendar to stay ahead of market-making news.Revenues of $12.3 billion increased 30% in the Danish kroner (DKK) and at the constant exchange rate (CER) in the reported quarter. Total revenues surpassed the Zacks Consensus Estimate of $11.3 billion. The year-over-year increase in revenues was driven by higher Diabetes and Obesity Care sales as GLP-1 product sales increased year over year, as well as greater insulin and Rare disease sales.NVO stock price is gaining during the pre-market hours today as investors are impressed by better-than-expected fourth-quarter results.All growth rates mentioned below are on a year-over-year basis and at CER.NVO’s Q4 Results in DetailNovo Nordisk operates under two segments: Diabetes and Obesity Care, and Rare disease.The Diabetes and Obesity Care segment reported sales of DKK 80 billion in the quarter under discussion, which grew 31%. In Diabetes Care, fast-acting insulin Fiasp’s revenues were down 45%. NovoRapid revenues increased 62% and Human insulin revenues increased 11%. Premix insulin (Ryzodeg and NovoMix) revenues grew 33% year over year. Sales of long-acting insulins (Tresiba, Xultophy, Levemir and Awiqli) jumped 40% in the fourth quarter.Ozempic, which has witnessed a strong launch and solid uptake so far, recorded sales of DKK 33.9 billion for the quarter, up 12%. Rybelsus, too, witnessed a strong uptake and recorded sales of DKK 6.9 billion for the quarter, up 18%. Victoza sales declined 22% during the reported quarter.Obesity Care (Saxenda and Wegovy) sales were up 91% to DKK 21.4 billion. Wegovy sales continued to soar, recording DKK 19.9 billion in sales, representing a surge of 107%, driven by robust demands and Novo Nordisk’s efforts to meet the same.In the past three months, shares of NVO have plunged 21.6% compared with the industry’s 3.1% decline.Image Source: Zacks Investment ResearchSales in the Rare disease segment were up 25% to DKK 5.7 billion in the fourth quarter of 2024. Sales of rare blood disorder products were DKK 3.4 billion, up 16%. Sales of hemophilia A products increased 29%. Hemophilia B products’ sales increased 15%. Sales of NovoSeven also increased 12% to DKK 2.2 billion. Sales of Novo Nordisk’s rare endocrine disorder products soared 53% to DKK 1.9 billion.Sales and distribution costs climbed 9% in the reported quarter to DKK 18.7 billion. This increase was due to promotional activities related to Wegovy in North America. In International Operations, costs related to Obesity care market development activities and Wegovy launch activities contributed to the increase.Research and development (R&D) costs were up 31% to DKK 13.8 billion. The rise in R&D costs was driven by increased clinical activity for late-stage studies and research activities mainly related to Diabetes and Obesity Care as well as impairments related to intangible assets.NVO’s 2024 ResultsSales for the year were $42.1 billion, representing growth of 25% in DKK and 26% at CER from the year-ago quarter’s figures. The total sales figure beat the Zacks Consensus Estimate of $39.9 billion.For the full year, Novo Nordisk reported earnings of $3.28 per ADR, surpassing the Zacks Consensus Estimate of $3.16.NVO’s 2025 OutlookNovo Nordisk expects its sales to grow in the band of 16-24% in 2025. The company expects its operating profit growth to be in the range of 19-27% in the current year.The updated sales outlook at CER reflects growth in both North America Operations and International Operations, primarily driven by increased sales volumes of GLP-1-based treatments for obesity and diabetes care. Per NVO, the impact of intensifying competition and continued pricing pressure within Diabetes and Obesity care is also captured in the guidance.Novo Nordisk has high expectations from this segment, especially from Ozempic in the diabetes market and Wegovy in the obesity care market. The company continues to remain concerned about periodic supply constraints and drug shortages across several products and geographies.However, the company has been heavily investing in ramping up its internal and external production capacity to tackle both the short- and long-term demands of its GLP-1 products.Our Take on NVO StockNovo Nordisk’s earnings and revenues beat estimates in the fourth quarter of 2024, primarily on the back of higher Diabetes and Obesity care sales. The key drugs in this segment have recorded year-over-year increases in revenues. Ozempic and Rybelsus have experienced great traction in the market since launch and have been witnessing increasing prescription trends. Wegovy, too, has been witnessing robust uptake so far, contributing significantly to the top line.However, Medicare has selected NVO’s semaglutide medicines for the second round of price negotiations in 2025. For continued coverage of its semaglutide medicines under Medicare, Novo Nordisk has until Feb. 28, 2025, to decide if it will participate in negotiations or pay a large tax on U.S. sales of the drugs. Either way, a decline in the company's profit margins is anticipated in the future.NVO has been investing heavily to tackle the demand for its GLP-1 drugs. However, the company has not been able to be as successful as its formidable adversary in the Obesity care market, Eli Lilly LLY. LLY’s Zepbound (tirzepatide) continues to maintain the best-in-class title for obesity treatment. It also markets tirzepatide under the brand name Mounjaro for type II diabetes (T2D). Moreover, Lilly’s tirzepatide injection products have been removed from the FDA’s drug shortage list. This shift suggests LLY can now meet the demand for obesity medications, potentially capturing a larger U.S. market share and boosting its revenues, while Novo Nordisk’s Ozempic and Wegovy remain on the list, limiting its sales opportunities.Adding to the setbacks, Lilly’s Zepbound had earlier outperformed Novo Nordisk’s Wegovy (20.2% compared with 13.7%, respectively) in a weight-loss head-to-head study. This could result in a change in patient preference from Wegovy to Zepbound, again leading to a loss of market share.Eli Lilly is slated to report its fourth-quarter and full-year 2024 results on Feb. 6, 2025, before the opening bell.Novo Nordisk A/S Price, Consensus and EPS Surprise Novo Nordisk A/S price-consensus-eps-surprise-chart | Novo Nordisk A/S QuoteNVO’s Zacks Rank & Stocks to ConsiderNovo Nordisk currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the sector are Castle Biosciences CSTL and Alnylam Pharmaceuticals ALNY. While CSTL currently sportsa Zacks Rank #1 (Strong Buy), ALNY carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.In the past 30 days, estimates for Castle Biosciences’ 2024 earnings have increased from 34 cents to 39 cents per share. During the same timeframe, the loss per share for 2025 has improved from $1.84 to $1.70. In the past three months, shares of Castle Biosciences have lost 13.8%.CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.In the past 30 days, estimates for Alnylam Pharmaceuticals’ 2024 loss per share have remained constant at 39 cents. The consensus estimate for 2025 earnings per share is currently pegged at 41 cents. In the past three months, shares of Alnylam Pharmaceuticals have lost 0.7%.ALNY’s earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 65.67%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alnylam Pharmaceuticals, Inc. (ALNY): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Castle Biosciences, Inc. 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