Novo Nordisk A/S Q1 FY2025 earnings call

Focus on Purpose and Sustainability

• Serves nearly 46 million patients with diabetes and obesity treatments, an increase of almost 4 million vs Q1 2024.
• Total carbon emissions rose 37% due to production expansions. Women in senior leadership positions increased to 42%.

R&D Milestones

• Completed REDEFINE 2 pivotal trial for CagriSema, on track for submission in Q1 2026.
• Wegovy 2.4 mg for MASH accepted by U.S. FDA with priority review; oral Semaglutide 25-mg submitted to U.S. FDA.
• In-licensed 2 early-stage assets for obesity and cardiometabolic diseases.

Commercial Execution

• U.S. operations sales grew 17%, international operations grew 19%.
• GLP-1 diabetes sales up 11%, obesity care up 65%, rare disease up 3%.
• Invested over USD24B in U.S. over 10 years, expanding manufacturing sites.

Organizational Changes

• Camilla Sylvest stepped down; organizational restructure to enhance decision-making, with Ludovic Helfgott taking on new roles.

In the first 3 months of 2025, Novo Nordisk delivered 18% sales growth and 20% operating profit growth at constant exchange rates. Product segment performance: GLP-1 diabetes care sales in U.S. grew 10%, international grew 13%; Obesity care sales saw a 65% increase, with U.S. up 40% and international up 137%; Rare disease sales increased 3%, with international up 5% and U.S. up 1%; Interest sales grew 3%, driven by U.S. operations growing 13%.

Sales Growth

• Expected range: 13%-21% at constant exchange rates, lower due to compounded GLP-1 in U.S. due to branded GLP-1 penetration impact.

Operating Profit Growth

• Expected range: 16%-24% at constant exchange rates, reflecting lower sales growth offset by reduced spending.

Free Cash Flow

• Expected: DKK56 billion to DKK66 billion.

Net Financial Items

• Expected gain of ~DKK0.9 billion, driven by hedged currency gains offset by interest expenses.

• Rapid expansion of compounding in the U.S. negatively impacting branded GLP-1 penetration.
• Potential tariffs on pharmaceutical products in the U.S. could materially affect financial outlook.

Q: About compounders in the U.S. and competitive effects from Mounjaro.

A: Dave Moore and Mike Doustdar discussed efforts to combat compounding and Ozempic's market share in international operations, noting 64% volume market share on injectable GLP-1.

Q: On guidance and compounding pharmacy.

A: Karsten Munk Knudsen and David Moore explained guidance ranges, impact of compounding on Wegovy market share, and tactics to capture patients transitioning from compounded to branded products.

Q: On CBS and oral semaglutide.

A: Lars Jorgensen discussed CVS's formulary decision supporting optionality and the potential of oral Semaglutide 25-mg as a first oral GLP-1 treatment for obesity.

Q: On political risk and CagriSema pipeline.

A: Lars Jorgensen addressed political risk in pricing negotiations, and Martin Holst Lange discussed CagriSema's trial timeline and regulatory process.

Q: On compounded semaglutide pricing and stay time.

A: David Moore and Karsten Munk Knudsen talked about pricing differences between compounded and branded Wegovy, and stay time in obesity treatment averaging 7.4 months.