Novo Nordisk’s face “Show Me” moment boosts Wegoby’s growth after the US copycat ban
By Maggie Fick
LONDON (Reuters) – The ban on the copycat version of Novonordisk’s Wegoby has begun to lift the use of weight loss drugs, but the company will need to show more robust growth in the coming months to strengthen market confidence, investors and analysts say.
According to IQVIA data shared with Reuters by industry analysts, the US Food and Drug Administration ban on May 22, a combined version of Wegovy, rose about 33% since May 22, when the U.S. Food and Drug Administration ban came into effect, according to IQVIA data.
Wegovy’s total prescriptions also increased, narrowing Eli Lilly and Co’s Zepbound lead. In the week that ended May 23rd, US Zepbound prescriptions exceeded Wegovy. By July 18th, the gap had reached approximately 133,000.
Early signs of a shift come at a critical time for NOVO. After Wegovy’s first amazing success, investors’ trust was rattled when Zepbound and Compouters began to slow the drug growth. And in May, the Danish company cut its forecasts for full year sales and revenues and announced the surprising withdrawal of CEO Lars Flugaard Jorgensen.
Jorgensen said he hopes the combined FDA ban will boost sales later this year. Investors want to hear if they still report quarterly revenue on August 6th.
This leaves the drugmaker in what Barclays analyst Emily Field called the “Show Me” phase. She has a “overweight” rating on Novo’s stock.
“We thought this trajectory would move stocks (with new prescriptions), but that wasn’t the case up until then,” Belenburg analyst Kelly Holford told Reuters. “I think investors are waiting for an update (in the second quarter). Will they trim the guidance range? Berenberg has a ‘hold’ rating on NOVO.
Novo did not respond to requests for comment.
Investors and analysts point out that IQVIA prescription data is incomplete. This is because it has not been able to win sales of Wegovy through the company’s consumer platform NovoCare, which launched in March. They estimate that the channel is still a small slice of the overall Wegovy volume.
“We hope to expect strong growth from the Novokaa channel, but we recognize that this could lead to lower initial prices,” said Marcus Morris-Eyton, portfolio manager at Alliance Bernstein.