COPENHAGEN (Reuters) -Diabetes and obesity drug developer Novo Nordisk (CSE:NOVOb) on Thursday significantly raised its full-year operating profit and sales expectations on the back of strong demand for its highly popular Wegovy obesity drug.
"The sales outlook for 2023 is raised, primarily reflecting Wegovy prescription trends in the first quarter and higher full-year expectations for sales of Wegovy in the U.S.," Novo Nordisk said in a statement.
Shares in Novo traded up 2% at 1204 GMT at an all-time high.
Novo now expects sales growth in local currencies for 2023 to come in between 24% and 30% and operating profit growth between 28% and 34%, up from a February guidance of between 13% and 19% for both those numbers.
"Novo Nordisk is a large company and growing at double-digit growth rates doesn't happen automatically. I think many other large pharmaceutical companies of Novo's caliber will be envious," Sydbank analyst Soren Lontoft Hansen told Reuters.
The guidance upgrade also partly reflected higher expected sales in the U.S. of its Ozempic diabetes drug, which is based on the same active ingredient as Wegovy - semaglutide.
Semaglutide belongs to a class of drugs known as GLP-1 analogues, which mimic an intestinal hormone which reduces appetite and increases the feeling of fullness after eating.
Novo Nordisk was overwhelmed by demand for Wegovy after it was launched in the United States in 2021 and the firm's supply constraints were exacerbated when a contract manufacturer had to temporarily suspend production over manufacturing issues.
A second contract manufacturer is ready to begin production of Wegovy, which would increase supply, Novo also said on Thursday. The company in February warned of some supply constraints this year.
"The upgrade reflects that Novo is able to meet the demand for the whole year in terms of production, because it is a very vertical curve we are seeing for Wegovy in terms of prescriptions," Hansen told Reuters.
Novo also said in March that Ozempic, its best-selling diabetes treatment drug, was back in supply after months of shortages, which could partly be explained by prescriptions to non-diabetic patients seeking to use the drug to lose weight via so-called off-label use.
Wegovy has been launched in the U.S., Denmark and Norway and the company expects the drug to be available in more European markets this year.
In the first quarter of this year, Novo's sales increased by 25% and operating profit rose by 28% in local currencies, the company said. Novo will present full financial results for the first quarter on May 4.