Strong start, strategic caution: Novo Nordisk balances growth and headwinds

Overview

Novo Nordisk delivered strong Q1 2025 results with double-digit revenue and profit growth, led by soaring demand in obesity care. However, the company revised its full-year outlook due to lower-than-expected branded GLP-1 penetration in the U.S., impacted by compounded alternatives.

CEO Lars Fruergaard Jørgensen remarked: “We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments. Within R&D, we are pleased to have completed the last pivotal trial for our next-generation obesity treatment, CagriSema, and to have filed for US approval of oral semaglutide 25 mg, with the potential to be the first oral GLP-1 treatment for obesity.”

Q1 2025 vs. Q1 2024:

Net sales rose to DKK 78.1bn (+19% YoY and +18% constant exchange rates), driven by Obesity care sales growth of +65% (CER) and Diabetes care sales growth of +8% (CER).
- Total Obesity care sales rose to DKK 18.4bn (+67% YoY), driven by strong global uptake of Wegovy® (+83%), supported by launches in 25+ countries and U.S. access expansion via NovoCare® and CVS formulary inclusion.
- Total Diabetes care sales grew to DKK 55.0bn (+10% YoY), led by Ozempic® (+15%) and Rybelsus® (+13%).
- Total Rare disease sales increased to DKK 4.6bn (+5% YoY), driven by endocrine therapies and strength in Region China.
- Sales in U.S. Operations increased to DKK 44.3bn (+20% YoY), with +40% growth in Obesity care and +10% in GLP-1 diabetes, partially offset by compounded GLP-1 erosion and pricing headwinds.
- Sales in International Operations increased to DKK 33.8bn (+18% YoY), with Obesity care grew +137%, particularly in APAC (+250%) and Emerging Markets (+207%).
Gross profit was DKK 65.2bn (+18% YoY and +16% CER), with a gross margin of 83.5% (compared to 84.8% in Q1 2024).
Operating profit recorded a value of DKK 38.8bn (+22% YoY and +20% CER), supported by scale efficiencies and favorable product mix, with operating margin of 49.7% (vs. 48.7% in Q1 2024).
Net profit also increased to DKK 29.0bn (+14% YoY), with diluted EPS of DKK 6.53 (+15% YoY).
Sales and distribution costs increased to DKK 14.9bn (+12% YoY and +10% CER), while R&D costs were DKK 10.3bn (+20% YoY and +19% CER).
Capital expenditure recorded a value of DKK 13.4bn (+58% YoY), but net cash generated from operating activities rose to DKK 24.6bn (+72% YoY), while free cash flow also grew to DKK 9.5bn (+89% YoY), reflecting a strong operational performance despite elevated CapEx.

Novo Nordisk now expects sales growth of 13-21% and operating profit growth of 16-24% at constant exchange rates, reflecting headwinds from compounded GLP-1 use in the U.S. and currency effects. Growth will continue to be driven by increased global demand for GLP-1 therapies in obesity and diabetes, supported by access initiatives and new launches. Free cash flow is now projected at DKK 56bn-66bn, and capital expenditure is expected to remain elevated at ~DKK 65bn as supply chain investments ramp up. The company remains focused on long-term leadership in metabolic disease and expanding its innovative pipeline.

After a prolonged correction, Novo Nordisk shares rose +3.59% in the last trading session of this week, mainly on the back of financial results that beat analysts’ expectations, although the forecasts for this year were updated. The price closed at 444.30 DKK, remaining above a recent low and close to a possible technical support level. However, the stock remains below the two major moving averages of 50 days and 200 days, indicating that, in the medium to long term, the main trend remains negative. The RSI indicator (48.38) suggests a slight recovery in momentum, but does not yet indicate a clear trend change. The increased volumes of the recent period suggest renewed interest from investors, but the future direction will depend on the price’s ability to recover and hold key resistance levels.