Novo Nordisk's net profit growth decelerated in Q2 2024 due to several factors influencing the company's financial performance:
- Impact of Production Constraints on Wegovy Sales: Despite strong demand for Wegovy, Novo Nordisk faced production capacity limitations, which curbed growth in the quarter. The company had to reduce supply of low doses in the U.S., which affected quarterly sales growth1. This suggests that the slowdown in net profit growth may be attributed to the inability to meet the growing demand due to production constraints.
- Decreasing Insulin and Rare Disease Sales: While Diabetes and Obesity Care sales increased, there was a partial offset from decreasing insulin and rare disease sales2. This decline might have had an impact on overall net profit growth, indicating that the slowdown could be a result of various factors affecting different segments of the business.
- Higher Costs and Price Pressure: Increased costs for production expansions, price pressure on insulin in the U.S., and currency effects likely had an impact on gross margin, which in turn affected net profit growth1. These factors suggest that higher operational costs and market conditions may have contributed to the slowdown in net profit growth.
In conclusion, Novo Nordisk's net profit growth in Q2 2024 was influenced by a combination of factors including production constraints, changes in sales patterns of certain products, and increased operational costs. These factors, either directly or indirectly, impacted the company's net profit growth during the period.