Novo Nordisk’s Q1 Profit Surges Amid Mixed Signals on GLP-1 Dominance

COPENHAGEN — Novo Nordisk delivered a resilient first quarter in 2025, reporting a net profit of 29.03 billion Danish kroner ($4.4 billion), surpassing analyst expectations. However, the results underscored a complex landscape for the Danish pharmaceutical giant, where strong demand for its GLP-1 therapies was tempered by the disruptive rise of compounded generics and revised growth forecasts.

The company’s total revenue rose 18% year-over-year to 78.09 billion Danish kroner, though this fell narrowly below estimates. The mixed performance hinged on contrasting fortunes for its two blockbuster drugs: Wegovy, the weight-loss injectable, and Ozempic, which serves dual roles in diabetes and obesity management.

Wegovy Stumbles, Ozempic Shines

Wegovy sales surged 83% to 17.36 billion Danish kroner, but this was 7% below analysts’ forecasts, as compounded generic versions of semaglutide (Wegovy’s active ingredient) eroded branded sales in the U.S. during early 2025. Compounding pharmacies had legally produced these generics due to a temporary FDA shortage designation, which was revoked in February 2025. Novo Nordisk now expects compounded drug competition to wane after May 22, when the FDA’s ruling takes full effect.

Meanwhile, Ozempic sales hit $4.9 billion, outperforming expectations by 3%, driven by strong demand in the U.S. and Europe. CEO Lars Fruergaard Jørgensen noted that Novo still holds 72% of the global GLP-1 market for obesity and diabetes, a figure bolstered by supply expansions in 25 countries.

Regulatory Relief and Strategic Pushback

The FDA’s reversal on compounded semaglutide is a critical turning point. Novo Nordisk estimates compounded generics accounted for ~$500 million in lost Wegovy sales in Q1 alone. To recapture momentum, the company is pursuing legal action against noncompliant pharmacies and expanding access via partnerships. For instance, a deal with telehealth platform Hims & Hers aims to simplify Wegovy prescriptions, while CVS Health’s formulary preference for branded GLP-1s could shield Novo’s pricing power.

The CEO also emphasized supply improvements, with three new markets added in the quarter and plans to boost production capacity. These moves are essential: Novo now projects 2025 sales growth of 13%–21% (constant currency), down from its earlier 16%–24% range. Operating profit guidance was similarly cut, reflecting the drag from compounded competition and supply constraints.

Pipeline Progress and Competitive Pressures

Despite near-term challenges, Novo’s pipeline remains robust. The company plans to file for regulatory approval of CagriSema—a combination of two GLP-1 agonists—in early 2026. If approved, it could offer superior weight-loss efficacy compared to single-agent therapies like Wegovy. Additionally, an oral semaglutide formulation, now under review by the FDA, could redefine convenience in obesity treatment.

Yet competition is intensifying. Rival Eli Lilly’s Zepbound has gained traction through lower pricing, while Roche and AstraZeneca are advancing rival GLP-1 drugs. Analysts warn that Novo’s dominance may erode unless it can sustain innovation and counter price-sensitive markets.

Investor Takeaway: Betting on Recovery, Bracing for Headwinds

Investors responded positively to the Q1 report, pushing shares up nearly 6% on optimism that compounded competition will fade. The stock’s rise reflects confidence in Novo’s second-half recovery narrative, but risks linger. Near-term hurdles include:
- Supply chain bottlenecks: Even with expanded production, demand for GLP-1 therapies outstrips capacity in some regions.
- Pipeline uncertainty: CagriSema’s trial data showed mixed efficacy, raising questions about its commercial viability.
- Generic threats: While compounded semaglutide is fading, Lilly and others are preparing cheaper alternatives to hit markets by 2026–2027.

The revised guidance suggests Novo is recalibrating expectations, but its long-term prospects hinge on executing its strategy flawlessly. With a 72% market share and a pipeline that could redefine obesity treatment, Novo remains a leader—if it can navigate the next 18 months without further missteps.

Conclusion

Novo Nordisk’s Q1 results paint a picture of a company both resilient and vulnerable. The profit beat and Ozempic’s strong performance highlight enduring demand for its therapies, while Wegovy’s struggles underscore the fragility of its market position. The FDA’s action on compounded drugs removes a key obstacle, but investors must weigh near-term headwinds against the long-term dominance of GLP-1s in obesity and diabetes care.

With a 5.8% stock jump post-earnings and a second-half recovery narrative in place, Novo’s shares reflect cautious optimism. However, the true test will come in the latter half of 2025, when compounded competition fades and rival drugs begin to hit the market. For now, Novo’s story remains one of growth tempered by the relentless march of competition—a balance investors will monitor closely.