Novo Nordisk's Q2 results show strong profit, but competition from rival treatments weighs on sales.

Novo Nordisk posted a 32% increase in Q2 net profit to $4.1bln and an 18% rise in sales to $76bln. However, the popularity of its anti-diabetes and weight-loss treatments Ozempic and Wegovy has been weighed down by growing competition from rival treatments made by Eli Lilly in the US, and a FDA rule allowing pharmacies to create copycat versions of the drug.

Novo Nordisk, a Danish pharmaceutical company, has released its final figures for the second quarter, revealing a significant increase in revenue and operating profit. The company reported a 32% increase in net profit to DKK 26.503 billion, with an 18% rise in sales to DKK 76.857 billion [1].

Revenue rose by 12.9% to DKK 76,857 million (DKK 68,060 million), while operating profit reached DKK 33,449 million (DKK 25,934 million), with an operating margin of 43.5% (38.1). The expected operating profit was DKK 34,450 million according to Bloomberg estimates [1]. Profit before tax amounted to DKK 33,805 million (DKK 25,332 million), and earnings per share stood at DKK 5.96 (DKK 4.50) [1].

The Board of Directors has decided on an interim dividend for 2025 of DKK 3.75 per share, an increase of approximately 7% from DKK 3.50 in August last year. The dividend payout will take place in August [1].

Despite the strong financial performance, Novo Nordisk faced challenges in its obesity market. The company revised its forecasts for 2025, with sales growth now expected to be between 8 and 14%, and operating profit projected to increase by 10-16% in constant currencies. Previous guidance anticipated sales growth of 13-21% and operating profit to rise by 16-24% [1].

The outlook is related to lower growth expectations for Wegovy in the U.S. obesity market, for Ozempic in the U.S. GLP-1 diabetes market, as well as for Wegovy in selected IO markets. Novo Nordisk continues the global rollout of Wegovy to more markets and is investing in commercial activities to drive market penetration for both Wegovy and Ozempic [1].

Investments, or capex, are expected to be around DKK 65 billion this year, with free cash flow now estimated to be between DKK 35 and 45 billion, a reduction from the May guidance of DKK 56-66 billion [1].

In connection with the profit warning, Mike Doustdar, currently head of International Operations, will take over as CEO from Lars Fruergaard Jørgensen [1].

Novo Nordisk has also been facing legal challenges. Investors have filed a class action lawsuit against the company, claiming that Novo Nordisk misled them with optimistic growth forecasts and minimized competition risks in the obesity market [2]. The lawsuit was filed on behalf of potentially thousands of investors who purchased Novo’s stock between May 7, 2025, and July 28.

Eli Lilly, a rival in the weight-loss drug market, is also expected to report its Q2 earnings on Thursday. Analysts expect Lilly to post earnings per share (EPS) of $5.60 on $14.7 billion in revenue [4].

References:
[1] https://www.marketscreener.com/news/novo-nordisk-reports-increased-revenue-and-operating-profit-ce7c5ed9d98df722
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TW042:0-wegovy-maker-novo-hit-with-investor-class-action-over-revenue-forecast-cut/
[4] https://www.tastylive.com/news-insights/lly-earnings-preview-14-billion-revenue-expected-weight-loss-drugs-dominate