By Maggie Fick and Jacob Gronholt-Pedersen

COPENHAGEN (Reuters) – Novo Nordisk reported forecast-beating third-quarter sales of its popular Wegovy weight-loss drug on Wednesday, reassuring investors worried that demand was slowing and it could lose the race in the fast-growing obesity drug market.

Shares in Novo Nordisk, which competes with Eli Lilly in an obesity drug market that some analysts forecast could be worth about $150 billion by the early 2030s, rose nearly 9% before reversing course later in the day to trade down 2%.

The share price jump had added around $40 billion to the company’s market value.

Sales of Wegovy totalled 17.3 billion Danish crowns ($2.5 billion) in the third quarter, ahead of the 15.9 billion expected by analysts in a company-compiled consensus and up 48% from the previous quarter.

The Danish drugmaker said it has tripled Wegovy production over the last three years and will continue to ramp up at the same pace.

“We still have a situation where there are far more patients who would like to have the treatment than what both Eli Lilly and we can supply,” CEO Lars Fruergaard Jorgensen told Reuters.

But total group sales, which rose 21% to 71.3 billion crowns, came below the 72.3 billion crowns expected by analysts due to weaker-than-expected diabetes drug Ozempic sales.

Novo said U.S. sales growth was hurt by the phasing out of rebates – volume-based discounts negotiated by pharmaceutical companies with U.S. pharmacy benefit managers – in 2023.

Investors had feared the drugmaker would cut its outlook on Wednesday, so the third-quarter results came as somewhat of a relief, said Terence McManus, fund manager at Switzerland’s Bellevue Asset Management, which holds Novo shares.

“However, we don’t see these results as an all-clear signal on the stock,” he said.

The company is due to release data before the end of this year from a late-stage trial of CagriSema, a two-drug combination obesity treatment that like Wegovy is injected.

Novo expects CagriSema to lead to weight loss of 25%, compared with Wegovy’s 15%, a result which analysts say is a must-win for Novo’s obesity-tackling investment case.

The Wegovy sales beat was a relief, though pricing pressure in the United States was slightly worse than they expected, analysts said.

Investors were nervous ahead of the results, after U.S. rival Eli Lilly last week posted results for its weight-loss drug Zepbound sales that fell short of expectations.

“Following the sobering third-quarter Eli Lilly numbers, it seems that investors are increasingly regaining hope for both of the leading obesity players,” Alexander Jenke, a portfolio manager at Medical Strategy in Munich, told Reuters.

Wegovy and Zepbound are part of a class of drugs that mimic an intestinal hormone called GLP-1, either on their own or in combination with compounds that target a second hormone to create a sense of fullness and reduce appetite.

Novo’s leading position in obesity drugs, coupled with ferocious demand which has outpaced supplies, helped make it Europe’s biggest company by market capitalisation last year. It is now worth $489 billion, but has lost 28% of its value since peaking in June.

OUTLOOK

Jorgensen said the company was lifting curbs on Wegovy prescriptions in the United States, and that the slower pace of weekly U.S. prescriptions in the last couple of months was due to lower starter doses being supplied into the market.

“You can find different periods of times where you can say it’s plateauing but it’s not because of plateaued demand, it’s simply because of the supply into the market,” he said.

Novo has now launched Wegovy in at least 16 countries, it said, but declined to name the additional nations since August when the company said it was in 12 countries.

The drugmaker said it now expects sales growth this year of between 23% and 27% in local currencies, compared to the previously guided range for 22% to 28% growth.

The outlook reflected continued pricing pressure on its obesity and diabetes drugs and the costs of investing in expanding output of its existing drugs as well as in its pipeline of next generation obesity drugs, it said.

Operating profit growth this year is now seen at between 21% and 27% in local currencies, compared to its previous forecast of 20% to 28%.

($1 = 6.9430 Danish crowns)

(Reporting by Maggie Fick and Jacob Gronholt-Pedersen; Additional reporting by Stine Jacobsen; Editing by Terje Solsvik, Josephine Mason, Tomasz Janowski and Emelia Sithole-Matarise)

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