From Morningstar:

Novo Nordisk (NOVO B) released earnings on Wednesday, reporting stronger-than-expected results including a 36% full-year constant currency sales growth for the full year 2023, ahead of analyst expectations. The sales outperformance was driven by significant growth in diabetes and obesity sales, particularly for Wegovy. The share advanced 3.6% on Wednesday, continuing 0.7% on Thursday.

Analysts forecast a $170 billion global GLP-1 market by 2031, with obesity and overweight accounting for $120 billion of this market, and most of that relatively evenly split between Novo and Lilly. Investors expect to see key data on next-generation obesity drug candidates this year to support Novo’s wide economic moat.

Prescribing labels for semaglutide are expected to expand beyond basic indications in diabetes and obesity after the clear benefits proven in the Select trial. Positive data in heart failure, kidney disease, and knee osteoarthritis suggest promising potential for the drug’s use in other health issues, with additional data expected in liver disease (end of 2024) and Alzheimer’s (2025).

With roughly three quarters of Novo’s sales now tied to GLP-1 therapies, potential Medicare negotiation in 2028 and the semaglutide patent loss in 2032 in focus, Novo is focused on next-generation cardometabolic drug candidates.

Key metrics for Novo Nordisk shares include a Fair Value Estimate of 540 DKK, last close of 774.80 DKK, a 2-star Morningstar Rating, Wide Morningstar Economic Moat Rating, and a High Morningstar Uncertainty Rating.



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