Novo Nordisk's Wegovy Faces Challenges in Q1, But Company Remains Optimistic for H2 2025

Novo Nordisk, the Danish pharmaceutical giant, reported lower-than-expected sales for its popular obesity drug Wegovy in the first quarter of 2025, citing challenges from compounded GLP-1 products and market transitions. Despite these setbacks, the company maintains a positive outlook for the latter half of the year.

Q1 Performance and Market Dynamics

Wegovy, Novo Nordisk's flagship obesity treatment, generated global sales of 17.36 billion Danish kroner in Q1 2025, marking an 83% increase year-over-year but falling 7% short of analyst expectations. The U.S. market, in particular, experienced headwinds that tempered the drug's rapid expansion.

The company identified several factors affecting Wegovy's performance:

• Competition from compounded GLP-1 products, which impacted both Wegovy prescriptions and overall branded obesity market growth
• Wholesaler inventory shifts
• Lower realized prices

As a result of these challenges, Novo Nordisk has adjusted its full-year sales forecast, now projecting overall sales growth between 13% and 21% at constant exchange rates, down from the previous estimate of 16% to 24%.

Regulatory Landscape and Market Access

The landscape for GLP-1 treatments is evolving, with recent regulatory actions potentially favoring Novo Nordisk's position:

• In February, the FDA removed semaglutide injectables from its shortage list
• The agency is phasing out compounded versions of the drug from the market
• FDA's "period of enforcement discretion" for certain compounders ends later this month

Novo Nordisk is actively working to prevent unlawful and unsafe compounding while simultaneously boosting Wegovy access through strategic initiatives:

• Collaborations with telehealth companies
• Securing a prime position on CVS's national template formulary

Looking Ahead: H2 2025 and Beyond

Despite the Q1 challenges, Novo Nordisk's leadership remains confident in the company's growth trajectory. CEO Lars Fruergaard Jørgensen expressed optimism for the second half of 2025, stating that growth is expected "to pick up in the second half of the year."

The market appears to share this optimism, with Novo Nordisk's share price initially surging by about 5% following the earnings report and CEO comments, before settling to a more modest increase mid-morning.

As the U.S. GLP-1 market continues its period of transition, all eyes will be on Novo Nordisk to see if it can overcome the current challenges and deliver on its projected second-half growth for Wegovy and its broader portfolio of treatments.