By Maggie Fick
LONDON (Reuters) -Novo Nordisk on Wednesday posted second-quarter operating profit below expectations, raised its 2024 sales forecast but trimmed profit outlook, as competition from Eli Lilly in the booming weight-loss drug market intensifies.
Operating profit in the quarter rose 8% at constant exchange rates to 25.9 billion Danish crowns ($3.8 billion) compared with the 27.3 billion forecast by analysts in a LSEG poll and Novo's Frankfurt-listed shares fell 3.2% just after market opening.
The Danish company said it now expected sales growth this year of between 22% and 28% in local currencies, compared to the previously guided range for 19% to 27% growth.
"We are pleased with the sales growth in the first half of 2024, which has enabled us to raise the outlook for the full year," CEO Lars Fruergaard Jorgensen said in a statement.
But the company lowered its forecast for operating profit growth this year, to between 20% and 28% in local currencies, compared to its previous forecast of 22% to 30% .
Novo ended an advanced kidney disease trial in June, which resulted in an impairment loss of 5.7 billion Danish crowns, which the company said impacted operating profit.
The worse-than-expected second-quarter profits may deepen investor worries that Novo's first-mover advantage in the fast-growing obesity drug market is at risk.
Sales of Wegovy, Novo's first-to-market weight-loss drug, also came in weaker than expected. Sales rose 53% to 11.66 billion crowns compared to the 13.54 billion expected by analysts in a company-compiled consensus.
Some analysts forecast the obesity drug market could be worth about $150 billion by the early 2030s.
Investors are keen to hear from more from Novo - Europe's most valuable listed company worth about $550 billion - on Wednesday about when it expects to significantly boost supplies of Wegovy in the U.S. and end shortages as rival Lilly swiftly builds market share.
The company is spending billions of dollars to increase production of Wegovy to meet runaway demand and fend off Lilly, which launched its rival therapy Zepbound in the U.S. in December last year.
($1 = 6.8402 Danish crowns)
(Reporting by Maggie Fick; Editing by Terje Solsvik and Tomasz Janowski)