How Important Are Ozempic and Wegovy to Novo Nordisk's Business?


At the start of 2020, Novo Nordisk (NVO 0.89%) was worth around $150 billion. Today, its market capitalization is north of $500 billion as it is now one of the most valuable healthcare companies in the world.

A big part of that reason is the rising popularity of two drugs: Ozempic and Wegovy. Both have been associated with helping patients shed significant amounts of weight. Thanks to social media, demand for the treatments has been through the roof, and that has sent the stock to new heights.

But just how dependent is Novo Nordisk on these two drugs, and does that pose a risk to investors?

Obesity care sales were behind the strong Q4 numbers

For the last three months of 2023, Novo Nordisk achieved year-over-year revenue growth of 37%, with net sales totaling 65.9 billion Danish krone ($9.9 billion).

One big reason was the company’s 105% revenue growth in obesity care sales. What’s important to note for investors is that obesity care includes Wegovy and Saxenda, but it does not include Ozempic, which is a diabetes treatment patients have been using off-label as a treatment for weight loss.

Novo Nordisk quarterly results shown in a chart.

How much Ozempic and Wegovy account for Novo Nordisk’s top line

Wegovy is still in the early stages of its growth, and last quarter, it brought in 9.6 billion Danish krone ($1.4 billion), while Ozempic’s sales totaled just over 30 billion Danish krone ($4.5 billion). Together, they accounted for 60% of the company’s total revenue.

The company also has an oral version of Ozempic, called Rybelsus. And if you include its revenue ($886 million), that equates to nearly 70% of revenue coming from just three products. The company is still working on an oral version of Wegovy, which, if approved, could be another huge revenue-generating product for the business.

For some investors, the company may not be diverse enough to be a safe long-term investment. But at the same time, focusing on some high-need areas such as diabetes and obesity where there is tremendous long-term potential can help focus the company’s efforts and lead to more efficiencies and better overall results.

Is Novo Nordisk a good stock to buy?

There’s no doubt Novo Nordisk is dependent on Ozempic and Wegovy. And in the future, it might become even more dependent on an oral weight-loss drug. But every healthcare company will have one or two key products that are going to be vital to its long-term success. For growth-oriented investors, the lack of more diversified growth products shouldn’t deter them from buying shares of Novo Nordisk.

This is a strong company that has been developing diabetes and weight-loss products for years. It’s in a great position to meet the growing need in those areas of healthcare in the future, which is why it can still be a great stock to put in your portfolio today.



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