COPENHAGEN, (Reuters) — Novo Nordisk shares fell 16% Monday as the Danish drugmaker was affected by U.S. supply problems for its new weight loss drug. The company is trying to establish a foothold in the US prior to when Eli Lilly launches a rival drug.
Novo’s Wegovy drug is a first in the obesity market. The drug, which can help you lose weight by 17 percent per year, on average and is expected to ease the growing pressure on its core insulin business.
Novo announced that a contract manufacturer who filled syringes in order to make pens for injecting the drug had temporarily halted deliveries and manufacturing due to issues with good manufacturing practices.
The Danish drugmaker was already dealing with distinct supply challenges after being “overwhelmed” by the first uptake of the drug.
As a consequence, fewer new patients will start treatment with the drug in the first half of next year’s. Novo now expects to be able to meet U.S. demand in the second half of next year, despite previously estimating it would do so at the beginning of the year.
Novo finance chief Karsten Kunk Knudsen told reporters on Monday that it was extremely difficult to limit supply at a level that met demand.
Novo declined to identify the contract manufacturer, but stated that the issues were related to a European location of a large multinational company. Novo stated that the contract manufacturer has a “good strategy” and is currently in daily contact.
Analysts at JP Morgan, which cut its Novo Nordisk rating to neutral on Monday, noted that the supply issues would also give it less time to establish the drug on the market prior to the 2024 launch of Eli Lilly’s (LLY.N) tirzepatide drug for obesity.
Novo’s Knudsen said that there must be enough space for both agents to compete on the market.
The company’s shares were down about 10.5 percent at 0949 GMT after closing on Friday with a year-to-date gain of 76%.
Novo said the news does not impact its outlook for 2021 and that it would provide its outlook for the coming year in conjunction with full-year earnings on Feb. 2.
It forecasted that sales growth would slow to 3% by 2022 due to lower prices and a decline in insulin sales volumes from China.
Content Source: https://www.medscape.com/viewarticle/965313?src=rss