Novo-Nordisk A/S reported a 4% decline in Q1 net sales, but the oral version of Wegovy significantly exceeded expectations, prompting a slight upward revision to the full-year guidance.

$Novo-Nordisk A/S (NVO.US)$Driven by the strong launch of the oral formulation of Wegovy, the upper limit of the expected decline in full-year 2026 performance has been narrowed from 13% to 12%. However, excluding the one-time reversal of provisions related to the U.S. drug pricing program, the company’s core business sales still recorded a decline, reflecting the ongoing erosion of financial performance due to pricing pressures.

Data released by the company on May 6 showed that adjusted net sales in the first quarter of 2026 decreased by 4% year-over-year on a constant currency basis to DKK 70.063 billion (approximately USD 11 billion), while adjusted operating profit fell by 6% to DKK 32.858 billion. Driven by non-recurring factors such as the reversal of provisions amounting to approximately USD 4.2 billion related to the U.S. 340B Drug Pricing Program, reported net sales increased by 32% on a constant currency basis, with operating profit surging by 65%.

Since its launch in January, the oral tablet version of Wegovy has gained significant momentum, with prescriptions exceeding 200,000 as of the week ending April 17. The company described this as the strongest-ever launch performance of a GLP-1 product in the U.S. market. However, Novo-Nordisk A/S has ceded its leading position in the injectable Wegovy market to Eli Lilly and Co's Zepbound, while Foundayo, an oral obesity drug launched by Eli Lilly last month, poses direct competition.

$Novo-Nordisk A/S (NVO.US)$The stock price has fallen approximately 12% year-to-date, with the market adopting a cautious stance on its long-term competitiveness.$Eli Lilly and Co (LLY.US)$During the same period, the stock price fell by about 8%. As of the time of writing,$Novo-Nordisk A/S (NVO.US)$U.S. stocks surged more than 7% in pre-market trading, reaching $48.14.

"Reversal of Provisions" Masks Core Earnings Decline

In the first quarter, the reversal of provisions related to the U.S. 340B Drug Pricing Program brought a non-recurring positive impact of approximately USD 4.2 billion, significantly improving reported financial figures. Excluding this factor, adjusted U.S. sales declined by 11% on a constant currency basis, primarily due to lower realized prices, partially offset by volume growth of the Wegovy series. International sales grew by 6% on a constant currency basis, driven by higher volumes.

"Reversal of provisions" refers to the process where companies (typically banks or financial institutions) transfer back previously accrued reserves (provisions) set aside to cover asset losses, reclassifying them as profits.

$Novo-Nordisk A/S (NVO.US)$Chief Executive Officer Mike Doustdar stated that the robust performance of the Wegovy series and sustained international business growth prompted the company to raise its full-year guidance. He positioned the oral tablet version of Wegovy as "the only oral peptide drug for treating obesity," stating that it is creating a new category and "redefining patient and physician expectations."

Wegovy Oral Tablets Set GLP-1 Launch Record

The oral tablet version of Wegovy was officially launched in the U.S. on January 5, 2026. By the end of the first quarter, cumulative prescriptions had reached approximately 1.3 million, surpassing 2 million since its launch, with over one million patients currently using the drug. Novo-Nordisk A/S described this as the strongest-ever launch performance of a GLP-1 product in the U.S. market.

In the first quarter, sales of Wegovy oral tablets reached DKK 2.256 billion. However, the company noted that this figure does not fully reflect actual market demand due to pre-launch channel stocking by wholesalers and telemedicine partners. The company anticipates that the initial rollout of Wegovy oral tablets in markets outside the United States will commence in the second half of 2026, contingent upon local regulatory approval timelines.

Pipeline progress strengthens product portfolio

On the pipeline front, the high-dose injectable Wegovy HD (semaglutide 7.2mg) received FDA approval in March and was launched in the United States on April 7. This product achieved an average weight loss of 20.7% in the STEP UP trial, further reinforcing the Wegovy product lineup. Concurrently, the company also initiated the AMAZE Phase III clinical program for zenagamtide targeting obesity indications.

In other therapeutic areas, Awiqli, the world’s first once-weekly basal insulin for type 2 diabetes patients, received FDA approval; etavopivat, an investigational drug for sickle cell disease, successfully met two co-primary endpoints in the HIBISCUS Phase III trial.

Competitive pressures persist, with limited room for upward revision of full-year guidance

$Novo-Nordisk A/S (NVO.US)$The guidance range for the growth rates of adjusted sales and adjusted operating profit for 2026 has been revised to a decline of 4% to 12% at constant exchange rates, compared to the previous expectation of a maximum decline of 13%. This relatively wide guidance range reflects the high level of uncertainty that management continues to face regarding pricing trends and competitive dynamics.

$Novo-Nordisk A/S (NVO.US)$Novo-Nordisk A/S is attempting to narrow the competitive gap with Eli Lilly and Co through significant price cuts and a focus on the oral tablet version of Wegovy. However, with Eli Lilly and Co's oral obesity drug Foundayo officially entering the market, the competition between the two companies in the oral formulation space has fully intensified. Whether Novo-Nordisk A/S can maintain and expand its first-mover advantage in the oral GLP-1 segment will remain a key issue for market attention.

Editor/joryn