Novo Nordisk (NYSE:NVO) first-quarter results offered few surprises, but they may just have delivered the market something it needed more: relief.
That collective anxiety release was reflected in the share price, which rose 4%. In other words, it could have been a lot worse.
According to UBS, the anticipated downgrade to full-year guidance was already baked into expectations, and attention will now shift to how the Danish drugmaker can reignite momentum in the US obesity market.
Sales rose 18% at constant exchange rates, in line with consensus, though weight-loss jab Wegovy revenue came in 7% below forecasts due to weaker-than-expected net pricing in the US.
Destocking hit
Novo attributed half of that miss to destocking, with the rest largely explained by pressure from compounded versions of GLP-1 drugs. Still, the hit was cushioned by stronger performance in insulin, particularly Tresiba, and tight cost control, which helped earnings per share beat by nearly 5%.
UBS analysts expect near-term relief in the share price, noting that their own estimates (16% sales and 19% EBIT growth for 2025) sit comfortably within Novo’s revised guidance range.
The company now expects full-year sales to grow between 13% and 21%, and EBIT between 16% and 24%, down from previous targets of 16–24% and 19–27%, respectively.
With the worst of the downgrades likely behind it, the key investor focus is shifting. UBS says attention is now squarely on whether Novo can deliver a commercial rebound in obesity.
More aggression
Recent moves, including partnerships with telehealth provider Hims & Hers and an exclusivity deal with CVS Health, suggest a more aggressive push to regain momentum.
But there are concerns that these deals may have come with pricing concessions: a possibility reflected in the lower gross-to-net figures seen for Wegovy in the first quarter.
Novo has flagged that gross-to-net can vary significantly quarter to quarter due to rebate timing, and management is expected to provide more clarity on the call.
Second-half recovery?
The company is also pinning a second-half recovery on three fronts: tackling the compounded drug market, expanding access via its new channels, and ramping up international sales of Wegovy.
While pricing pressure remains a live debate, UBS notes the planned removal of compounded semaglutide from the US market could provide a tailwind, though the timeline is unclear.
On the pipeline side, Novo confirmed it will file for approval of its CagriSema drug in early 2026. It has scrapped development of its once-weekly oral semaglutide in phase 1, while a new delivery device for Wegovy is under regulatory review in the US.
Overall, UBS says the results largely met expectations and may help draw a line under recent uncertainty, at least for now.