Novo Nordisk shares surge as weight loss treatments boost profits

Europe's largest pharmaceutical firm, Novo Nordisk, reported fourth-quarter earnings that surpassed analysts' expectations. The company’s shares jumped more than 6% at the market open in Europe following the results. Its stock remains flat in year-to-date performance.

However, the company expects slower growth in 2025, likely due to increasing competition in the weight-loss market, particularly from its US rival, Eli Lilly.

Novo Nordisk's operating profit rose 37% to 36.7 billion Danish kroner (€4.92 billion), compared to the estimated 33.6bn DKK (€4.5bn). Full-year operating profit increased by 25% (26% in constant currency) in 2024 to 128.3bn DKK (€17.2bn), with sales in diabetes and obesity care rising by 26%, mainly driven by GLP-1 diabetes sales growth of 21%.

The firm's most popular weight-loss drug, Wegovy, posted a 107% year-on-year growth in sales to 19.87bn Danish kroner (€2.66bn) in the fourth quarter, although slightly missing expectations.

However, the annual growth rate slowed from 35.6% in 2023 and 27.6% in 2022. Its net profit margin also declined to 34.8% in 2024 from 36% in the previous year.

Investors are focused on the company's next-generation weight-loss drugs, as the patent for its blockbuster drug Wegovy is set to expire in the early 2030s. Recently, Novo Nordisk revealed trial results for two new obesity drugs, CagriSema and Amycretin.

The former disappointed investors with less-than-projected weight loss, resulting in a 20% intraday plunge in its share price. However, the latter provided positive results, reassuring investors about its growth prospects.

Demand for weight-loss drugs surged throughout 2024, outpacing supply for most of the year. In December, Novo Holdings, an investment foundation of