Proactive Investors – Novo Nordisk (CSE:) could be in line for ‘dramatic earnings upgrades’ as pace builds on the rollout of its weight loss drugs, analysts say.
Wegovy sales could hit 76 billion Danish Krone (US$11 billion) this year, Morgan Stanley (NYSE:) said in a note, after starter doses increased six-fold up to early May.
This would see sales of the GLP-1-based weight loss drug, which mimics hormones that lower blood sugar and suppress hunger, sit 23% ahead of Novo’s compiled consensus.
“The acceleration in Wegovy starting dose prescriptions, if sustained, could support dramatic earnings upgrades,” Morgan Stanley said as a result.
Based on US trends, the figure could theoretically hit 127 billion Danish Krone, seeing Morgan Stanley’s revenue growth forecast increased to over 50%, against current market consensus of 25%.
An ‘overweight’ rating was offered as a result, alongside a 990 Danish Krone share price target, up on Friday’s close of 883.2.
“We continue to believe that Novo and Lilly are set to dominate the diabesity market, retaining their duopoly for the foreseeable future,” the bank said.
Citi analysts highlighted a ‘buy’ rating for the drug firm in the meantime, noting Wegovy starter doses were “rocketing”.
Tight supply chains could cap this though, Citi said, with a 975 Danish Krone share price target being offered.
Morgan Stanley pointed to significant investment by Novo in such supply chains, adding this created barriers to entry for rivals.
“Whilst significant uncertainty continues to exist when it comes to supply dynamics, our modelling suggests that total Wegovy weekly prescriptions could reach 330,000 by the end of June,” the bank said, against roughly 25,000 over the first quarter.
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