Novo Nordisk issues profit warning as Denmark lowers economic forecast
Novo Nordisk issued a profit warning, leading Denmark's fiscal supervisory authority to lower its economic forecast. It is expected that Denmark's exports will grow by 3% this year, down from the previous expectation of 4.6%, and the export growth forecast for next year has also been revised down from 3.4% to 2%. In addition, Denmark's GDP growth forecast for 2025 has been lowered from 3% to 2.6%. Novo Nordisk has adjusted its sales growth target due to increased market competition and a decline in stock prices, expecting sales growth to be between 13% and 21% in 2025
According to the Zhitong Finance APP, the Danish Financial Supervisory Authority predicts that Denmark's export growth will be significantly lower than previously expected, partly due to setbacks faced by Novo Nordisk AS (NVO.US) in the United States. The Danish Economic Council, which serves as a supervisory body providing advice to the government, stated in a report released on Tuesday that Denmark's overseas sales are expected to grow by 3% this year, down from the 4.6% forecast in February and last year's growth rate of 7.5%.
The agency indicated that this change is partly attributed to the profit warning issued by Novo Nordisk earlier this month, and it has also revised next year's export forecast down from the previously expected growth of 3.4% to 2%.
As a result, the council has also lowered its GDP growth forecast for Denmark in 2025 from 3% to 2.6%. The expected economic growth rate for next year is 0.9%, down from the previous expectation of 1.2%.
In recent years, as Novo Nordisk has become the world's largest pharmaceutical company, Denmark's job market and public finances have also been boosted. The economy of this Nordic country has prospered due to the successful development of obesity treatment drugs. However, Denmark is now also facing the negative impacts brought about by this relationship.
On May 7, Novo Nordisk lowered its sales growth target and profit expectations for 2025, citing intensified competition for its weight loss drug Wegovy in the U.S. market as the reason for this situation. The company then announced that it would replace its CEO due to market challenges and a decline in stock prices. In the first quarter, sales of Novo Nordisk's weight loss drug Wegovy reached DKK 17.36 billion, an 85% year-on-year increase, but below the analysts' average expectation of DKK 18 billion.
Novo Nordisk expects that sales growth in 2025, measured in local currency, will be between 13% and 21%, down from the previous expectation of 16% to 24%; the expected increase in operating profit for this year is projected to be between 16% and 24%, down from the previous expectation of 19% to 27%.
According to the agency, only a portion of Denmark's exports will be affected by trade tariffs, mainly because several large Danish companies have subsidiaries or production facilities in the United States. However, as economic growth in target markets slows, exports will also be impacted.
