Novo Nordisk stock forged ahead to another new high Thursday after the Danish drugmaker raised its first-quarter and full-year expectations, citing its diabetes and obesity treatments.
During the first three months of 2023, the company says sales grew 25% and operating profit surged 28%, excluding the impact of exchange rates. In response, the company boosted its full-year outlook. Novo now expects 24%-30% sales growth and a 28%-34% increase in operating profit this year.
On the stock market today, Novo Nordisk stock popped 2.5%, ending the regular session at 167.64. That pushed shares to another record high.
Novo Nordisk Stock And Obesity Treatments
Enthusiasm for Novo's diabetes and obesity treatments are driving Novo Nordisk stock to new highs. The company makes weight-loss drugs known as Wegovy and Saxenda. One of its diabetes treatments, Ozempic, has also gained a following for its weight-loss capabilities.
Novo cited Wegovy prescription trends in the first quarter for the boosted outlook. The company now expects higher sales of the obesity treatment in the U.S. this year as it comes back from shortage. To help contend with increased demand, Novo signed on a second contract manufacturer.
Bullishly for Novo Nordisk stock, the updated outlook also includes higher full-year expectations for Ozempic. Wegovy and Ozempic both use the same active ingredient, semaglutide. Semaglutide works by activating a hormone called glucagon-like peptide 1, or GLP-1. This helps control hunger signals in the brain and slow how fast the stomach empties.
Drugs that target GLP-1 — alone or in combination with another mechanism — have gained notoriety this year. Eli Lilly, Amgen and Viking Therapeutics are also working on obesity treatments that target GLP-1 as part of a combination.
Highly Rated Pharmaceutical Stock
But Novo remains alone on the market with approved obesity treatments.
Today, Novo Nordisk stock has a strong Relative Strength Rating of 95, putting shares in the top 5% of all stocks when it comes to 12-month performance, according to IBD Digital. Shares also have a matching Composite Rating of 95, which tracks fundamental and technical measures.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
