Novo Nordisk showed 'extraordinary growth' but faces competitive weight loss market: Novasecta

I think it’s a great performance by Nova Nordisk, fully expected. I think it’s a very strong company. It’s interesting that they’ve raised their annual guidance a little bit, which is fine. And really there was no other expectation other than continued growth and substantial growth. This is extraordinary growth of 2025% and analysts now expecting it to continue. It is being billed as Europe’s NVIDIA for very good reasons as well. In terms of you are first in the race to a new and exciting technology, I mean obviously you’re not an NVIDIA expert as well, but you would have seen the oscillation sure of that share price as well. This stock has rallied from in the last five years almost to the day from 161 Danish kroner to nearly 900 Danish kroner as well. Do you have any thoughts on the market’s view of that growth story and the increased outlook compared with the share price performance? I think the growth story in pharmaceuticals, which is different in technology is you have this natural patent expiry, you do that have it less so for someone like NVIDIA now Nova Nordic has to keep innovating. That is the key and and I think although it’s great to look at wegovy and you know some aglitide the underlying molecule and see all the growth potential in that, they’re going to have to cope with more and more and more stuff in innovation to keep that machine rolling. So that’s the challenge I think for any pharma company as Pfizer has seen in making fantastic successes in COVID-19 and then falling off a Cliff because it couldn’t do it again quickly enough. So I think Nova has to just keep the R&D machine going. I’ve got a really ignorant but obvious question. How long does it keep a patent for? Because we talk about patent cliffs all the time. Just update me on my ignorance of how long this company can keep its its ownership of wugovi. I don’t know the exact number on on wugovi and and Smaglatite, but basically I know it starts from when you basically file the first patent which is usually in quite early stage development. So you don’t get you know that’s a 20 year thing, you don’t get all that 20 years. By the time you launch, you may only have 10 and also there’s going to be competitors here. I think just even the pattern Cliff is one thing, but essentially once you get competitors, this is attracting enormous number of competitors into this space and they’re going to come in in the next five years, you know, and there will be novel drugs that are slightly better, slightly different. So Nova will have to compete. Brilliant. And Sylvia’s been doing all the hard work on this one, John, and she’s got a question or two for you. Yeah, John, I’m interested to get your thoughts on these, these rumours from some US lawmakers about changing the pricing for some of these Novo Nordisk drugs. How much of a problem do you think this could be in the future for Novo Nordisk if indeed there is pressure here to bring down some of those prices. I think the pressure on prices and started out with the IRA and and all of the pressure on small molecules and now they’re trying to extend it essentially of course the the government is, is looking at the price of pharmaceuticals and and absolutely as taxpayers would expect them to do. I expect though that the effect is not going to be immediate. It’ll be a gradual thing. There’s a lot of money tied up in the whole healthcare system in the United States, which of course is driving most of the value. And and I think that will take time to evolve and and by the time those things start kicking in on prices, I would expect the pharmaceutical companies to have more innovative drugs and actually just keep growing. So I’m not seeing that as a massive headwind at the moment. Yeah, I mean John, we’ve also got the FDA approval of we go within as more than just weight management drug as well. If that improves insurance cover, I mean revenues are bound to increase as well. So the runway here is said to be even better for for for for Novo Nordisk. I think this is, this is the beauty of what Novo has done in in with Smeglitide, which is to start out in diabetes, to move it on to obesity and then to move on to cardiovascular. And they’ve taken the risk of phase three trials to go into cardiovascular as well. So the extension into lots of different indications gives it a lot of more runway and you can get extension of a value from that point of view. So they’re doing absolutely the right thing in actually building more value from that very strong molecule. Yeah, I mean over the last five years or so, just looking at numbers, net profit has been above 31% in the last five years. I mean that shows great consistency. But in order to keep that up, do they have to just stick to what they’re good at? Well, is it Is there going to come a time where they’ll probably need to then diversify a little bit more? They have stuck with what they’re good at for many years, and they’re good at is the diabetes and all the biology and all the mechanisms of actions. And I think, you know, fortune favours a prepared mind. They, you know, the obesity thing just came. Some people say, oh, well, they got lucky on obesity, as did Lily. Well, no, actually, they did a lot of work in research and development on that area. They deeply understood it and then basically they that enabled them to do more so. So I think that ability to constantly stick with what you’re good at and move into adjacent things because it’s adjacent, it’s the same molecule, it’s in an adjacent indication is great. The days of these mega mergers where you bolt on something completely different, I don’t think that’s Novo’s style.