Q3 beat; robust momentum should continue in the medium-term

The Q3 results exceeded expectations backed by a strong showing from the diabetes and obesity offerings. The uptake of the weight-loss drugs is such that production hasn’t been able to keep up with the surging demand, and, therefore, the management guided for restricted supplies in the near-term. Meanwhile, Novo maintained the full-year outlook that was upgraded in October 2023. Overall, the robust growth prospects for the targeted areas (especially obesity), a healthy pipeline and a strong bala

Strong Q2; guidance ‘again’ upgraded

The Q2 23 results were driven by robust momentum for the firm’s GLP-1 diabetes drugs and obesity portfolio. While the management again upgraded the 2023 guidance, the markets seemed disappointed with the continued restrictions on the Wegovy supply. Overall, despite the stellar growth prospects and laudable operating performance, we remain cautious in terms of our recommendation, as Novo trades at expensive valuations on the back of the obesity market frenzy.

Good Q1, but markets have too high expectations

Q1 beat was largely driven by FX tailwinds as quarterly sales and operating profit CER growth were already provided during April 2023’s guidance upgrade. While GLP-1 and obesity drugs continued their stellar momentum, markets were probably spooked by another temporary supply reduction guidance for Wegovy and/or Eli Lilly’s progress on Alzheimer’s which could increase expectations for Novo to deliver in that area. Overall, despite robust growth prospects and operational excellence, Novo remains p

Issues at Catalent worth keeping an eye on

Catalent, Novo’s main contract manufacturer for its hyped obesity drug Wegovy, is facing productivity issues at three of its manufacturing plants. While this is the same company that faced issues in late-2021, leading to limited Wegovy supplies for most of 2022, this time it is unclear if Wegovy’s production is likely to be impacted. Nonetheless, it is worth tracking this development since any adverse news flow could prompt an abrupt reaction from the Novo share price.

Hardman & Co Monthly: April 2023

Feature article: 2022 Pharma Statistics - 8.7% growth – but worrying signs An efficient reporting system has seen all the listed multinational pharmaceutical companies announcing results for 2022, which has given us the opportunity to update our industry statistics and drug database. This report provides the first snapshot of the global and US rankings of the top 20 drug companies for 2022. 2022 was characterised by 8.7% underlying growth, offset by a large forex impact (-12%), due to USD stren

Novo Nordisk A/S.: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)

Novo Nordisk produced a double-digit operational profit and strong revenue growth, driven by excellent commercial execution in their therapy areas and critical countries. The company delivered an all-around beat as North America experienced particularly high sales growth due to the increased number of patients seeking their GLP-1 medications for diabetes and obesity. In all of their therapeutic categories, they have observed positive trial readouts. They also started the first two Phase I trials

Yet another strong quarter + healthy guidance, but remains expensive

Q4 sales again exceeded expectations, driven by GLP-1 products and obesity care offerings, which overshadowed insulins’ weakness. With all doses for Wegovy available from December 2022 onwards, obesity care should get a further impetus. For 2023, strong growth and higher capex, to meet increasing demand, are guided by management. Overall, despite being a quality stock, Novo seems expensive, especially given the looming competitive risks and interest rate hikes (possibly) nearing a peak resulting

The fattish obesity opportunity!

While diabetes has been Novo’s traditional stronghold, the firm is also the front-runner to grab a big share of the rapidly-growing obesity market. A combination of changing market dynamics, including patient perspectives and innovation, has created a big obesity market opportunity, which could be worth $50bn by 2030. While Novo is likely to face competition from Eli Lilly, both firms have a clear first mover advantage. Overall, despite its expensive price tag (2022 PE of 33x), the firm’s invest

Novo Nordisk ADR: Initiation of Coverage – The Forma Therapeutics Acquisition & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (11/22)

This is our first report on global diabetes care giant, Novo Nordisk. The Danish company has performed decently in 2022 so far and its sales increased by 16% in the first half of this year, with North America accounting for most of that gain. However, it failed to meet revenue and earnings expectations of Wall Street in the last result. Spending on research and development has increased by 26%, which is mostly due to the efforts that the team is making in order to diversify and grow our pipeline

Q3 beat + full-year guidance raised ‘again’

Novo’s quarterly results again topped expectations, driven by robust momentum for GLP-1 and obesity. Consequently, the 2022 guidance was upgraded. Overall, while the firm remains on a strong footing underpinned by its dominance in diabetes, sustained growth for focus areas and a healthy balance sheet – leaving room for (inorganic) growth/diversification opportunities – we maintain our cautious stance mainly because of the stock’s expensive valuation (2022 PE of 33x). There is limited scope for m

Wegovy’s supply + brewing competition concerns overshadow a decent Q2

In Q2, Novo continued its strong run, driven by strong growth momentum seen in both Obesity and GLP-1 Diabetes franchise. However, emerging and potential competition from Eli Lilly’s Mounjaro in Diabetes and Obesity, respectively, and Wegovy’s run of supply scars made investors jittery. Moreover, the group’s ever-expensive valuations and lack of sizable progress beyond diabetes are some of the other key reasons for a cautious stance on the Danish pharma giant.

Strong start to the year; but watch-out for brewing competition in obesity

Novo started the year on an impressive note, with growth again driven by the ever-growing GLP-1 diabetes franchise, and strong uptake for Wegovy. Moreover, sound progress on the pipeline front was encouraging. Having said that, Novo’s leadership in the obesity market is likely to be challenged by Eli Lilly’s upcoming drug Tirzepatide, which has shown much better results than Wegovy in clinical trials. The group’s enduringly-expensive valuation is an added impediment to our turning positive on th

Takeaways from 2022 Capital Markets Day

Novo has shared an encouraging CMD update, supporting healthy growth across focus areas. This is particularly true for Wegovy (new obesity drug), where Novo is confident of resolving supply issues by Q2 22. While on-track development of pipeline programmes outside diabetes was the icing on the cake, it is unlikely to result in near-term operating gains. Overall, our estimates should reset higher, but the cautious stance – citing a high valuation and no major near-term readouts – should be mainta

Strong finish to 2021; but 2022 moderation lies ahead

Novo finished 2021 on a strong note, with growth again driven by the healthily-growing GLP-1 diabetes franchise, and strong launch for the obesity drug, i.e. Wegovy. However, euphoric gains of 2021 are unlikely to be repeated in 2022 due to issues such as supply challenges for Wegovy and further price pressure expected for insulins. Moreover, the group’s ever-expensive valuation and increasingly maturing diabetes markets (leaving limited scope to sustain the exceptional results), our cautious st

GLP-1 portfolio powers another strong performance

Novo Nordisk reported strong Q3 results, with growth again driven by the GLP-1 diabetes portfolio and launch euphoria for Wegovy (obesity drug). Interestingly, management upgraded its 2021 guidance for the third straight quarter. While the group continues to make sound progress in the diabetes market, with its ever-increasing global market share, lack of immediate growth catalysts beyond the largely mature diabetes market is a key impediment. Hence, our recommendation remains cautious.

Warpaint London+ (W7L, House Stock at 470p) - Outstanding FY23A - Upgrades!

Shield Therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Cambridge Nutritional Sciences - Operational efficiencies; adjusted EBITDA profi

Cambridge Nutritional Sciences (CNS) has provided a trading update for the 12 months to 31 March 2024, noting that a combination of strong sales growth and significant margin improvements, driven by operational efficiencies, have played key factors in the group’s expectation of being adjusted EBITDA positive in FY 2024. Revenues are expected to be £9.8m (30% YoY growth), ahead of our £9.0m forecast, with gross profits expected to exceed £6m, which is again ahead of our year-end forecast of £5.6m

Creo Medical Group - Speedboat savings validated

An official NHS Supply Chain case study has quantified the savings made by an NHS Trust from adopting Creo Medical’s Speedboat device to perform Speedboat Submucosal Dissection (SSD) in comparison to surgical alternatives. In total, the net cash saving from 130 SSD procedures for the NHS Trust was calculated at £687k, including savings from reduced length of hospital stay and reduced theatre costs. Notably, these savings did not include the patient and financial benefits associated with reduced

Morning Note – 24 April 2024

Destiny Pharma plc+ (DEST, House Stock at 22p) - All eyes on XF-73

Warpaint London+ (W7L, House Stock at 375p) - Trading ahead of expectations - +10% upgrade implied

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Cambridge Nutritional Sciences - H1 2024 interims: Executing a newly focussed st

Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We

e-therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Venture Life Group - Strong organic growth; focus on EBITDA

Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x. Management have focused on growth with three therapy areas generating double-digit revenue growth and onli

Futura Medical: Eroxon poised for launch in key US market

Futura Medical’s investment case has shifted firmly onto commercial execution. The highly successful initial launches of Eroxon, its novel topical gel for ED (erectile dysfunction), by partner Cooper Consumer Health in the UK and Belgium are now being followed by roll-outs across the major European markets. The much-anticipated launch in the commercially important US market by consumer healthcare giant Haleon is expected before February 2025. Launches in Other Regions are anticipated throughout

Warpaint London (W7L, House Stock, 196p) - Strong foundation, even stronger upgrade momentum

Morning Note – 8 April 2024