5. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Investors: 60
Denmark-based Novo Nordisk A/S (NYSE:NVO) is a renowned healthcare company that was established in 1923. Its mission is to create change in the fight against major chronic illnesses, drawing on its diabetes legacy. Novo accomplishes this by leading the way in scientific discoveries, increasing accessibility to medications, and pursuing the prevention and eventual treatment of illness. Novo Nordisk promotes its products in around 170 countries and employs roughly 66,000 people across 80 countries. Producing about half of the world’s supply of insulin, the company is a leader in the treatment of diabetes and played a significant role in the development of insulin pens.
FDA- approved Ozempic and Wegovy, two of Novo Nordisk A/S (NYSE:NVO)’s diabetic and obesity medications, are becoming increasingly popular, which is a major driver for company’s top line. Originally developed as a diabetic treatment, Ozempic has drawn attention for its ability to help people lose weight. As of 2023, it accounted for 41% of Novo Nordisk’s sales. Wegovy, on the other hand, was created especially for weight control, contributing an additional 13.5%, highlighting their market influence and room to develop.
Novo Nordisk has received a license to begin marketing its blockbuster weight-loss treatment Wegovy in China, allowing the Danish pharmaceutical company to increase sales of the medicine that has propelled it to be one of the Europe’s most valuable companies. The license from China’s National Medical Products Administration would allow Novo Nordisk to begin marketing its injectable weight-loss drug in the world’s second-largest economy, with a population of over 1.4 billion people, according to United Nations figures. Considering that more than 11.2% of Chinese individuals have diabetes, this is noteworthy.
After growing by 42% at constant currency rates (CER) in 2023, the company’s diabetes and obesity care division expanded by 27% in Q1 2024. Ozempic and Wegovy are in high demand on the market, which is fueling this expansion.
Novo Nordisk raised its full-year forecast, estimating that at the midpoint of its guidance range, operating profit would expand by 26% and sales would rise by 23%. In 2023, the company’s EBIT margin was 44.1%, far greater than that of its competitors.
Novo Nordisk A/S (NYSE:NVO) is one of the best GLP-1 and weight loss stocks to buy now. Analysts hold a consensus Strong Buy rating on the stock. In Q1 2024, 60 funds owned NVO stock. Simon Wang’s Franchise Capital is the largest stakeholder in the company, with 136,172 shares worth $19.44 million.
Novo Nordisk is to construct a new $4.1 billion facility in Clayton, North Carolina, to accommodate the soaring demand for Wegovy. However, concerns have been raised regarding possible side effects, such as blindness, which affects 7-9% of Ozempic and Wegovy users compared to 0.8-1.8% for other drugs.
Despite these concerns and competition, Novo Nordisk is in a good position to expand in the future. The stock is a buy due to its positive financial outlook, strategic ambitions, and strong historical performance. Its position as a top healthcare company is cemented by its disruption of the diet industry and ongoing innovation in the treatment of diabetes.
