Novo Nordisk (NVO) stock slid Wednesday morning after the company lowered its operating profit outlook for the year. Manufacturing constraints and increased competition continue to weigh on the company.

Novo reported total revenues of $9.9 billion for the quarter, an increase of 25% year over year, in line with analyst expectations. Operating profit for 2024, meanwhile, is now expected to be between 20% and 28%, down from 22% to 30% announced last quarter.

But the company projected strong sales for the year, between 22 % and 28% and up from 19% to 27% last quarter.

The sales outlook reflects ongoing demand for the company's top-selling GLP-1 products, diabetes drug Ozempic and weight-loss drug Wegovy.

Sales of Ozempic were up 31% year over year, coming in at $4.2 billion, or over half of the $7.4 billion of total diabetes care sales. Wegovy sales, meanwhile, were up 55%, coming in at $1.7 billion, or a majority of the $2 billion in sales for the obesity portfolio. Wegovy sales missed analyst estimates of over $2 billion.

CFO Karsten Munk Knudsen told Yahoo Finance he considers the miss in the quarter "a blip" and that the trend lines for the company are on track.

"We are scaling Wegovy, as we speak, already significantly. We have doubled the number of doses we are supplying into the market from the beginning of the year. We have now launched in 12 markets outside North America," Knudsen said.

Still, the company also reported another Wegovy concern, delaying filing for label expansion for Wegovy as a treatment for a certain type of heart failure until early next year.

"It does not have any material impact. We had a dialogue with the FDA, and based on that dialogue we have decided to pull our filing in order to have additional data," Knudsen said.

Pricing pressure

Novo has found itself facing political pressure in the US over the company's pricing — Sen. Bernie Sanders (I-Vt.), as chair of the Senate Committee on Health, Education, Labor, and Pensions, is gearing up to grill Novo's CEO next month. And North Carolina has attempted to cut off GLP-1 access for state workers in hopes of pressuring the company to lower prices.

North Carolina recently suggested the US Health and Human Services Department (HHS) get both Novo and competitor Eli Lilly (LLY), maker of weight-loss drug Mounjaro, to license their products in hopes of providing more affordable alternatives.

"We are not interested in licensing," Knudsen told Yahoo Finance.

"And even if we did, the time to construct any alternative measures would not be faster than what we are doing in terms of constructing additional capacity so we do not believe that is an appropriate way forward," he added.

Both market leaders Novo and Lilly are already facing alternatives in the market through compounding pharmacies, which are legally allowed to provide doses that are on the FDA's shortage list. Both have aggressively gone after clinics and spas that offer these alternatives.

And both are working feverishly to increase production and pull the products off the shortage list. The FDA recently took both Eli Lilly's drugs off the shortage list.

The ending of the shortage is also evident in prescription data, where Lilly's products are increasing their market share, according to analyst notes from JPMorgan.

Mounjaro prescriptions have increased 70% year over year in the quarter and account for 30% of the market compared to Ozempic's 24% rise in the same period. Ozempic accounts for 48% of the market, down just slightly from July when it was at 49%, according to JPM.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.

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