Novo Nordisk - ADR

Top-line / margins: sales down on CER; guidance now broadly “less bad” - Reported sales +32% to DKK 96.8bn in Q1, but adjusted sales -4% at CER due mainly to lower realized prices, partly offset by GLP-1 volume growth and market expansion. - Adjusted gross margin fell to 80.6% (from 83.5%) driven by lower realized prices, one-time costs, and negative currency, partially offset by mix (more GLP-1). - Adjusted operating profit -6% at CER (lower sales/gross profit plus ongoing investment in R&D & commercial launches). - 2026 outlook (key investor metric): adjusted sales expected -4% to -12% at CER (range improved vs prior expectation per commentary), and adjusted operating profit growth -4% to -12% at CER. - Why guidance improved: increased expectations for GLP-1 product sales, plus “more confidence” after Q1 in oral scripts, Wegovy 7.2mg uptake, and launch/competition/LOE visibility.

Obesity momentum is real, but competition/pricing & policy pressures remain major headwinds - Q1 obesity: obesity care sales +22% overall, driven by International +44% and U.S. +9% (U.S. and diabetes still pressured). - Q1 diabetes GLP-1 sales -11%, “mainly U.S.”—reflecting competition and price/coverage pressures. - U.S. operations Q1: -11% (partly offset by International +6%). - U.S. 2026 headwinds explicitly flagged in guidance: - Intensifying competition in injectable GLP-1 - Medicaid coverage reduction (negative for obesity meds) - Further lower realized prices expected from market access investments including Most-Favored-Nations agreement impact.

Wegovy pill launch: fast uptake, “sweet spot” pricing, and accelerating category definition (big upside) - Wegovy pill is positioned as the only oral peptide for obesity and also has MACE reduction indication in obesity/cardiovascular risk reduction context (per call). - Since U.S. launch (~16 weeks): - >2 million TRx and >1 million people treated - Q1 TRx: 1.3 million - Latest weekly prescriptions: 207k (week ending Apr 17) - ~80% of users are GLP-1 treatment-naïve, suggesting new-to-category growth rather than only cannibalization - Limited cannibalization from injectable Wegovy noted. - Titration/usage early signals: titration described as “as expected”; uptake continues week-over-week toward higher doses. - Pricing stance: management says current pricing is the “sweet spot” for now; dynamic pricing may differ at much larger scale in future. - Unexpected/important nuance: despite being “oral,” early uptake is heavily self-pay initially; PBM formulary adoption at parity for all major PBMs by end of Q1 is expected to change the reimbursed/self-pay mix over time (could affect margin and growth mix).