2 Important Insights From Novo Nordisk's Earnings Call

Pharmaceutical giant Novo Nordisk (NYSE: NVO) released its fourth-quarter and full-year earnings report on Feb. 5. The Denmark-based company performed pretty well, leading to a post-earnings jump in its stock price.

Though Novo Nordisk's financial performance was strong, it's worth pointing out several other things management mentioned during its earnings conference call with analysts. Here are two important insights from that call that should excite investors about Novo Nordisk's future.

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The runaway leader in the GLP-1 market

Novo Nordisk's work in the GLP-1 space has been instrumental to its success in recent years. The company's famous medicines, diabetes treatment Ozempic and anti-obesity medicine Wegovy, have been on fire.

However, some investors are worried that Novo Nordisk will lose significant market share to its longtime rival, Eli Lilly, in the GLP-1 market. Eli Lilly developed its own GLP-1 drugs, Mounjaro and Zepbound, which target diabetes and obesity, respectively. In one head-to-head study, Zepbound even proved superior to Wegovy in helping patients shed excess weight.

Despite the challenge from Eli Lilly, Novo Nordisk remains the runaway leader in this fast-growing space. As Novo Nordisk's CFO, Karsten Munk Knudsen, said during the earnings call:

We are serving almost two-thirds of the global GLP-1 market and then competition [is] sitting on the remaining one-third. Specifically for the last year, just to have hard data, we have expanded patient reach ... more in absolute numbers, more than any other competitor in this market.

Novo Nordisk's continued dominance in this field is why its financial results remain impressive. In 2024, the company's revenue grew by 25% year over year to 290.4 billion Danish kroner ($40.4 billion). Ozempic's sales came in at 120.3 billion DKK ($16.8 billion), 26% higher than in 2023. Wegovy's revenue jumped by 86% year over year to 58.2 billion DKK ($8.1 billion).

It's no wonder Novo Nordisk's shares jumped following the release of its fourth-quarter and full-year 2024 earnings report.

Key clinical milestones on the way

Even though Novo Nordisk is still leading the GLP-1 market, competition will become stronger in this space in the coming years. Many drugmakers are looking to dip their toes into this therapeutic area, as are many smaller biotech companies. Furthermore, Novo Nordisk derives a substantial portion of its revenue from its GLP-1 products; in 2024, Ozempic and Wegovy made up 61.5% of Novo Nordisk's total sales.

But the company also has a GLP-1 pipeline that's just as strong as that of any of its peers, if not stronger. Says Novo Nordisk's Martin Holst Lange, executive VP and head of clinical development:

We expect the first phase 3 results from CagriSema [in type 2 diabetes], as well as phase 2 results for both subcutaneous ... amycretin and [a] once-weekly GIP/GLP-1 co-agonist. Moving to obesity and the first half of '25, we are now expecting to submit ... semaglutide (25 milligrams) for people with obesity to the U.S. regulatory authorities in the first quarter.

So, Novo Nordisk has several investigational GLP-1 products across diabetes and obesity that will produce clinical trial results this year. Some of them have already produced promising data in other studies. CagriSema delivered a mean weight loss of 22.7% in a 68-week phase 3 study; even though that was short of the 25% mean weight loss that management was targeting, it beat Wegovy in the trial. A subcutaneous version of amycretin also performed well in a phase 1b/2a study.

Novo Nordisk seems to have a GLP-1 medicine development engine that grants it an edge against almost any other pharmaceutical company. It's a pioneer in this field and can lean on many successes -- and failures -- to continue pumping out promising products in this area. So, despite mounting competition, the Denmark-based drugmaker should remain a leader in GLP-1 drugs.

Why Novo Nordisk is a strong buy

Novo Nordisk has been looking to diversify its lineup in recent years, and is developing medicines in other fields. The company recently reported positive phase 3 results for Mim8 in patients with hemophilia. It has products across several other fields: Alzheimer's disease, Parkinson's disease, thalassemia, sickle cell disease, and more.

Its rich pipeline, a lineup that's still driving solid top-line growth, and long track record of innovation make Novo Nordisk a stock worth buying and holding onto for a while.

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Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.