By Josh Nathan-Kazis

When Danish drugmaker Novo Nordisk reports its quarterly financial results on Wednesday, investors will be looking for reassurance the GLP-1 market is still on track for the enormous growth Wall Street expects.

Novo shares have taken a beating in recent months, with the stock's American depositary receipts falling nearly 40% in the last six months of 2024. Shares first slid on growing worries that sales of its weight loss drug Wegovy and its Type 2 diabetes drug Ozempic wouldn't live up to the hype, and then on very disappointing trial data.

A positive pipeline update in January wasn't enough to reverse the momentum, and the ADRs were down roughly 30% over the past 12 months as of Tuesday.

Novo's Wegovy and Ozempic are among the most consequential, closely watched new medications in recent history, but they face serious competition from Eli Lilly's Zepbound and Mounjaro, and from legal copycats manufactured by compounding pharmacies and sold by telehealth firms.

While the compounders will soon be barred from selling knockoffs of the Lilly drugs, Novo's drugs remain in shortage, and can legally be copied.

Analysts expect Novo to report fourth-quarter sales of 80.1 billion Danish Krone, or $11.1 billion, on Wednesday, and earnings of 5.98 DKK per share, or $0.83, according to FactSet.

Investors will be paying particularly close attention to Wegovy and Ozempic sales for the quarter. Current FactSet consensus estimates put Wegovy sales at 20 billion DKK, or $2.8 billion, for the quarter, and Ozempic sales at 33 billion DKK, or $4.6 billion.

Investors will also be looking for updates on supply of the two medicines. Novo in December closed an $11 billion deal to ramp up its supply of GLP-1 medicines, though it could take time for the results of that deal to be felt in the market.

"If we redirect everything that we have of GLP-1 to the U.S. we will be immediately out of the drug shortage situation," Henrik Wulff, executive vice president for product supply, quality, and information technology at Novo, told Barron's in December. But Novo serves markets worldwide.

"We try to balance these launches up against the in-market demands, and try to guesstimate how we can get out of the drug shortages," he said.

Shares of Novo have yet to recover from a startling update in late December on CagriSema, a next-generation weight-loss drug. Novo had said it expected patients to lose at least 25% of their body weight on CagriSema, but in a Phase 3 trial patients only lost 22.7%.

In January, Novo unveiled early results on another weight loss drug, amycretin, which appeared very promising, though the drug has years of studies ahead of it before it can make it to market.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 04, 2025 16:30 ET (21:30 GMT)

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