Novo Nordisk shares jump over spectacular earnings

Novo Nordisk shares jump over spectacular earnings

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On Wednesday, Novo Nordisk (NVO) stock surged more than 3% as the Danish drugmaker provided a better-than-expected earnings estimate for 2022 despite missing fourth-quarter operational profit expectations.

In local currency, the world’s leading diabetic medicine manufacturer predicts revenue growth of 6% to 10% in 2022, with operating profit growth of 4% to 8%. However, increasing sales and distribution expenditures, as well as higher R&D spending, had a negative influence on the results.

Novo recorded an operating profit of 13.63 billion Danish crowns in the fourth quarter, up 16 percent from the same period last year but below the industry average of 14.36 billion. 

It may indicate a more normalised world with less regulations and COVID-19, which has resulted in higher marketing investment. However, sales for the fourth quarter came in at 38.3 billion crowns, exceeding analysts’ expectations of 37.9 billion crowns, thanks to sales of the new diabetes medicine Ozempic, which increased by 64 percent to 33.7 billion crowns in 2021.

Following its debut in the US market in June, Novo was swamped by demand for its Wegovy obesity medicine, which resulted in stock shortages.

In December, a contract manufacturer briefly paused supplies and manufacturing due to concerns with a good manufacturing practice.

Due to supply concerns, fourth-quarter obesity medicine sales fell short of analysts’ estimates, despite a 55 percent increase in sales. At 08:29 GMT, Novo Nordisk’s stock was up 3.5 percent.

Expecting a second successive rate hike from the Bank of England meeting on Thursday, the London Stock Exchange’s FTSE 100 gained on Wednesday, led by banks and mining sectors.

The blue-chip FTSE 100 index was up 0.7 percent, extending gains for the second day, while the regionally focused mid-cap index was up 0.8 percent, led by consumer discretionary firms.

Strong markets and increased fees from managing cash for wealthy clients helped Julius Baer surpass the billion mark on its bottom field for the first time in 2021.

In addition, the bank reported 19.6 billion francs in new client inflows for 2021, a 4.5 percent increase over the previous year.

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