Day: August 7, 2024

Novo Nordisk lowered its full year forecast as Wegovy sales fell below expectations. Still, it hasn’t wavered on plans to ramp up supply of the highly coveted weight loss drug.

The Danish pharmaceutical giant lowered its operating profit outlook for the year on Wednesday to 20% to 28% growth, down from 22% to 30% growth last quarter. The company reported that sales of Wegovy and Ozempic, its most popular weight loss-related drugs that have caused frenzied demand, came in below Wall Street estimates during the second fiscal quarter. 

Sales of Wegovy jumped 55% annually to 11.66 billion Danish kroner, which was also below the company’s projections of 13.54 billion kroner, according to the Wall Street Journal. 

The company’s stock, which surged over 360% since pre-pandemic days, slipped following Wednesday’s earnings report. 

CFO Karsten Munk Knudsen told Yahoo Finance that Wednesday’s report was just “a blip” and that the company is still scaling Wegovy “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. 

DIABETES-RELATED WEIGHT-LOSS DRUGS FACING SUPPLY ISSUES AMID VIRAL TREND

The Danish pharmaceutical giant said four of the five dose strengths (0.5 mg, 1 mg, 1.7 mg and 2.4 mg) are now available, and that it’s continuing to manage shipments of the starting dose of Wegovy, which is 0.25 mg, “to responsibly initiate patients on treatment.”

The company had been working to ramp up production capacity after being forced to limit the supply of certain dose strengths to wholesalers for distribution to retail pharmacies in May 2023 due to frenzied demand. 

Still, despite issues meeting demand, about 35,000 patients on average in the U.S. alone have been starting treatment with the medication per week to date, a spokesperson for the Danish pharmaceutical giant told FOX Business Wednesday.

That figure, slightly up from the average of 25,000 people starting the drug per week in May, underscores the ongoing demand for Wegovy, a blockbuster drug that’s significantly boosted profits for Novo, and subsequently ignited a fierce competition between rival drug manufacturers who have or are in the midst of developing their own versions like Eli Lily and Pfizer. 

Several telehealth companies like Ro and Hims and Hers Health, have also begun selling such drugs on their platforms in order to capitalize on the craze. 

WEIGHT-LOSS MEDICATION SHORTAGE CREATES MARKET FOR BOGUS DRUGS

Morgan Stanley estimated that as much as 9% of the U.S. population will be on the weight loss drugs by 2035, which is five times the number of people today. 

“Obesity drugs have proved to be a disruptor on a scale matched by few other pharmaceutical innovations,” Morgan Stanley Research wrote in April. “Their emergence, along with a change in the way that obesity and related illnesses are regarded and treated, has put the new class of drugs on a blockbuster path with no signs of letting up.

Morgan Stanley projected that the global market for obesity drugs will reach $105 billion in 2030 and could reach as high as $144 billion. 

Sales of branded obesity drugs were $6 billion in 2023.

“The obesity drug market is being driven by two key factors. The first is supply. Drugmakers have to keep pace with demand,” head of Morgan Stanley’s European Pharmaceuticals team Mark Purcell said.

Purcell added that major drugmakers are expected to spend more than $50 billion to shore up supply chains through 2028 as they look to use the drugs to treat a wider range of illnesses.

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“Demand for these medicines could be turbocharged if there’s broadening evidence that these drugs improve outcomes in the hundreds of obesity-related ailments,” Purcell said. 

The Food and Drug Administration (FDA) already approved Wegovy for use as a heart disease prevention medication in March. 

The injectable semaglutide — originally approved for weight loss for certain patients — is now also indicated to reduce the risk of cardiovascular death, heart attack and stroke in adults who have cardiovascular disease and are either overweight or obese. 

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White Castle is offering a deal that cuts the price of its burgers by more than 30%, becoming the latest fast-food chain to roll out a value option in an effort to lure back cash-strapped consumers.

The Ohio-based chain announced that, for a limited time, it is selling sacks of 10 cheese sliders for $7.99, which is less than 80 cents a piece. The last time customers could purchase a White Castle burger at that price was more than a dozen years ago, in 2011. 

White Castle noted that the 10-burger deal costs a dollar more, $8.99, in New York and New Jersey, though. Still, the company said, the shareable bag of sliders costs less than what most fast-food chains charge for an individual combo meal.

TO FIGHT INFLATION, MORE AMERICANS ARE USING DIGITAL COUPONS AND SCORING BIG SAVINGS

“Families everywhere are tired of almost needing a small loan when they go out for fast food, and we know these days our customers want to make every penny count,” White Castle Vice President Jamie Richardson said in a statement accompanying the press release on how the price cut is the restaurant’s way of fighting inflation.

Richardson told FOX Business in a separate statement, “As consumers everywhere are pinching pennies and making leftovers last longer, White Castle knows we need to give them what they crave — great food at a great price.”

JIMMY JOHN’S ENTERS VALUE MEAL WARS WITH $10 DEAL

White Castle joins a growing list of nationwide chains, including fast-food giants McDonald’s and Yum! Brands-owned Taco Bell, that have recently debuted value meals for their customers.

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The flurry of value meal deals at U.S. fast-food restaurants comes as many diners have been feeling the squeeze on their wallets. Some affected by inflation have pulled back on visiting fast-food restaurants and are choosing to eat at home instead.

FOX Business’ Aislinn Murphy contributed to this report.

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Up to 315 of discount retailer Big Lots’ locations could be on the chopping block and facing potential closure, a Securities & Exchange Commission (SEC) filing from Friday indicated.

The company disclosed in the filing that it had upped the number of permitted store closings to a maximum of 315 as part of late July amendments to a credit agreement and term loan facility. That marked a 165-store increase from the 150 closings previously permitted.

Other changes made “certain additional reports” to its lenders required for Big Lots, trimmed the credit agreement’s aggregate commitments by $100 million to $800 million and made the borrowing interest rate 50 basis points higher, according to the filing. 

Big Lots said it entered into the amendments “in connection to its previously disclosed intention to aggressively address underperforming stores.”

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There are over 1,300 locations of the discount retailer nationwide.

“Big Lots continues to provide incredible value and remarkable discoveries for our customers as we execute a clear plan to build a stronger business. These efforts include taking decisive actions to operate efficiently and reviewing our store footprint on an ongoing basis to make sure we’re best positioned to serve our customers and our business,” a Big Lots spokesperson told FOX Business. 

“While the majority of our stores are profitable, we have made the difficult decision to close certain underperforming stores. We are confident that the steps we are taking will best position the company for the future as we return to our roots, focus on owning the bargain space, and deliver unmistakable value to our customers.”

Big Lots had indicated earlier in the summer that this year had 35 to 40 closures and three openings expected. At the same time, it flagged “substantial doubt about the Company’s ability to continue” amid an inflation-related pullback in its shoppers’ spending, as previously reported by FOX Business.

HOME GOODS RETAILER CONN’S FILES FOR BANKRUPTCY, TO CLOSE OVER 70 STORES

“We remain focused on managing through the current economic cycle by controlling the controllables,” Big Lots CEO Bruce Thorn said in the first-quarter earnings release. “As we move forward we’re taking aggressive actions to drive positive comp sales growth in the latter part of the year and into 2025, and to maintain year-over-year gross margin rate improvements, all driven by progress on our five key actions.”

It has identified its “five key actions” as “to own bargains, to communicate unmistakable value, to increase store relevance, to win customers for life with our omnichannel efforts, and to drive productivity.”

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Shares in Big Lots posted an over 21% increase on Wednesday but remained down nearly 86.5% from the start of the year.

Pilar Arias contributed to this report.

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