(Bloomberg) -- Novo Nordisk A/S forecast earnings will rise this year to record levels, boosted by soaring demand for its Wegovy obesity drug.

The Danish drugmaker expects operating profit to rise by as much as 19% at constant exchange rates in 2023. Novo Nordisk is also doubling spending on plants and equipment for a second year to boost production as it expects periodic shortages of drugs in some markets. The stock rose as much as 3% to a record.

Wegovy is flying off the shelves as patients seek the first new obesity medicine to reach the market in years, spurred by use by Hollywood actors as well as Elon Musk. The weekly injection dampens patients’ appetites and helps overweight people to lose about 15% of their body weight, studies have shown.

The jump in demand for Wegovy turned Novo Nordisk into Europe’s biggest drugmaker by market value last year, leapfrogging Roche AG and Novartis AG. Demand has been so strong that Novo has been struggling to supply the US and had to delay its entry into most European markets.

“We are just getting going on obesity,” Chief Executive Officer Lars Fruergaard Jorgensen said in a Bloomberg TV interview. “It’s basically a completely new market.”

Patients desperate to try the drug have also been relying on off-label prescriptions of Novo’s Ozempic diabetes treatment, which led to shortages for diabetics last year in the US. The treatments are the same drug, but at different doses.

Burgeoning Blockbuster

Wegovy sales more than quadrupled to 6.2 billion Danish kroner ($900 million) last year, beating analysts’ estimates. 

Novo holds a 94% share of the US branded obesity prescription drug market after launching Wegovy in that market in mid-2021. Last year however Wegovy was waylaid by shortages, which delayed launches across Europe. Novo was however able to boost production enough to resupply all dosages of Wegovy in the US at the end of last year.

“We believe we can meet demand in the future, but we also have to accept there will be a few periods with stock-outs,” CEO Fruergaard Jorgensen told reporters.

Ozempic is back in supply in the US, but there are shortages in some other markets, the drugmaker said.

Novo is planning a gradual rollout of Wegovy worldwide, starting in Europe. It has introduced the treatment recently in Norway and Denmark, where patients need to pay for the drug themselves since it’s not covered by insurance. The UK is also on the list, CEO Fruergaard Jorgensen said in a TV interview, declining to give a date.

Other markets in Europe may also require patients to pay for it themselves, though Novo will try to convince countries to cover it, at least in people with co-morbidities or high body mass, executives said on a call with reporters.

The company is also benefiting from sustained momentum for Ozempic and Rybelsus, drugs known as GLP-1s that help diabetics keep blood sugar levels in check.

Novo forecast total sales will gain between 13% and 19% this year. The range is bigger than normal because of the possible supply disruptions, analysts said.


--With assistance from Francine Lacqua.

(Updates with CEO comments starting in fifth paragraph)

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