Wegovy, the popular weight-loss injection, has exceeded market predictions, resulting in a notable increase in the stock price of Novo Nordisk, the Danish pharmaceutical firm responsible for this obesity management solution.

The sales of Wegovy skyrocketed to 17.3 billion Danish krone (£1.96 billion) during the third quarter, up from 9.6 billion krone in the same period last year, surpassing analysts’ estimates. Additionally, sales from Novo Nordisk’s diabetes treatment, Ozempic, rose by 26 percent year-over-year at constant currency, bringing in 29.8 billion krone.

Novo Nordisk has faced challenges due to demand exceeding supply since Wegovy’s market introduction in 2021, compounded by pressure from U.S. lawmakers to lower prices. Such factors, along with rising production costs and competition from Eli Lilly, the largest pharmaceutical company globally, have caused Novo Nordisk’s stock to decline from its peak values that previously positioned it as Europe’s most valuable public entity last year.

In contrast, Eli Lilly fell short of Wall Street’s forecasts last week with its third-quarter results, citing increased manufacturing costs and fluctuations in wholesale levels for Zepbound, its competing anti-obesity product, which led to a dip in its stock price in New York.

Following the stronger-than-expected Wegovy sales results and a revision in its annual earnings forecast, shares of Novo Nordisk rose approximately 9 percent in Copenhagen before settling at a gain of 4 krone, or 0.6 percent, closing at 749½ krone.

Both Novo Nordisk and Eli Lilly are at the forefront of the burgeoning weight-loss medication market, which analysts project could reach roughly $150 billion by the end of this decade. This advancement in treatment options has come in the form of GLP-1 therapies—glucagon-like peptide-1 receptor agonists—that activate specific receptors in the digestive system to curb appetite.

Lars Fruergaard Jorgensen, CEO of Novo Nordisk, remarked, “We are pleased with the performance in the first nine months of 2024. The growth in sales is a result of rising demand for our GLP-1-based diabetes and obesity treatments, allowing us to serve more patients than ever before.”

During a recent congressional hearing, Jorgensen acknowledged there remains a significant patient demand that both Novo Nordisk and Eli Lilly are struggling to meet, even after Novo Nordisk increased Wegovy production threefold over the past three years. The company plans to maintain this pace of production growth.

This past February, Novo Nordisk reached an agreement to acquire three production facilities for $11 billion from Catalent, an American contract manufacturing firm. Jorgensen confirmed this agreement is expected to finalize within this year. He also mentioned that restrictions on Wegovy prescriptions in the United States would soon be lifted, attributing the slowdown in prescriptions to the lower initial doses being distributed in the market.

The heightened demand has led to pharmacies issuing compounded versions of the branded drug, raising concerns among industry leaders. Novo Nordisk noted it is aware of ten fatalities and 100 hospitalizations linked to this issue.

In addition to focusing on increasing supply and expanding its international presence—Wegovy was rolled out in the UK last September with a “controlled and limited” launch—Novo Nordisk is actively developing next-generation treatments, as other pharmaceutical companies such as AstraZeneca aim to keep pace.

Anticipated results from a phase III trial of CagriSema, a new injectable combination treatment, are expected by the end of this year. Early trial side effects have been comparable to those of existing GLP-1 products, and CagriSema is forecasted to achieve improved weight loss results of up to 25 percent, in contrast to 15 percent for Wegovy.

Analysts from Quilter Cheviot indicated that Novo Nordisk’s sales success in the third quarter was primarily fueled by growth outside the US, having launched in over 15 countries, benefiting from pre-launch stocking in various markets.

Novo Nordisk anticipates sales growth between 23 percent and 27 percent this year, refining its earlier projection range of 22 percent to 28 percent.