Why Novo Nordisk Stock Is Soaring Today

Shares of Novo Nordisk (NYSE: NVO) were moving higher on Wednesday. The company's stock gained 4.9% as of 1:50 p.m. ET, but gained as much as 5.8% earlier in the day. The leg up comes as the S&P 500 (SNPINDEX: ^GSPC) gained 0.2%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 0.1% on the day.

The numbers

The pharmaceutical giant and maker of Ozempic and Wegovy reported better-than-expected numbers Wednesday morning. The drugmaker delivered 25% year-over-year (YOY) revenue growth, with 2024 sales coming in at $40.5 billion. That exceeded Wall Street's target of $39.5 billion. For Q4, the company reported $11.6 billion in sales -- up 30% YOY -- beating the expected $11.2 billion.

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The strong performance was driven by the company's pair of semaglutide drugs, Wegovy and Ozempic. Of the full year's total sales of $40.5 billion, the two were responsible for $24.9 billion. Novo is leading the GLP-1 contest with 52% of the market share, outperforming key rivals like Eli Lilly.

However, as the company struggles to keep up with demand, it is taking on debt to bolster its manufacturing, which could eat into margins.

A key moment is coming

GLP-1 drugs like Ozempic require injections, severely limiting their adoption. While Novo Nordisk owns the market for now, a pill-based GLP-1 would be a game changer. The company is in a race with Eli Lilly to be first to market in the U.S. Whichever company does so could shift the balance of power significantly.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.