By Nikolaj Skydsgaard

COPENHAGEN, (Reuters) – Shares of Novo Nordisk (NYSE) rose by more than 3% Wednesday as the Danish drug-developer delivered a better-than expected earnings outlook for 2022 despite not meeting fourth quarter operating profits expectations.

This is the world’s biggest diabetes drug manufacturer. It expects to grow sales by 6% to 10% in local currency in 2022, and to increase operating profits of 4% to 8.

Sydbank Analyst Soren Lontoft said to Reuters: “This reflects an underlying positive growth momentum Novo Nordisk,” adding that he’d be revising his estimates.

Jefferies analysts stated that Novo’s operating profit forecast was lower than anticipated due to less margin pressure.

Novo recorded a fourth quarter operating profit in the amount of 13.63 Billion Danish crowns (or $2.06 billion). This is an increase of 16% compared to last year. However, it was below the 14.36 billion average predicted by Refinitiv’s analysts.

Lontoft explained that the result had been affected by higher distribution and sales costs, in addition to increased research-and-development spending.

He said, “It may reflect perhaps a less restricted world and increasing lack of COVID-19. This has led to higher marketing spending.”

The fourth quarter sales were at 38.3 Billion Crowns. That’s higher than the analysts’ estimate of 37.9 Billion.

SUPPLY ISSUES TO BE OVERCOMED

Novo became overwhelmed in the wake of its Wegovy weight loss drug’s release to the U.S. Market in June. This led to severe shortages.

After concerns about good manufacturing practices, a contract manufacturer temporarily stopped delivery and manufacturing in December

On Wednesday, Chief Executive Lars Joergensen stated that “since December, we’ve worked hard to optimize our internal capacities.”

Joergensen stated, “Consequently, now we expect that internal capability in the first six months of 2022 will close to the demand at around 20,000 weekly totalscripts as seen in U.S. Market at the beginning of 2021,”

Fourth quarter sales of obesity drugs fell short of analysts’ expectations, despite 55% growth.

At 0829 GMT, shares in Novo Nordisk rose 3.5%

($1 = 6.6023 Danish crowns)