Rite Aid Corp. said Thursday that its fiscal first-quarter pharmacy sales got a boost from a new class of drug.
Pharmacy sales, which rose 3.4% from a year ago, were boosted by higher sales of Ozempic and other GLP-1 receptor agonists, which are used to treat Type 2 diabetes and obesity.
The higher sales did not translate into profit, however.
“As the cost of these drugs is also high, the impact of the increase in volume of these drugs on our gross profit dollars is minimal,” Rite Aid Chief Financial Officer Matthew Schroeder told analysts on the company’s earnings call, according to a FactSet transcript.
Still, the company
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cheered investors by raising its full-year revenue guidance due to the sales bump from Ozempic and other high-dollar GLP-1 drugs. It now expects revenue of $22.6 billion to $23 billion, ahead of the FactSet consensus of $22.3 billion.
Ozempic, Wegovy and Rybelsus, which are made by Novo Nordisk
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and Mounjaro, which is made by Eli Lilly & Co.
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have become so popular in the U.S. that supplies have at times run short and the U.S. Food and Drug Administration has been forced to warn patients against using knockoff versions.
The drugs are administered by injection and mimic the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.
Ozempic, Rybelsus and Mounjaro have been approved by the Food and Drug Administration for treatment of Type 2 diabetes, while Wegovy is approved for people with obesity and for certain people with excess weight combined with weight-related medical problems.
Last year, more than 5 million prescriptions for Ozempic, Mounjaro, Rybelsus or Wegovy were written for weight management, up from 230,000 in 2019, according to data and analytics firm Komodo Health.
Obesity drugs could be a $54 billion market by 2030, up from $2.4 billion in 2022, Morgan Stanley said in a report last year. Reports of people who take GLP-1 drugs seeing improvements in addictive behaviors such as smoking and drinking have lately amplified interest in the medications.
For more, read: The dark side of the weight-loss-drug craze: eating disorders, medication shortages, dangerous knockoffs
Drug companies, including Lilly and Pfizer Inc.
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are now working to develop treatments in the form of pills that could be more convenient alternatives to the injectables.
See now: Weight-loss drugs in development aim to replace injections with pills
Rite Aid’s overall numbers surprised on the upside, as its loss was narrower than expected and revenue beat the consensus estimate.
For more, see: Rite Aid’s stock soars 7.5% after company surprises with earnings that are less bad than feared
Eleanor Laise contributed.