LONDON, Aug 7 (Reuters) - Novo Nordisk on

Wednesday trimmed its full-year profit outlook after reporting

weaker-than-expected quarterly sales of its popular weight-loss

drug Wegovy, stirring worries among investors about stiffening

competition from Eli Lilly ( LLY ).

Operating profit in the quarter rose 8% at constant exchange

rates to 25.9 billion Danish crowns ($3.8 billion) compared with

the 27.3 billion crowns forecast by analysts in a LSEG poll.

The worse-than-expected second-quarter profit may deepen

investor worries that Novo's first-mover advantage in the

fast-growing obesity drug market is at risk as it races to

expand capacity to meet runaway demand.

Novo's Frankfurt-listed shares fell 3.2% just after

market opening.

The Danish company lowered its forecast for operating profit

growth this year to between 20% and 28% in local currencies,

compared to its previous forecast of 22% to 30%.

The company attributed a decline in gross margin in the

first half in part to costs related to its ongoing manufacturing

capacity expansions.

Sales of Wegovy, Novo's first-to-market weight-loss drug

rose 53% to 11.66 billion crowns, well below the 13.54 billion

crowns expected by analysts in a company-compiled consensus, but

up from sales of 9.4 billion crowns in the first quarter.

Nevertheless, it raised its sales growth outlook for this

year to between 22% and 28% in local currencies, compared to the

previously guided range for 19% to 27% growth.

"We are pleased with the sales growth in the first half of

2024, which has enabled us to raise the outlook for the full

year," CEO Lars Fruergaard Jorgensen said in a statement.

Some analysts forecast the obesity drug market could be

worth about $150 billion by the early 2030s.

Novo ended an advanced kidney disease trial in June, which

resulted in an impairment loss of 5.7 billion Danish crowns

($833.37 million), which the company said impacted operating

profit.

Investors are keen to hear more from Novo - Europe's most

valuable listed company worth about $550 billion - on Wednesday

about when it expects to significantly boost supplies of Wegovy

in the U.S. and end shortages, as rival Lilly swiftly builds

market share.

The company is spending billions of dollars to increase

production of Wegovy to meet runaway demand and fend off Lilly,

which launched its rival therapy Zepbound in the U.S. in

December last year.

Though Novo and Lilly are now going head-to-head with

their obesity treatments in a number of markets including

Britain and Germany, the most lucrative one by far is the U.S.,

where more than 70% of adults are obese or overweight.

The lowest out of five dose strengths of Wegovy is still in

shortage, according to the U.S. Food and Drug Administration

website, which was updated late on Tuesday to show that two more

dose strengths were now available.

On Friday, the FDA updated its website to say Lilly's

Zepbound was available, but the agency did not remove the drug

from its shortage list. It said in a statement it was working

with Lilly to confirm that supplies were stable.

Novo's sales of Ozempic, a diabetes drug with the same

active ingredient as Wegovy albeit in smaller doses, just missed

expectations. They rose 30% to 28.9 billion crowns compared to

the 29.8 billion expected by analysts.

Shares in Novo have risen about 230% since it first launched

Wegovy in the U.S. in June 2021, compared with a 9% rise in the

pan European STOXX 600 index in that time.

However, since the end of June shares have fallen 21%, a

drop analysts link to factors including strong trial data

released in July by Swiss drugmaker Roche for one of its

experimental obesity drugs.

Lilly will release its quarterly numbers on Thursday.

($1 = 6.8397 Danish crowns)