Norwegian Air profit warning drags on EasyJet, Novo Nordisk hit as study links weight loss drug to eye condition

“Whilst there’s been no sign of the record-breaking performance enjoyed over in the US and Asia over the past couple of days, London markets have taken election day in their stride.” says Danni Hewson, Head of Financial Analysis at AJ Bell.

“Sterling hit a three year high against the dollar as expectations that the Bank of England will act sooner than the Fed grabbed hold, but currency markets will be carefully monitored from the time those exit polls land this evening.

Budget Airlines

“EasyJet was one of the day’s big losers on the FTSE 100 following a profit warning from rival Norwegian.

“The airline reported softer demand in the second quarter as well as being impacted by delivery delays from aircraft maker Boeing, which has required them to source alternate capacity for the summer months.

“Travel has been broadly protected from the cost of living crisis which saw many households cut back on nice-to-haves.

“Post-pandemic people were willing to do without other luxuries in order to afford a week in the sun or a city break with friends.

“Despite scaling back its profit forecast Norwegian’s passenger numbers for June were up a healthy 11%, a bounce they will need to capitalise on to prevent any further slide.

Novo Nordisk

“News that Novo Nordisk’s weight loss drugs have been linked to a condition that causes blindness unsurprisingly knocked the company’s share price back in early trading.

“Shares in competitor Eli Lilly also dipped in response to the findings of a US study.

“Semaglutide was originally developed to treat diabetes and is better known by the brand names Wegovy and Ozempic.

“The study’s author has said that, although they’d found that people who were overweight or obese and prescribed the drug were seven times more likely to be diagnosed with a condition called NAION, the study should be view as significant but tentative.

“Novo Nordisk said there were limitations to the study, but that it took all reports of adverse effects seriously and that patient safety was a top priority.

“The market for weight loss medication is already worth billions and is only expected to grow as more of the drugs are manufactured and the price falls back.

“It’s also being seen as a potential money saver for health providers globally as both diabetes and obesity lead to other conditions that can be hugely expensive to treat.

“One study doesn’t change that potential, but it does need to be added to the mix by investors.”

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