Credit Suisse upgraded Danish pharmaceutical company Novo Nordisk to outperform from neutral on Thursday, citing growth in its obesity and diabetes drugs. Weight-loss drug Wegovy has had a successful relaunch after dealing with supply issues, while diabetes drug Ozempic has seen accelerating growth instead of moderation following Wegovy’s relaunch, analyst Dominic Lunn said in a note to clients. “Rx trends for both Ozempic and Wegovy YTD have been a major surprise and have significantly outperformed our expectations,” he wrote. NVO YTD mountain U.S.-listed shares of Novo Nordisk Both drugs have catapulted into the spotlight thanks to the success they have shown in weight loss and the endorsement by celebrities and social media influencers. Only Wegovy, however, has been approved by the Food and Drug Administration for weight loss. Ozempic is authorized to treat diabetes, although it is being used off-label for weight loss. Both medications are semaglutide, but Wegovy is a higher dose. The run on Wegovy prompted a shortage last year, causing some patients to switch to Ozempic. Now that Wegovy is back in supply, Credit Suisse had expected a potential slowdown in growth for Ozempic. Instead, while there has been a rise in new patients taking Wegovy, Ozempic is continuing to see growth, Dunn said. “In our view, these latest trends visibly take 2023 estimates beyond Novo’s current growth guidance and consensus expectations, although we understand buy-side expectations are already significantly ahead of published sell-side forecasts,” he said. Recent total prescription trends have Ozempic growing 100% year over year, he said. Semaglutide is part of a class of drugs called glucagon-like peptide 1, or GLP-1, which only has 22% penetration in diabetes in the U.S., Dunn said. “Novo sees growth being driven by penetration in diabetes rather than off-label obesity use, which is backed up by the fact the Ozempic growth has accelerated despite re-supply of Wegovy for Obesity,” he said. Meanwhile, Credit Suisse has increased its Wegovy sales forecasts by more than 100% thanks to the drug’s rapid growth since its relaunch. While Eli Lilly ‘s Mounjaro has shown better results than Wegovy when it comes to weight loss, Mounjaro is still only approved for diabetes. “A first mover advantage and a still high efficacy response should see Wegovy continue to lead the way in the expansion of the obesity market,” Dunn wrote. U.S.-listed shares of Novo Nordisk were up about 1.5% in midday trading. — CNBC’s Michael Bloom contributed reporting.