investor conference call first three months of 2015...2015/04/30 · investor conference call first...

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Investor conference call

First three months of 2015

Mexico City – part of Cities Changing Diabetes

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Agenda

Highlights and key events by Lars Rebien Sørensen, CEO

R&D update by Mads Krogsgaard Thomsen, CSO

Financials and outlook by Jesper Brandgaard, CFO

Sales update by Lars Rebien Sørensen, CEO

Questions & answers session

Investor conference call First three months of 2015

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Forward-looking statements

Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company’s Annual Report 2014 and Form 20-F, both filed with the SEC in February 2015, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:

• Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto

• Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures

• Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and

• Statements regarding the assumptions underlying or relating to such statements.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.

Please also refer to the overview of risk factors in ‘Be aware of the risk’ on p 42-43 of the Annual Report 2014 on the company’s website novonordisk.com.

Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.

Important drug information

• Victoza® (liraglutide 1.2 mg & 1.8 mg) is approved for the management of type 2 diabetes only

• Saxenda® (liraglutide 3 mg) is approved in the US and EU for the treatment of obesity only


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Highlights – first three months of 2015

Sales development • Sales increased by 24% in Danish kroner and 9% in local currencies

• North America, International Operations and Region China grew by 34%, 22% and 31% in Danish kroner, respectively • Levemir® increased by 31% in Danish kroner and continues to capture market share in the US • Victoza® increased by 36% in Danish kroner and continues to drive the growth of the GLP-1 market

• Tresiba® continues to perform well in countries with similar reimbursement as insulin glargine

Research and Development • Tresiba® and Ryzodeg® resubmitted to the US FDA in March and accepted for review in April • Final two phase 3a trials comparing faster-acting insulin aspart with NovoRapid® successfully completed • Positive results for phase 2 trial with oral semaglutide in people with type 2 diabetes • Saxenda® approved in Europe for the treatment of obesity

Financials • Operating profit growth of 73% in Danish kroner; adjusted for partial NNIT divestment the growth was 17% in local currency • Diluted earnings per share increased 56% to 3.79 DKK per share and 3.02 DKK when adjusted for partial divestment of NNIT

2015 financial outlook: • Sales growth is now expected to be 7-9% in local currencies (around 16% higher as reported) • Operating profit growth is now expected around 17% in local currencies (around 25% higher as reported)

• 2015 share repurchase programme increased to DKK 17.5 billion primarily reflecting partial divestment of NNIT


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Changes to Executive Management

President & CEO Lars Rebien Sørensen

EVP Chief Financial

Officer

Jesper Brandgaard

Jakob Riis

EVP China, Pacific &

Marketing

Mads Krogsgaard Thomsen

EVP Chief Science

Officer

Lars Fruergaard Jørgensen

EVP Corporate

Development

EVP Europe

Jerzy Gruhn

EVP Product Supply

Henrik Wulff

EVP International Operations

Maziar Mike Doustdar

EVP US

Jesper Høiland


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Growth analysis – First three months of 2015

North America is the main contributor to growth

Sales as reported – First three months of 2015

Local currencies Growth Share of growth

North America 11% 56%

Europe 5% 11%

International Operations 12% 20%

Region China 11% 13%

Japan & Korea 0% 0%

Total sales 9% 100%

International Operations

+22%

Region China +31%

Japan & Korea +6%

North America +34%

Europe +6%

49%

20%

15%

11%

5%

Sales of DKK 25.2 billion (+24%)


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Local currencies Growth Share of growth

New-generation insulin n/a 10%

Modern insulin 8% 39%

Human insulin 0% 0%

Victoza® 18% 28%

Other diabetes care1 6% 3%

Diabetes care 9% 80%

Haemophilia2 6% 8%

Norditropin® 9% 7%

Other biopharmaceuticals 14% 5%

Biopharmaceuticals 8% 20%

Total 9% 100%

Growth is driven by modern insulin and Victoza®

Sales as reported – first three months of 2015 Growth analysis – first three months of 2015

1 Includes protein related products and OAD

2 Includes NovoSeven®, NovoEight® and NovoThirteen®

Other +30%

7% Haemophilia

+21% 11%

Diabetes care +24%

79%

3%

79%

11%

7% 3%

Norditropin®

+22%

Sales of DKK 25.2 billion (+24%)


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64%

3%

2%

30%

0%

20%

40%

60%

80%

100%

Source: IMS NPA MAT, Feb 2015

US GLP-1 market development

Source: IMS NPA MAT, Feb 2015

Victoza® maintains leadership in the US GLP-1 market

Feb 2015

Feb 2012

Feb 2012

Total TRx Growth rate

0%

5%

10%

15%

20%

25%

0

1,000

2,000

3,000

4,000

5,000

Thousands

US GLP-1 market shares

exenatide Victoza®

albiglutide dulaglutide

Feb 2015

MAT GLP-1 TRx (000)

GLP-1 TRx market share

MAT volume growth rate


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Levemir® market share and device penetration in the US modern basal insulin segment

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Note: Reported sales first three months of 2015

Levemir® sales growth driven by strong performance in North America

North America drives strong Levemir® performance aided by continued market share gains in the US

68%

North America

Europe IO China Japan & Korea

DKK billion

21%

Growth in local currency

0%

6% 15% -31%

0%

5%

10%

15%

20%

25%

30%

30%

40%

50%

60%

70%

80%

Feb 2015

Market share

Feb 2014

Feb 2013

Feb 2012

Device penetration

0%

Levemir® market share Levemir® device penetration

Source: IMS MAT volume figures


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Key launch observations Tresiba® value share of basal insulin segment

in selected countries

Roll-out of degludec portfolio progressing well

Note: Limited IMS coverage in India Source: IMS Monthly value figures, Feb 2015

Months from launch

• Tresiba® launched in 27 countries, recently in Colombia, Libya, Finland and the United Arab Emirates

• Tresiba® has shown solid penetration in markets with similar reimbursement as insulin glargine

• Penetration of Tresiba® remains modest in markets with restricted market access compared to insulin glargine

• Ryzodeg® commercially launched in Mexico and India, and now also in Bangladesh

• Xultophy® launched in Switzerland as first country

15%

27%

27%

13%

8% 3%

2%

7%

8%

4%

0% 0%

5%

10%

15%

20%

25%

30%

1 3 5 7 9 11 13 15 17 19 21 23 25

Mexico

Switzerland

Japan India Sweden Denmark

Germany Argentina Brazil Netherlands

United Kingdom


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• FDA has accepted for review the Class II Resubmissions for Tresiba® and Ryzodeg®

• The resubmission is based on the interim analysis of DEVOTE and includes a safety update from all clinical trials with insulin degludec as well as post marketing data

• Access to interim data remains restricted to a small team. Novo Nordisk management does not have access to the data

• The trial is expected to be completed in the second half of 2016

1 Key inclusion criteria: Age ≥ 50 years at screening with established CV disease or chronic kidney disease or Age ≥ 60 years at screening with risk factors for CV disease. Treatment with one or more oral or injectable anti-diabetic drug(s). Insulin naïve with HbA1c ≥ 7.0 and eligible for insulin treatment or insulin treated with HbA1c ≥ 7.0 or HbA1c < 7.0 and current insulin treatment corresponding to at least 20IU of basal insulin OAD: Oral Anti-Diabetic drug; HR: Hazard Ratio; MACE: Major Adverse Cardiovascular Event

DEVOTE (EX1250-4080) trial design Status and next steps

FDA accepts Tresiba® and Ryzodeg® resubmissions for review

Insulin glargine (blinded vial) + standard of care

Tresiba® (blinded vial) + standard of care

Oct 2013 H2 2016

7,638 people with type 2 diabetes currently on OADs or insulin1

Interim analysis Final analysis

Jan 2015


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• Greater improvement of HbA1c with mealtime faster-acting insulin aspart and similar HbA1c improvement when dosed post-meal

• Statistically larger improvements in 1- and 2-hour PPG increments with meal-time faster-acting insulin aspart

• Similar overall rate of hypoglycaemia for all treatment groups, with a higher rate within first hour after meal if dosed at mealtime

1 Inclusion criteria: Type 1 diabetes, optimised on Levemir®. 1,143 people randomised

2 Inclusion criteria: Type 2 diabetes, optimised on basal insulin and OAD; HbA1c of 7.5-9.5%. 689 people randomised MT: Mealtime; PM: Post-meal

Trial design Headline results

Phase 3a trials comparing faster-acting insulin aspart with NovoRapid® shows non-inferiority

Note: Previously reported safety and tolerability profiles of insulin aspart confirmed PPG: Postprandial glucose

881 people with type 2 diabetes2

Faster-acting insulin aspart (MT)

NovoRapid® (MT)

-8 0 Run-in 26

weeks

Faster-acting insulin aspart (PM)

Faster-acting insulin aspart (MT)

1,290 people with type 1 diabetes1

52 weeks

NovoRapid® (MT)

26

-8 0 Run-in

• Similar reduction of HbA1c in both treatment groups

• Statistically larger improvement in 1-hour PPG increment with faster-acting insulin aspart and numerically larger reduction for 2-hour PPG increment

• Similar overall rate of hypoglycaemia, with a higher rate of hypoglycaemia for faster-acting insulin aspart within first two hours after meal

On

set®

1

On

set®

2


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• From a baseline HbA1c of 7.9% people achieved the following improvements: • Oral semaglutide: 0.7% to 1.9% (dose dependent) • Sc semaglutide: 1.9% • Oral placebo: 0.3%

• From a baseline of 92 kg people experienced a comparable weight loss of 6.5 kg with subcutaneous and the highest doses of oral semaglutide versus 1 kg for placebo

• Semaglutide appeared to have a safe and well-tolerated

profile; the most common adverse events were transient nausea and vomiting

• Phase 3 decision to be made after consultations with

regulatory authorities and commercial assessment

1 Key inclusion criteria: People with type 2 diabetes treated with diet and exercise and/or on a stable dose of metformin; HbA1c 7.0-9.5% (both inclusive); BMI 25-40 (both inclusive). 2 Fast and slow escalation arms

T2DM: Type 2 diabetes; Sc: Subcutaneous; QD: Once daily; QW: Once weekly

Phase 2 trial design Headline results

Positive results for phase 2 trial with oral semaglutide

Oral placebo (QD)

Sc semaglutide 1.0 mg (QW)

0 26 weeks

632 T2DM patients diabetes drug naïve or on metformin1


Oral semaglutide 2.5 mg (QD)

Oral semaglutide 5 mg (QD)



Oral semaglutide 40 mg (QD)2

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Significant news flow from late-stage diabetes and obesity pipeline

Note: Indicated timeline as of financial release of first three months of 2015 on 30 Apr


Project Past 3 months Within 3 months In ~3-6 months In ~6-9 months

Oral GLP-1 Phase 2a

Tresiba®

Faster-acting insulin aspart

LATIN T1D ADJUNCT TWO™

ADJUNCT ONE™

Results available

In ~9-12 months

Semaglutide

SUSTAIN™ 1

SUSTAIN™ 3

SUSTAIN™ 2

SUSTAIN™ 4

SUSTAIN™ 5

Victoza®

SUSTAIN™ 6

LEADER™

Saxenda® SCALE™ extension data

US resubmission √

onset® 2 √

onset® 1 √

√

SWITCH 1

SWITCH 2

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DKK million Q1 2015 Q1 2014 Change Sales 25,200 20,343 24% Gross profit 21,326 16,877 26% Gross margin 84.6% 83.0%

Sales and distribution costs 6,147 5,086 21% Percentage of sales 24.4% 25.0%

Research and development costs 3,250 3,168 3% Percentage of sales 12.9% 15.6%

Administration costs 854 805 6% Percentage of sales 3.4% 4.0%

Other operating income, net 2,782 215 N/A Hereof non-recurring income from the IPO of NNIT 2,376

Operating profit 13,857 8,033 73% Net financials (1,372) 268 N/A Profit before income tax 12,485 8,301 50% Tax 2,609 1,843 42% Effective tax rate 20.9% 22.2%

Net profit 9,876 6,458 53% Diluted earnings per share (DKK) 3.79 2.43 56% Diluted earnings per share (DKK) adjusted for NNIT IPO 3.02 2.43 24%

Financial results – first three months of 2015


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40

60

80

100

120

140

90

95

100

105

110

115

120

125

130

135

Appreciation of key currencies against the Danish krone drive significant positive currency impact in 2015


Hedged c

urr

encie

s

Index (

1 J

an 2

014 =

100)

CNY/DKK JPY/DKK USD/DKK

Non-h

edged c

urr

encie

s

Index (

1 J

an 2

014 =

100)

2014

CAD/DKK GBP/DKK

1 DKK per 100; 2 As of 27 Apr 2015; 3 Operating profit in DKK million per annum; 4 USD used as proxy; 5 Operating profit impact of one of the non-hedged currencies fluctuating 5% is in the range of DKK 15-30 million

Hedged Currencies

2014 average

2015 average2

Spot rate2

Impact of a 5% move3

Hedging (months)

USD1 562 669 689 1,675 10

CNY1 91.2 107.4 110.8 270 104

JPY1 5.32 5.61 5.77 115 12

GBP1 925 1,010 1,042 80 11

CAD1 509 540 567 60 11

Non-hedged Currencies5

2014 average

2015 average2

Spot rate2

RUB1 14.8 11.1 13.4

INR1 9.20 10.74 10.9

ARS1 0.69 0.77 0.77

BRL1 239 231 233

TRY1 257 267 254

INR/DKK ARS/DKK RUB/DKK TRY/DKK BRL/DKK

3 1 2 4 1

2015

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Financial outlook for 2015

The financial outlook is based on an assumption of a continuation of the current business environment and given the current scope of business activities and has been prepared assuming that currency exchange rates remain at the level as of 27 Apr 2015


Sales growth - local currencies

Sales growth - reported

Operating profit growth - local currencies

Operating profit growth - reported

Net financials

Effective tax rate

Capital expenditure

Free cash flow

Expectations 30 Apr 2015

7-9%

Around 16 percentage points higher

Around 17%


Loss of around DKK 6 billion

Around 21%

Around DKK 5.0 billion


Around DKK 32-34 billion

Previous expectations 30 Jan 2015

Depreciation, amortisation and impairment losses

6-9%


Around 10%


Loss of around DKK 5 billion

Around 22%



Around DKK 29-31 billion

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6 8 10 12 13

12 12

14 15 15

2.5

0

5

10

15

20

25

30

35

2011 2012 2013 2014 2015E

Annual cash return to shareholders Share repurchase programmes have enabled

continued reduction in share capital

Organic growth enables steady cash return to shareholders via dividends and share repurchase programmes

1 Based on improved outlook for free cash flow generation primarily related to partial divestment of NNIT

Note: Dividends are allocated to the year of dividend pay. For 2015 expected free cash flow is DKK 32-34 billion. Share repurchase programmes run for 12 months starting February until end January of the following year

580 560 550 530 520

300

350

400

450

500

550

600

2011 2012 2013 2014 2015

DKK billion

DKK million

0

Share capital CAGR -2.7%

-3% -2%

-4% -2%


Share repurchase Dividend Free cash flow

Expanded share repurchase1

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Source: IMS MAT Feb 2015 volume and value (DKK) figures

Solid market performance Promising pipeline

Closing remarks

> > • The only company with a full portfolio of novel

insulin products

• GLP-1 portfolio offers expansion opportunity within type 1 and 2 diabetes

• Xultophy® supports promising outlook for insulin and GLP-1 combination therapy

• Saxenda® holds potential within obesity

• Promising pipeline within haemophilia and growth hormone disorders

• ≥10% annual diabetes care market growth driven by diabetes prevalence

• 27% market share in diabetes care and solid leadership position

• 47% insulin volume market share with leadership position across all regions

• 45% modern and new-generation insulin volume c market share

• 69% GLP-1 value market share with strong global leadership position


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Share information Investor Relations contacts

Investor contact information

Novo Nordisk’s B shares are listed on the stock exchange in Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For further company information, visit Novo Nordisk on the internet at: novonordisk.com

Kasper Roseeuw Poulsen +45 3079 4303 [email protected]

Daniel Bohsen +45 3079 6376 [email protected]

Melanie Raouzeos +45 3075 3479 [email protected]

In North America:

Frank Daniel Mersebach

+1 609 235 8567

[email protected]

Novo Nordisk A/S Investor Relations Novo Allé, DK-2880 Bagsværd

07 Jun 2015 Investor and analyst event in connection with ADA

06 Aug 2015 Financial statement for the first six months of 2015

29 Oct 2015 Financial statement for the first nine months of 2015

03 Feb 2016 Financial statement for 2015

Upcoming events


mailto:[email protected]




investor conference call first three months of 2015...2015/04/30 · investor conference call first...

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