First six months of 2017 London 10 August 2017 - Novo Nordisk
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Slide 1
First six months of 2017
London
10 August 2017
Manato Ohara, diagnosed with type 1 diabetes
Kanagawa, Japan
Investor presentation First six months of 2017 Slide 2 Agenda Highlights and key events Sales update R&D update Financials and outlook
Investor presentation First six months of 2017 Slide 3
Forward-looking statements
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including the company’s Annual Report 2016 and Form 20-F, which are both filed with
the SEC in February 2017 in continuation of the publication of the Annual Report 2016, 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 presentation, 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 ‘Risk Management’ on pp 40-43 of the Annual Report 2016.
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 presentation, 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
Investor presentation First six months of 2017 Slide 4
Highlights – First six months of 2017
Sales development
• Sales increased by 4% in Danish kroner and 3% in local currencies
• North America Operations grew by 2% and accounted for 32% share of growth in local currencies
• International Operations grew by 5% and accounted for 68% share of growth in local currencies
• Region Europe grew by 4% in local currencies
• Region China grew by 7% in local currencies
• Region AAMEO grew by 4% in local currencies
• Tresiba® grew 149% and Victoza® grew 18% in local currencies
Research and Development
• Semaglutide in obesity demonstrated an adjusted average weight loss of 13.8% with the highest dose in phase 2 trial
• The US application for including SWITCH trials in the Tresiba® label to be reviewed in the context of the DEVOTE trial
• Positive 17-2 vote from FDA Advisory Committee that Victoza® reduces the cardiovascular risk in people with type 2 diabetes
• Victoza® approved in the EU as the only GLP-1 with a label to include prevention of cardiovascular events
Financials
• Operating profit increased by 8% in Danish kroner and by 6% in local currencies
• Diluted earnings per share increased by 6% to 8.07 DKK per share.
• 2017 financial outlook:
• Sales growth is now expected to be 1% to 3% in local currencies (now around 3% lower reported)
• Operating profit growth is now expected to be 1% to 5% in local currencies (now around 4% lower reported)
• An interim dividend of DKK 3.00 per share of DKK 0.20 will be paid in August 2017Investor presentation First six months of 2017 Slide 5
Sales growth is driven by new-generation insulin and
Victoza®
Sales as reported – First six months of 2017 Growth analysis – First six months of 2017
Human growth hormone Local currencies Growth Share of growth
(27%) Other biopharmaceuticals New-generation insulin1 155% 144%
(52%)
Haemophilia 2%
3% Modern insulin (1%) (20%)
(1%) 6%
7%
Human insulin (4%) (13%)
Obesity 9%
11%
2% Victoza® 18% 100%
+98%
Other diabetes care2 (2%) (3%)
Total diabetes care 9% 208%
Diabetes care Obesity (Saxenda®) 90% 32%
79%
81% +10% Diabetes and obesity care total 10% 240%
Haemophilia3 (2%) (8%)
Human growth hormone products (28%) (74%)
Sales of DKK 57.1 billion (+4%) Other biopharmaceuticals4 (53%) (58%)
Biopharmaceuticals (20%) (140%)
Total 3% 100%
1 Comprises Tresiba®, Xultophy®, Ryzodeg®
and Fiasp®
2 Primarily NovoNorm® and needles
3 Comprises NovoSeven®, NovoEight® and NovoThirteen®
4 Primarily Vagifem® and Activelle®Investor presentation First six months of 2017 Slide 6
Increasing total basal insulin market share in the US
Weekly TRx volume market shares in the US Tresiba® launch in the US
Tresiba® Levemir® NN Total Basal • Tresiba® New-to-Brand Prescriptions market share of
Basal volume glargine U100 glargine U300 around 12%
TRx MS biosimilar glargine U100
70% • Tresiba® TRx volume market share is now 8.5% and Novo
60% Nordisk expects to reach a TRx volume market share of
around 10% by the end of 2017
50% 50%
40% • The uptake of Tresiba® is driven by strong penetration in
30% 32% the commercial channel, partly offset by lower sales in
23% Medicare part D
20%
9%
10% 8% • Tresiba® has wide formulary access of around 70% access
0% 4% for patients in commercial channels and Medicare part D
Jan
01/01/2016 July combined in 2017
2016 2017
Note: The graph does not show NPH, which accounts for the residual market share
Source: IMS weekly Xponent Plantrak (excludes Medicaid), 21 July 2017
TRx volume: Insulin volume in mega units (MU) associated with total number of prescriptions;
MS: Market share Source: IMS weekly Xponent Plantrak (excludes Medicaid), 21 July 2017Investor presentation First six months of 2017 Slide 7
Continued GLP-1 market volume growth of more than 25%
in the US
US GLP-1 market development US GLP-1 market monthly TRx US GLP-1 volume market share
MAT Total TRx MAT volume GLP-1 TRx Victoza® exenatide GLP-1 TRx Victoza® exenatide
GLP-1 TRx Growth rate growth rate volume albiglutide dulaglutide market albiglutide dulaglutide
(million) (million) share
10 35% 0.40 100%
Millions
30% 0.35
8 80%
25% 0.30
6 0.25 60%
20%
0.20 46%
4 15% 40%
0.15 34%
10% 0.10
2 20% 16%
5% 0.05 4%
0 0% 0.00 0%
May May May May May May
2014 2017 2014 2017 2014 2017
Source: IMS NPA monthly, May 2017Investor presentation First six months of 2017 Slide 8
Broad market access across the diabetes portfolio
expected to be maintained in the US for 2018
Current level of unrestricted market access for
key Novo Nordisk diabetes products in the US US formulary negotiations and 2018 pricing
Unrestricted Commercial Medicare part D
• For 2018, formulary negotiations with pharmacy benefit
market access
managers and managed care organisations in the US are
100% progressing
80%
• Subject to the final outcome of these negotiations, average
prices after rebates are expected to be lower compared
60% with the levels in 2017, predominantly driven by the basal
insulin segment
40%
• Market access is anticipated to remain broadly unchanged
20%
across the diabetes portfolio at a level similar to 2017
0%
Victoza®
Victoza® Levemir
Levemir® Tresiba
Tresiba® NovoLog
Novolog®
Source: FingerTip Formulary, May 2017
Note: Unrestricted access excludes prior authorisation, step edits and other restrictionsInvestor presentation First six months of 2017 Slide 9
Sales growth is primarily driven by the US, Region Europe
and Region China
Sales as reported – First six months of 2017 Growth analysis – First six months of 2017
Region Region Latin America Local currencies Growth Share of growth
Japan & Korea +14% North America Operations 2% 32%
+3%
3% Hereof USA 2% 28%
Region China 5%
+5% International Operations 5% 68%
10%
Region Region Europe 4% 24%
AAMEO 11% North America
53%
+3% Operations Region AAMEO 4% 13%
+5%
Region China 7% 22%
Region 18%
Region Japan & Korea 1% 1%
Europe
+3% Region Latin America 9% 8%
Sales of DKK 57.1 billion (+4%) Total sales 3% 100%
AAMEO: Africa, Asia, Middle East & OceaniaInvestor presentation First six months of 2017 Slide 10
Basal insulin market penetration with Tresiba® is
supported by Xultophy® launches
Tresiba® value share of basal insulin segment Combined value share of Tresiba® and
in selected countries outside the US Xultophy® in selected countries
Switzerland Netherlands UK India Switzerland Sweden Greece Tresiba® share
Japan Spain Argentina Greece France (Xultophy® only)
Mexico Denmark Brazil Italy
60%
40% 56%
41%
30% 28% 41%
30% 40%
24% 28%
22%
20%
19% 20%
20% 21%
10% 12% 13%
10% 10%
5%
0% 0%
0 10 20 30 40 50 0 10 20 30 40 50
Months from launch Months from launch1
Note: Limited IMS coverage in India Source: IMS Monthly value figures, May 2017
Source: IMS Monthly value figures, May 2017 1 Switzerland, Sweden and Greece: Months from Tresiba® launch. France: Months from
Xultophy® launch (Tresiba® is not launched in France).Investor presentation First six months of 2017 Slide 11
Semaglutide in obesity demonstrated an adjusted average
weight loss of 13.8% with the highest dose in phase 2 trial
Semaglutide in obesity phase 2 trial design Key results and next steps
Patients Adjusted for
completed2 discontinuation3 Placebo
0%
Semaglutide 0.05-0.4 mg. sc QD
957 people -5% -2.3%
with Placebo 0.05-0.4 mg. sc QD
-10%
obesity
without Liraglutide 3.0 mg. sc QD
-15% -13.8%
diabetes1 -16.2%
Placebo 3.0 mg. sc QD -20%
Average
52 weeks weight loss
Next steps: Phase 3 clinical trial programme to be initiated in
the first half of 2018
1Inclusion criteria: Male or female, age ≥18 yrs, BMI ≥30 kg/m2, stable body weight, preceding failed 2Includes patients who completed treatment. From a mean baseline weight of around 111 kg an average
dietary effort, no diabetes (HbA1cInvestor presentation First six months of 2017 Slide 12
Key development milestones reached
• Data from the DEVOTE trial submitted in the US and the EU for a label update of Tresiba ®
• The US application for including SWITCH trials in the Tresiba® label to be reviewed in the context of the
DEVOTE trial
Diabetes
• Victoza® approved in the EU as the only GLP-1 with a label to include prevention of CV events
• Positive 17-2 vote from FDA Advisory Committee that Victoza® reduces the cardiovascular risk in people
with type 2 diabetes
Obesity • EU label update for Saxenda® based on the LEADER trial approved by the European Commission
• REBINYN® approved in the US and Refixia® approved in the EU (N9-GP)
Biopharm • New Drug Application for N9-GP submitted to the Japanese Ministry of Health
• Positive results from pivotal phase 3a trial with long-acting growth hormone somapacitan (NN8640)1
FDA: Food and Drug Administration; CV: Cardiovascular
1 Indication in adult growth hormone deficiencyInvestor presentation First six months of 2017 Slide 13
Significant regulatory news flow in 2017
Results available Regulatory milestone
Project Q1 2017 Q2 2017 Q3 2017 Q4 2017
US & EU submission of
DEVOTE data1 √
Tresiba®
EU SWITCH approval √
SUSTAIN 7 US regulatory decision
Once-weekly semaglutide Japan submission √ phase 3b data CHMP opinion
LEADER US reg. decision
Victoza®
LEADER EU approval √
EU approval √
Fast-acting insulin aspart US regulatory decision
US resubmission √
Semaglutide obesity Phase 2 data √
US approval √
N9-GP
EU approval √
Japan submission √
Concizumab Phase 1 data √
Somapacitan REAL 1 phase 3a data2 √
Diabetes Obesity Haemophilia Growth disorders
1It is Novo Nordisk’s assessment that FDA plans to review the SWITCH studies in the context of the data from the recently submitted DEVOTE trial. Feedback expected by the end of Q1 2018. 2 Study
conducted in adult growth hormone disorder
CHMP: Committee for Medicinal Products for Human Use in the EUInvestor presentation First six months of 2017 Slide 14
Financial results – first six months 2017
DKK million Change Change
H1 2017 H1 2016
(reported DKK) (local currency)
Sales 57,090 54,671 4% 3%
Gross profit 48,430 46,392 4% 3%
Gross margin 84.8% 84.9%
Sales and distribution costs 13,548 13,608 (0%) (1%)
Percentage of sales 23.7% 24.9%
Research and development costs 6,703 6,635 1% 1%
Percentage of sales 11.7% 12.1%
Administration costs 1,770 1,781 (1%) (2%)
Percentage of sales 3.1% 3.3%
Other operating income, net 467 438 7% 5%
Operating profit 26,876 24,806 8% 6%
Operating margin 47.1% 45.4%
Financial items (net) (1,229) (251) 390%
Profit before income tax 25,647 24,555 4%
Income taxes 5,540 5,132 8%
Effective tax rate 21.6% 20.9%
Net profit 20,107 19,423 4%
Diluted earnings per share (DKK) 8,07 7,63 6%Investor presentation First six months of 2017 Slide 15
The US dollar has depreciated 8% since Q1 2017 report,
leading to a 4%1 negative operating profit impact
USD/DKK CNY/DKK JPY/DKK GBP/DKK CAD/DKK
120 Hedged 2016 2017 Spot rate Spot rate
Index (1 Jan 2016= 100)
Currencies2 average3 average3 Q1 (28 Apr) Q2 (4 Aug) Change
115
Hedged currencies
110 USD 673 680 680 626 (8%)
105 CNY 101.3 99.2 98.6 93.2 (5%)
100
JPY 6.21 6.05 6.10 5.69 (7%)
95
90 GBP 911 860 880 823 (6%)
85 CAD 508 514 499 498 (0%)
80
Hedged Impact of a Hedging
Currencies2 5% move4 (months)
USD/DKK Yearly average Quarterly average
(8%) from 28 Apr
720 USD 1,900 12
to 4 Aug
700 CNY 305 65
Exchange rate
USD vs. DKK
680 JPY 185 12
660 GBP 85 13
CAD 80 11
640
1 Reported operating profit is now expected to be negatively impacted by 4 percentage points
620 compared with the expected positive impact of 1 percentage point as guided in connection with the
1 2 3 4 1 2 report for the first three months of 2017. The change reflects the significant depreciation of the US
dollar and other key invoicing currencies versus the Euro and the Danish krone.
2016 2017 2 DKK per 100; 3 As of 4 August 2016 and 2017, respectively; 4 Operating profit in DKK million per
annum; 5 Chinese Yuan traded offshore (CNH)Investor presentation First six months of 2017 Slide 16
Financial outlook for 2017
Expectations Previous expectations
9 August 2017 3 May 2017
Sales growth - local currencies 1% to 3% 0% to 3%
Sales growth - reported Around 3 percentage points lower Around 1 percentage points higher
Operating profit growth - local
currencies 1% to 5% -1% to 3%
Operating profit growth - reported Around 4 percentage points lower Around 1 percentage points higher
Financial items (net) Loss of around DKK 0.2 billion Loss of around DKK 1.8 billion
Effective tax rate 21-22% 21-23%
Capital expenditure Around DKK 9.5 billion Around DKK 10 billion
Depreciation, amortisation and Around DKK 3 billion Around DKK 3 billion
impairment losses
Free cash flow Around DKK 29-33 billion Around DKK 29-33 billion
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 4 August 2017Investor presentation First six months of 2017 Slide 17
Closing remarks
Solid leadership positions and continued
market opportunities Promising pipeline and product launches
> 27%
> Novo Nordisk value market share in diabetes • The only company with a full portfolio of novel
care and solid leadership position insulin and GLP-1 products
~5% insulin market volume growth • Semaglutide portfolio offers expansion opportunity
44% Novo Nordisk insulin volume market share with both injectable and oral administration
with leadership position across all regions • Xultophy® supports promising outlook for insulin and
>20% GLP-1 volume market growth GLP-1 combination therapy
55% Novo Nordisk GLP-1 volume market share • Saxenda® and multiple clinical stage development
with strong global leadership position projects hold potential within obesity
19 countries successfully launched Saxenda® • Broad pipeline within haemophilia
Source: IMS MAT May 2017 volume and value (DKK) figuresInvestor presentation First six months of 2017 Slide 18
Investor contact information
Share information Investor Relations contacts
Novo Nordisk’s B shares are listed on the stock exchange in Novo Nordisk A/S
Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on Investor Relations
the New York Stock Exchange under the symbol ‘NVO’. For Novo Allé, DK-2880 Bagsværd
further company information, visit Novo Nordisk on the
internet at: novonordisk.com
Peter Hugreffe Ankersen +45 3075 9085 phak@novonordisk.com
Upcoming events Hanna Ögren +45 3079 8519 haoe@novonordisk.com
01 Nov 2017 Financial statement for the first nine months of 2017 Anders Mikkelsen +45 3079 4461 armk@novonordisk.com
01 Feb 2018 Financial statement for 2017
Christina Jensen +45 3079 3009 cnje@novonordisk.com
In North America:
Kasper Veje +1 609 235 8567 kpvj@novonordisk.comYou can also read
