Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — FY2004 Earnings Presentation
60 slides from Novo Nordisk A/s Class B's earnings presentation, 2005
Slide 1: A focused healthcare company
A focused healthcare company Investor presentation – Full year 2004
Slide 2: Agenda
Agenda • Introduction • Diabetes care • Insulin – focus on analogues • Pipeline • Biopharmaceuticals • NovoSeven® • Growth hormone • Pipeline • Regions • North America • IO - focus on China • Financial results • Outlook for 2005 2
Slide 3: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995. Forward-looking statements provide our expectations or forecasts of future events such as new product introductions, product approvals a
Slide 4: Highlights from 2004
Highlights from 2004 Market development: • Gain of insulin market share continues, driven by analogues and US performance • Solid NovoSeven® growth continues • Launch of NordiFlex® underpins the growth hormone franchise Research and development: Encouraging clinical data from the NovoSeven® expans
Slide 5: A focused healthcare company within attractive therapy areas
A focused healthcare company within attractive therapy areas Existing and new focus areas continue … and NovoSeven® is on its to offer attractive growth rates … way to becoming a blockbuster 20 1,000 % CAGR 1999-2003 15 750 % 31 Million USD CNS Cancer GI G R Diabetes care CA 10 Cardiovascular Arthri
Slide 6: Key focus areas for 2005
Key focus areas for 2005 Diabetes care • Continued focus on analogue conversion as well as conversion to disposable delivery devices • Continuing the Levemir® roll-out • Levemir® approval in the US • Launch of new delivery devices (NovoPen® 4) and needles (Conical needle and the Autocover™ needle) B
Slide 7: Key products continue to drive growth – full year 2004
Key products continue to drive growth – full year 2004 Sales as reported Growth analysis Other Local currencies Growth Share of Growth hormone +7% growth therapy +9% Insulin analogues 84% 55% Human insulin and 2% 7% NovoSeven® insulin-related sales +13% OAD 21% 8% Diabetes care 15% 70% NovoSeven® 19
Slide 8: Insulin analogues sales development
Million DKK 0 200 400 600 800 1.000 1.200 1.400 Q1 2002 Insulin analogues Analogue sales development Q4 2004 +68% Key observations • Growth in fourth quarter of 75% in local currencies • Growth of 84% in local currencies for full year 2004 • Strong NovoRapid® and NovoMix® 30 market share gains in al
Slide 9: A continued increase in analogue market share…
A continued increase in analogue market share… Novo Nordisk’s analogue Analogue penetration market share 30% 25% Analogues 35% 20% 7% 15% 10% Human insulin 5% 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 9
Slide 10: … driven by NovoRapid® and FlexPen® …
… driven by NovoRapid® and FlexPen® … NovoRapid® share of short-acting analogues Composition of NovoRapid® sales 50% 40% Disposable devices 28% Durable devices 30% Vials 20% 44% 10% 28% 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 10
Slide 11: … as well as NovoMix® and FlexPen®
… as well as NovoMix® and FlexPen® NovoMix® share of premixed analogues Composition of NovoMix® sales 50% 40% Disposable devices 30% Durable devices Vials 20% 68% 10% 19% 0% 13% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 11
Slide 12: The European Levemir® roll-out is continuing
10% 0% 2% 4% 6% 8% 2004 January Source: IMS/BW, monthly volume data acting analogues in Europe Novo Nordisk share of long- 2004 November • Levemir® launched in 10 European countries • Continued roll-out in 2005 • Levemir® has by November 2004 obtained 9% of long-acting analogues in Europe • Amendmen
Slide 13: Levemir® - Treat to target with less hypos and less weight gain
Levemir® - Treat to target with less hypos and less weight gain – also in type 2 patients Less hypoglycaemic events Less weight gain with with Levemir® than NPH insulin Levemir® than NPH insulin 3.5 p < 0.05 18 47% risk reduction Events per patient per year p < 0.001 baseline to endpoint (kg) 16 3 +
Slide 14: 10% growth in Novo Nordisk's insulin franchise looks set to continue
10% growth in Novo Nordisk’s insulin franchise looks set to continue Volume and value size of the IMS world IMS world insulin market insulin market shares, value 60% Volume: 6.1% 50% Value: 11.3%* 40% G R 34.4 bn CA 30% Novo Nordisk DKK Eli Lilly 22.4 bn 20% Aventis DKK tMU 200 tMU 157 10% 0% MAT Q3
Slide 15: R&D pipeline update - diabetes care
R&D pipeline update - diabetes care • Insulin • Amended New Drug Application related to Levemir® filed with the FDA just before Christmas 2004. US marketing approval expected mid-2005 • NovoMix® 50 & 70 filed in Europe. Approval expected later in 2005 • NovoMix® 50 filed in Japan • Restructuring tra
Slide 16: Biopharma growth opportunities
Biopharma growth opportunities 16
Slide 17: NovoSeven® sales development
Million DKK 0 200 400 600 800 1.000 1.200 Q1 2002 NovoSeven® NovoSeven® sales development Q4 2004 +25% Key observations • Growth in fourth quarter of 32% in local currencies • Growth of 19% in local currencies for full year 2004 • Growth driven by North America, Europe and International Operations •
Slide 18: Further development of NovoSeven® within congenital bleeding disorders
- Surgery inhibitors FVII deficiency - Spontaneous bleeds Acquired haemophilia Congenital haemophilia with Glanzmann’s thrombasthenia - - - - + US Approved indications + + + + + EU - - + + + Japan congenital bleeding disorders Optimise the label in different regions as much as possible • Glanzmann’s
Slide 19: Trauma – population characteristics
Trauma – population characteristics Trauma population (x 1000) Key observations 400 • Blunt trauma constitutes more than 80% of all trauma cases 300 • Bleeding is the major cause of Europe death in trauma US • In EU 45,000 trauma victims 200 Japan receive more than one unit of RBC transfusion 100 •
Slide 20: NovoSeven® in trauma
NovoSeven® in trauma NovoSeven® reduces the need for transfusion in blunt trauma NovoSeven® proof-of-concept 100 • Significant reduction in RBC 90 transfusion requirements 80 • Reduction of reported co- Percent of patients 70 morbidities like ARDS and MOF 60 P= 0.019 • No safety concerns identified:
Slide 21: Intracerebral haemorrhage (ICH) – population characteristics
Intracerebral haemorrhage (ICH) – population characteristics ICH population (x 1000) Key observations • ICH causes 10-15% of US/EU 300 stroke cases • ICH is the deadliest form of Europe stroke 200 US • No medical or surgical therapy Japan has shown benefit 100 • Some 30,000 patients are eligible for
Slide 22: NovoSeven® in ICH
NovoSeven® in ICH Modified Rankin scale at Day 90 NovoSeven® proof-of-concept • Significant, dose-dependent 160 μg/kg reduction in haematoma growth • Reduction in death/severe disability 80 μg/kg as measured by the modified Rankin scale 40 μg/kg • No increase in the incidence of fatal or severely di
Slide 23: Norditropin® sales development
Million DKK 0 200 400 600 800 Q1 2002 Growth hormone Norditropin® sales development Q4 2004 +11% Key observations • Growth in fourth quarter of 15% in local currencies • Growth of 11% in local currencies for full year 2004 • Growth driven by Europe and North America, roll-out of NordiFlex® continues
Slide 24: R&D pipeline update - biopharmaceuticals
R&D pipeline update - biopharmaceuticals • NovoSeven® • Trauma • Regulatory dossier for blunt trauma submitted to EMEA early January 2005 • Trial targeting the US to be initiated in Q2 2005 • ICH • Regulatory dossier expected to be submitted to EMEA by mid-2005 • A global phase 3 trial to be initiat
Slide 25: The regional mix
The regional mix 25
Slide 26: Sales by region - full year 2004
Sales by region - full year 2004 Sales as reported Growth analysis Japan & Oceania +7% Europe Local Growth Share of +6% currencies growth International Europe 6% 18% Operations North America 32% 51% +15% International 21% 22% Operations Japan & Oceania 9% 9% North America +20% Sales of DKK 29.0 bill
Slide 27: North America sales development
Index local currency 0 50 100 150 200 250 Q1 2002 North America North America sales development Q4 2004 +25% Key observations • Growth in fourth quarter of 25% in local currencies, 15% as reported • Growth of 32% in 2004 in local currencies • Growth driven by insulin analogues and NovoSeven® • Aroun
Slide 28: North America - a key driver of Novo Nordisk growth
10% 20% 30% 40% 0% Q1 2000 Source: IMS/BW Note: Quarterly data Value North America Volume market share Novo Nordisk’s US insulin Q3 2004 Key observations • Expanded sales force of 800 diabetes care specialists in place • Corporate branding activities resulting in increased awareness • Formulary cove
Slide 29: International Operations sales development
Index local currency 0 100 150 200 250 50 Q1 2002 sales development International Operations International Operations Q4 2004 +33% Key observations • Growth in fourth quarter of 33% in local currencies, 26% as reported • Growth of 21% in 2004 in local currencies • Sales comprise 17% of total Novo No
Slide 30: China, a future driver of growth
Index local currency 0 100 150 200 250 300 350 400 450 50 Q1 2002 China sales development Q4 International Operations 2004 +54% Key observations • 16% of sales in International Operations, growing by 49% in 2004 in local currencies • Some 90% of all insulin sold in devices • Well-established relatio
Slide 31: Financials
Financials 31
Slide 32: Financial results
Financial results Financial results DKK million Full year Fourth quarter 2004 2003 % change 2004 2003 % change Sales 29,031 26,158 11 7,944 7,111 12 Operating profit 6,980 6,422 9 1,855 1,731 7 Net financials 477 954 (50) 285 406 (30) Profit before tax 7,457 7,376 1 2,140 2,137 0 Net profit 5,013 4,
Slide 33: Gross margin analysis
-2,0% -1,0% 0,0% 1,0% 2,0% 2002 currencies Reported change Impairment impact* 2003 Gross margin analysis 2004 Currency impact Underlying change Key observations • Product and geographical mix positively impacting gross margin * Impairment impact includes change of threshold for capitalising investme
Slide 34: Currency exposure
Currency exposure 9.0 avg = 7.88 Effect of 5% depreciation on full-year operating profit 8.0 in 2005* (DKK million) USD USD -280 avg = 6.59 -130 7.0 JPY -80 JPY -70 avg = 5.99 GBP * currency hedging income YTD is recorded as financial 6.0 avg = 5.67 income USD rel avg = 6.30 YTD avg = 5.48 avg = 5.6
Slide 35: Outlook for 2005
Outlook for 2005 • Sales growth expectations: • 10%-15% in local currencies • Around 10% as reported Key currency rates • Operating profit growth expectations: DKK 2004 2005 Current per 100 averag ytd avg rate* • 15% underlying e USD 599 567 572 • Around 5% as reported JPY 5.54 5.48 5.53 • Net finan
Slide 36: Novo Nordisk going forward
Novo Nordisk going forward Key growth drivers going forward • Leadership in diabetes care with full portfolio of insulin analogues • NovoSeven® expanding into critical bleeding Balancing • Expanding the presence in North America growth and value • Continued growth in International Operations driven
Slide 37: Investor Information
Investor Information Share information Investor Relations contacts Novo Nordisk A/S Novo Nordisk’s B shares are Investor Relations Novo Allé, DK2880 Bagsværd listed on the stock exchanges in Fax (+45) 4443 6633 Copenhagen and London. Its Mogens Thorsager Jensen Tel (direct): (+45) 4442 7945 ADRs ar
Slide 38: Appendices
Appendices novo nordisk” 38
Slide 39: Insulin secretion
Insulin secretion 800 People without diabetes Insulin Secretion (pmol/min) 700 Type 2 diabetes 600 500 400 300 200 100 0600 1000 1400 1800 2200 0200 0600 Source: O'MEARA et al. Am. J. Medicine, 1990; 89. 39
Slide 40: Diagnosed but not adequately treated
Diagnosed - but not adequately treated Insulin is the ultimate treatment Only 1/3 are at goal Diet and 100 exercise alone 80 27 32 -Cell function Oral % of subjects therapy Typ e 2- 60 15 slop Oral/insulin 19 e 20 40 22 Insulin 20 Type 1 - Immediate need for insulin 38 27 0 Time from diagnosis OAD
Slide 41: Insulin is the ultimate treatment
Insulin is the ultimate treatment Insulin is the ultimate treatment Key observations • A clear focus on the need for intensifying treatment of diabetes, both via the use of OADs and insulin -Cell function • The number of type 2 patients using insulin is outgrowing the number of Insulin type 1 patie
Slide 42: Insulin is the ultimate treatment… also for type 2 patients
Insulin is the ultimate treatment… - also for type 2 patients Share of type 2 patients using Type of insulin regimen for type 2 insulin in Europe patients – Europe 30% 100% 80% 20% 60% 40% 10% 20% 0% 0% 2000 2002 2004 2000 2002 2004 Intensive Conventional Source: Roper Starch 2004 42
Slide 43: Novo Nordisk is the only company offering the full range of analogues
Novo Nordisk is the only company offering the full range of analogues Analogue s supporte d by strong device Convenience portfolio Meeting physiological need for control 43
Slide 44: Novo Nordisk offers the optimal insulin
Novo Nordisk offers the optimal insulin … Convenience-based treatment Intensified treatment NovoMix® 30 - The ideal starter insulin Levemir® - The ideal basal insulin Percentage of patients Mean prandial blood 27 # of events per year with HbA1c < 7% glucose increment 80% 140 129 66% 120 Hypoglycaemi
Slide 45: … in all segments
… in all segments With small differences in label, the % of patients feeling device delivery system is very important will result in better compliance Claims NovoLog®/ Humalog Apidra NovoRapid® 74 Pump use √ √ √ Type 2 pump data √ No data No data Predictability vs HI *) √ √ No data Twice as fast as
Slide 46: Solid insulin market growth - volume
Solid insulin market growth - volume Market size Growth rates Novo Nordisk market share Market Novo Nordisk USA 1.7% 33% ▲ 39% 10.4% Europe 6.4% 51% 5.6% 58% - Japan 7.7% 75% - 5% 7.2% 4.5% World 49% ▲ 100% 7.2% Note: Wal*Mart figures not included. Market size and share as MAT Q3 2004 and growth as
Slide 47: European analogue conversion - NovoRapid®
European analogue conversion - NovoRapid® Analogue penetration Short-acting segment Share of short-acting segment 30% Humalog 25% Human insulin 20% 15% NovoRapid® 45% 10% Analogues 5% 21% 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 47
Slide 48: European analogue conversion - NovoMix®
European analogue conversion - NovoMix® 30 Analogue penetration Premixed segment Share of premixed segment 15% Human insulin 10% Humalog Mix 25 5% 20% NovoMix® 2% Analogues 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 48
Slide 49: US analogue conversion - NovoLog®
US analogue conversion - NovoLog® Analogue penetration Short-acting segment Share of short-acting segment 70% 60% Humalog 50% Human insulin 63% 40% 30% 33% 20% Analogues NovoLog® 10% 0% Q1 Q2 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 49
Slide 50: US analogue conversion - NovoLog® Mix 70/30
US analogue conversion - NovoLog® Mix 70/30 Analogue penetration Premixed segment Share of premixed segment 30% 25% Humalog Mix 25 Human insulin 20% 15% 10% 25% NovoLog® Mix 5% 0% 70/30 Analogues 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 50
Slide 51: Insulin segmentation - Europe and the US
Insulin segmentation - Europe and the US Europe US 60% 60% 50% 50% 40% 40% 30% 30% 20% Long-acting 20% Long-acting Premix Premix 10% 10% Short-acting Short-acting 0% 0% Q1 Q3 Q1 Q3 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 51
Slide 52: The insulin business case
The insulin business case Improving convenience, compliance and control Disposables Durables Vials Volume growth drivers: • Epidemic growth Insulin analogues • Increased life expectancy • Increasing awareness leading to Human increasing diagnosis rate insulin • Earlier switches from tablets to insul
Slide 53: FVIIa/NovoSeven® - a unique mechanism of action
NovoSeven® FVIIa/NovoSeven® A bleeding episode Tissue factor Faster haemostasis leads to • Fewer transfusions / transfusion- free surgery • Reduced rebleeding • Faster recovery • Reduced morbidity and mortality - a unique mechanism of action • Improved quality of life 53
Slide 54: NovoSeven® - expanding into general haemostasis
NovoSeven® - expanding into general haemostasis Congenital clotting disorders Bleedings in High single-dose Trauma emergencies FVII deficiency Intracerebral Acquired haemorrhage Prophylaxis haemophilia TBI Glanzmann’s UGI Variceal Orthopaedic bleedings surgery Liver transplantation Cardiac surgery H
Slide 55: Leveraging our core competences
Leveraging our core competences Commer- Research and development Production cialisation • Protein capabilities from • A leading protein • Protein leadership laboratory bench to large-scale producer • Significant insight production • Production track into management of • Leader within protein deliver
Slide 56: Structured business model
Structured business model Target Commer- identification Research Development cialisation and validation Novo Nordisk or sourcing from biotech and academia Novo Nordisk Novo Nordisk Novo Nordisk Diabetes Novo Nordisk Haemostasis and Inflammation pharma partner Cancer Novo Nordisk Novo Nordisk and and
Slide 57: Leveraging our core competences
Leveraging our core competences Deciding which new areas to pursue: - based on competences and unmet need 1. Insight into the biological disease mechanisms 2. Therapeutic advantage of protein over NCE 3. Unmet need justifies early stage R&D project 4. Strong IP platform can be established 5. Disease
Slide 58: Leveraging our core competences
Leveraging our core competences Immunotherapy of cancer and inflammation fulfils the criteria 1. Novo Nordisk expertise in immunological research (linked to type 1 diabetes) 2. NCEs generally lack efficacy or selectivity 3. Significant need: fatal or debilitating diseases 4. Rich in patentable prote
Slide 59: Leveraging our core competences
Leveraging our core competences Key observations • Biotech platform explored within immunotherapy • R&D networks established Diabetes • Eight targets outside established areas being investigated Cancer – One in phase 1/2 and seven in preclinical phase Haemostasis – # of targets expected to increase
Slide 60: HRT – flattening out
Million DKK 0 100 200 300 400 500 Q1 2002 HRT sales development HRT – flattening out Q4 -8% 2004 Key observations • Sales declined by 4% in local currencies in the fourth quarter • Growth of 17% in local currencies for full year 2004 • Sales positively impacted by the change in distribution set-up i