Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — Q1 2010 Earnings Presentation
55 slides from Novo Nordisk A/s Class B's earnings presentation, April 2010
Slide 1: Investor presentation First three months of 2010
Investor presentation Investor presentation First three months of 2010
Slide 2: Forward-looking statements
Investor presentation First three months of 2010 Slide no 2 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 2009 and Form 20-F, both filed with the SEC in Febr
Slide 3: Agenda
Investor presentation First three months of 2010 Slide no 3 Agenda • Highlights • Sales update • R&D update • Financials and outlook
Slide 4: Highlights and key events
Investor presentation First three months of 2010 Slide no 4 Highlights and key events Market development • Solid launch performance of Victoza® in the US and EU • Modern insulins drive robust sales growth of 9% (11% in local currencies) • North America and International Operations account for more t
Slide 5: New study doubles estimates for diabetes prevalence in China
Investor presentation First three months of 2010 Slide no 5 New study doubles estimates for diabetes prevalence in China New England Journal of Medicine: Development in estimates for 92 million Chinese diabetics Chinese diabetes prevalence 100 • The study is based on diabetes tests of a representati
Slide 6: Sales update
Investor presentation First three months of 2010 Slide no 6 Sales update
Slide 7: Proteins drive value growth in the global diabetes care market
Investor presentation First three months of 2010 Slide no 7 Proteins drive value growth in the global diabetes care market Global diabetes care market Global diabetes care by treatment class value market share OAD Insulin GLP-1 40 25% 23% 35 Total market: CAGR 10% Quarterly sales (bDKK) 20% 30 25 CA
Slide 8: Key products continue to drive growth
Investor presentation First three months of 2010 Slide no 8 Key products continue to drive growth – first three months of 2010 Sales as reported Growth analysis HRT Local currencies Growth Share of Norditropin ® +8% growth +5% 3% 8% Diabetes care Modern insulins 20% 69% NovoSeven® +11% Human insulin
Slide 9: North America drives sales growth
Investor presentation First three months of 2010 Slide no 9 North America drives sales growth - first three months of 2010 Sales as reported Growth analysis Japan & Korea -1% North America Local currencies Growth Share of +15% growth 8% International North America 21% 68% Operations +10% Europe 4% 1
Slide 10: Key elements of the US Health Care reform
Investor presentation First three months of 2010 Slide no 10 Key elements of the US Health Care reform Elements with financial impact from 2010 and 2011 Selected additional elements • From 2010 • Medical coverage for 32 million people • Increased mandated Medicaid rebate • Health insurance mandatory
Slide 11: Sustaining leadership position in an expanding insulin market
Investor presentation First three months of 2010 Slide no 11 Sustaining leadership position in an expanding insulin market World insulin market growth IMS world insulin market shares Novo Nordisk Sanofi-Aventis Eli Lilly Volume: 7.1% 70% DKK: 13.9% 60% GR 51% CA 50% 40% 30% DKK 71.6 DKK 37.3 23% 20%
Slide 12: Continued conversion to modern insulins drives value creation on the insulin market
Investor presentation First three months of 2010 Slide no 12 Continued conversion to modern insulins drives value creation on the insulin market Modern insulin penetration Modern insulin market shares Novo Nordisk Sanofi-Aventis Eli Lilly 70% 60% 60% 50% 46% 34% Modern insulin 40% 34% 30% 20% 20% Hu
Slide 13: Encouraging start for Victoza in the US
Investor presentation First three months of 2010 Slide no 13 Encouraging start for Victoza® in the US Victoza® share of GLP-1 Encouraging initial market (volume) uptake in the US ® ® Victoza TRx Victoza NRx 25% • Launched in February 2010 23% Share of GLP-1 market (Vol) • Pipeline filling related to
Slide 14: Solid progress of Victoza roll-out in EU
Investor presentation First three months of 2010 Slide no 14 Solid progress of Victoza® roll-out in EU German diabetes market UK diabetes market (value market share) (value market share) Victoza ® Exenatide GLP-1 all Victoza® Exenatide GLP-1 all 4% 5% 4.9% Diabetes market share (value) Diabetes mark
Slide 15: R&D update
Investor presentation First three months of 2010 Slide no 15 R&D update
Slide 16: Degludec: a more predictable insulin with less day to day variation
Investor presentation First three months of 2010 Slide no 16 Degludec: a more predictable insulin with less day to day variation Variation in effect on blood glucose of Degludec and Glargine based on phase 1 data Increasing risk of hypoglycaemia Lantus ® Glargine Effect on blood glucose Updated slid
Slide 17: DegludecPlus: The predictability and longevity of degludec with a bolus boost
Investor presentation First three months of 2010 Slide no 17 DegludecPlus: The predictability and longevity of degludec with a bolus boost DegludecPlus vs. insulin glargine and BIAsp simulation based on phase 1 data DegludecPlus Glargine 0.6 U/kg BIAsp 30 8 GIR (mg/kg/min) 6 Rapid 4 component 2 Basa
Slide 18: Begin and Boost are designed to explore Degludec and DegludecPlus
Investor presentation First three months of 2010 Slide no 18 Begin™ and Boost™ are designed to explore Degludec and DegludecPlus in broad settings Insulin treatment initiation Insulin treatment intensification Type 1 • Degludec OD + NovoRapid® TID vs. diabetes glargine OD + NovoRapid® TID BEGIN™ • D
Slide 19: R&D pipeline: Diabetes and obesity
Investor presentation First three months of 2010 Slide no 19 R&D pipeline: Diabetes and obesity Compound Type Indication Status (phase) 1 2 3 Filed Appr. Victoza® Once-daily GLP-1 analogue Type 2 Degludec Ultra LA basal insulin Type 1+2 DegludecPlus Ultra LA basal insulin with a bolus boost Type 1+2
Slide 20: R&D pipeline: Haemostasis
Investor presentation First three months of 2010 Slide no 20 R&D pipeline: Haemostasis Compound Type Indication Status (phase) 1 2 3 Filed Appr. NN1841 rFXIII Congenital FXIII deficiency NN7008 rFVIII Haemophilia A NN1731 FA rFVIIa analogue Haemophilia w. inhibitors NN7128 LA rFVIIa derivative Haemo
Slide 21: R&D pipeline: Other biopharmaceuticals
Investor presentation First three months of 2010 Slide no 21 R&D pipeline: Other biopharmaceuticals Compound Type Indication Phase 1 2 3 Filed Appr. NN8630 LA hGH GHD & AGHD Vagifem® Low Dose Topical product Menopausal symptoms Anti-IL20 Monoclonal antibody PSA / RA Anti-C5aR Monoclonal antibody RA
Slide 22: Financials and outlook
Investor presentation First three months of 2010 Slide no 22 Financials and outlook
Slide 23: Financial results
Investor presentation First three months of 2010 Slide no 23 Financial results DKK million Q1 2010 Q1 2009 change Sales 13,674 12,498 9% Gross profit 10,984 9,990 10% Gross margin 80.3% 79.9% Sales and distribution costs 3,984 3,844 4% Percent of sales 29.1% 30.8% Research and development costs 2,13
Slide 24: Solid gross margin development key driver for financial achievements since 2005
Investor presentation First three months of 2010 Slide no 24 Solid gross margin development key driver for financial achievements since 2005 Gross margin improvement Key observations 82% Annual average • Solid underlying gross margin 80.3 improvement of 100 basis points 80% 79.6 compared to first qu
Slide 25: Key currencies above 2009 average
Investor presentation First three months of 2010 Slide no 25 Key currencies above 2009 average Annual impact on operating 650 650 profit of a 5% movement in Spot rates Quarterly average Annual average currency (DKK million) 2010 USD/DKK 600 600 USD 580 JPY 150 550 550 GBP 80 CNY 100 500 500 CAD 40 4
Slide 26: Financial guidance for 2010
Investor presentation First three months of 2010 Slide no 26 Financial guidance for 2010 Key currency rates • Sales growth expectations: DKK 2009 2010 Current per 100 average average* rate* • Now 7-10% in local currencies USD 536 541 552 • Now around 3 percentage points higher as reported JPY 5.73 5
Slide 27: Closing remarks
Investor presentation First three months of 2010 Slide no 27 Closing remarks Solid market performance Promising pipeline • 10% annual diabetes market growth • Victoza® launch expands product driven by diabetes prevalence offering for early stage type 2 diabetes • 51% insulin market share with leader
Slide 28: Investor information
Investor presentation First three months of 2010 Slide no 28 Investor information Share information Investor Relations Novo Nordisk’s B shares are listed contacts on the stock exchange in Novo Nordisk A/S Investor Relations Copenhagen. Its ADRs are listed on Novo Allé, DK-2880 Bagsværd the New York
Slide 29: Appendix
Investor presentation First three months of 2010 Slide no 29 Appendix 1. Strategy 2. Financials 3. Performance of key products 4. R&D 5. Detailed market shares
Slide 30: Appendix 1: Strategy
Investor presentation First three months of 2010 Slide no 30 Appendix 1: Strategy
Slide 31: Sustainability of protein based franchises
Investor presentation First three months of 2010 Slide no 31 Sustainability of protein based franchises Share of market Animal Human Modern New generation 1st generation 2nd generation 3rd generation • Degludec Insulin • NovoMix® • NovoRapid® • DegludecPlus • New concepts • Levemir® tim e Share of m
Slide 32: Novo Nordisk's corporate strategy
Investor presentation First three months of 2010 Slide no 32 Novo Nordisk’s corporate strategy Indications Compounds/Capabilities Strategic focus Insulin • Diabetes Expand leadership Expand leadership GLP-1 Drug delivery and protein expertise Global commercial infrastructure GLP-1 • Obesity/pre-diab
Slide 33: Insulin leadership position in all regions
Investor presentation First three months of 2010 Slide no 33 Insulin leadership position in all regions Global diabetes pandemic driven by International Operations North America Europe Market share 43% Market share 54% People with diabetes: People with diabetes: 2010: 30 mill. 2010: 35 mill. 2030: 4
Slide 34: GLP-1 will explore virgin territory between OADs and insulins
Investor presentation First three months of 2010 Slide no 34 GLP-1 will explore virgin territory between OADs and insulins World DKK MAT market billion growth OAD 77 14% OAD Insulin Insulin 72 15% GLP-1 4 16% GLP-1 Note: Absolute data represent MAT February 2010 and growth data represent MAT Februar
Slide 35: There is a need for better treatment options to bring blood glucose levels in control
Investor presentation First three months of 2010 Slide no 35 There is a need for better treatment options to bring blood glucose levels in control Major diabetic complications Diabetes control 100% HbA1c > 7% 56% 44% HbA1c < 7% Prevalence Direct costs related to T2DM 7% Antidiabetic drugs Retinopath
Slide 36: Appendix 2: Financials
Investor presentation First three months of 2010 Slide no 36 Appendix 2: Financials
Slide 37: Long term financial targets: Operating profit growth and operating margin
Investor presentation First three months of 2010 Slide no 37 Long term financial targets: Operating profit growth and operating margin Operating profit growth Operating margin Current long term financial target Current long term financial target 25% 35% 30% 20% 25% 15% 20% 15% 10% 15.9 12.7 12.6 23.
Slide 38: Long term financial targets: Return on invested capital and cash to earnings
Investor presentation First three months of 2010 Slide no 38 Long term financial targets: Return on invested capital and cash to earnings Cash to earnings Return on invested capital (three years’ average) Current long term financial target Current long term financial target 60% 120% 50% 100% 40% 80%
Slide 39: Cash return to shareholders
Investor presentation First three months of 2010 Slide no 39 Cash return to shareholders Dividend and payout ratio Share repurchase programme Dividend (DKK) Payout ratio DKK billion Dividend proposed for 2009 8 8 45% DKK 19 billion 7.5 Dividend 7 7 6.5 Payout ratio 40% 6 6 5 5 4.8 4.7 35% 4 4 30% 3.
Slide 40: Appendix 3: Performance of key products
Investor presentation First three months of 2010 Slide no 40 Appendix 3: Performance of key products
Slide 41: Modern insulins exhibit steady penetration
Investor presentation First three months of 2010 Slide no 41 Modern insulins exhibit steady penetration Global market share of total segment Modern insulin sales as reported NovoRapid® NovoMix®30 Levemir® Levemir® DKK 1.5bn 50% NovoRapid® +31% DKK 2.6bn +15% 40% 26% 30% 45% NovoMix® 20% DKK 1.7bn 29
Slide 42: Solid NovoSeven sales
Investor presentation First three months of 2010 Slide no 42 Solid NovoSeven® sales NovoSeven® sales development Key observations • Sales growth YTD in 2010 of 6% as 2.000 12% reported and 8% in local currencies 1.800 R: CAG 1.600 • Growth driven by North America 1.400 • The sales growth for NovoSev
Slide 43: Strong sales growth with Norditropin
Investor presentation First three months of 2010 Slide no 43 Strong sales growth with Norditropin® Norditropin® development Key observations 1.200 • Sales growth YTD in 2010 of 5% as % reported and 7% in local currencies R : 13 1.000 CAG • Growth is driven by North America and International Operatio
Slide 44: Appendix 4: R&D
Investor presentation First three months of 2010 Slide no 44 Appendix 4: R&D
Slide 45: BEGIN: Degludec clinical development programme
Investor presentation First three months of 2010 Slide no 45 BEGINTM: Degludec clinical development programme Estimated timeline for patient treatment for clinical programme NN1250-3579: 12 mth vs. Lantus® in 1000 type 2 diabetes NN1250-3582: 12 mth vs. Lantus® in 1000 type 2 diabetes NN1250-3583 :
Slide 46: BOOST: DegludecPlus clinical development programme
Investor presentation First three months of 2010 Slide no 46 BOOSTTM: DegludecPlus clinical development programme Estimated timeline for patient treatment for clinical programme NN5401-3594: 6 mth vs. Levemir® in 528 type 1 diabetes NN5401-3592: 6 mth vs. NovoMix®30 in 450 type 2 diabetes NN5401-359
Slide 47: LEAD study comparing Victoza and exenatide treatment
Investor presentation First three months of 2010 Slide no 47 LEAD 6 study comparing Victoza® and exenatide treatment Reduction in blood Proportion of subjects with glucose by week and treatment nausea by week and treatment Victoza® -> Victoza® Victoza® 9,0 Exenatide -> Victoza® Exenatide Proportion
Slide 48: NN1731: Attractive profile of the next generation factor seven, rFVIIa analogue
Investor presentation First three months of 2010 Slide no 48 NN1731: Attractive profile of the next generation factor seven, rFVIIa analogue Velocity (mm*100/sec) 20 Severe haemophilia A + rFVIIa 2 µg/mL + NN1731 2 µg/mL Healthy male • NN1731 has been found to 15 induce a faster rate of thrombin for
Slide 49: Appendix 5: Detailed market share slides
Investor presentation First three months of 2010 Slide no 49 Appendix 5: Detailed market share slides
Slide 50: Global insulin volume growth above 5%
Investor presentation First three months of 2010 Slide no 50 Global insulin volume growth above 5% Regional volume shares Regional insulin volume growth of insulin market IO North America World IO North America Europe Japan & Korea Europe Japan & Korea 25% 100% 16% 20% 80% 5% 15% 60% 43% 10% 40% 5%
Slide 51: Still a significant potential for Novo Nordisk on the US modern insulin market
Investor presentation First three months of 2010 Slide no 51 Still a significant potential for Novo Nordisk on the US modern insulin market US insulin market by segments US modern insulin market shares Modern insulin penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration 30 80% 60% CAGR v
Slide 52: Maintaining the solid leadership position on the European modern insulin market
Investor presentation First three months of 2010 Slide no 52 Maintaining the solid leadership position on the European modern insulin market EU insulin market by segments EU modern insulin market shares Modern insulin penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration CAGR volume: 5.1
Slide 53: Stable leadership position on the rapidly growing Chinese insulin market
Investor presentation First three months of 2010 Slide no 53 Stable leadership position on the rapidly growing Chinese insulin market China insulin market by segments China insulin market shares Modern insulin penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration Shanghai Fosun Tonghua D
Slide 54: US modern insulin conversion and product performance
Investor presentation First three months of 2010 Slide no 54 US modern insulin conversion and product performance Share of short-acting segment Share of pre-mixed segment Share of long-acting segment Share of market converted: 75% Share of market converted: 41% Share of market converted: 78% 50% 50%
Slide 55: European modern insulin conversion and product performance
Investor presentation First three months of 2010 Slide no 55 European modern insulin conversion and product performance Share of short-acting segment Share of pre-mixed segment Share of long-acting segment Share of market converted: 66% Share of market converted: 53% Share of market converted: 66% 5