Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — Non-Deal Roadshow (2006)
76 slides from Novo Nordisk A/s Class B's roadshow presentation, 2006
Slide 1: A case for socially responsible business: a focused healthcare company
A focused A case healthcare for socially company responsible business SRI presentation – Full year 2005
Slide 2: 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 3: Agenda
Agenda • Highlights 2005 and strategic priorities • The Novo Nordisk Way – embedding the Triple Bottom Line • TBL programmes – business cases • changing diabetes • people strategy • business ethics • climate strategy • Challenges and emerging issues 2
Slide 4: Highlights 2005
Highlights 2005 Market development: • Sales growth driven by insulin analogues: +62% as reported • NovoSeven® growth continues: +16% as reported • Growth hormone showed strong performance: +20% as reported Research and development: • Levemir® filed in Japan in November 2005 • Liraglutide phase 2b st
Slide 5: Highlights 2005
Highlights 2005 Economics: • Job creation: 1,735 new positions globally (22,007 positions) • Contribution to society: Sales were 2.2% of Danish GDP and 4.8% of Danish exports • Economic growth: 74,200 jobs created globally in supply chain Environment: • EPI improvements: 7% for water, 5% for energy
Slide 6: Key products continue to drive growth
Key products continue to drive growth – full year 2005 Sales as reported Growth analysis Other Local currencies Growth Share of Growth hormone 4% 6% growth therapy +20% 8% Diabetes care Insulin analogues 61% 62% +17% Human insulin and 3% 10% NovoSeven® 15% insulin-related sales +16% OAD 3% 1% Diabet
Slide 7: Sales by region
Sales by region - full year 2005 Sales as reported Growth analysis Japan & Oceania +10% Europe Local Growth Share of +8% currencies growth 14% Europe 8% 21% International Operations North America 27% 45% +25% 18% 40% International 22% 24% Operations Japan & Oceania 11% 10% 28% North America +27% Sal
Slide 8: Financial results
Financial results DKK million Full year 2005 Fourth quarter 2005 2004 % change 2005 2004 % change Sales 33,760 29,031 16 9,426 7,944 19 Operating profit 8,088 6,980 16 1,923 1,855 4 Net financials 146 477 (69) (236) 285 221 Profit before tax 8,234 7,457 10 1,687 2,140 (21) Net profit 5,864 5,013 17
Slide 9: New long-term financial targets
New long-term financial targets Long-term financial targets In % 2001 2002 2003 2004 2005 Old New targets targets Operating profit growth 15.0 9.6 8.4 8.7 15.9 15 15 Operating margin 23.1 23.8 24.6 24.0 24.0 25 25 Cash to earnings* 5.1 12.1 79.6 85.3 82.4 60 70 ROIC 22.7 20.5 19.5 20.6 24.7** 25 30
Slide 10: Strategy
Strategy Focus areas Competencies Strategic position Insulin Drug delivery and protein expertise 1. Diabetes Liraglutide Maintain leadership Novel OADs Global specialist reach NovoSeven® 2. Biopharmaceuticals rFXIII - existing areas Expand franchise Growth hormone HRT 3. Biopharmaceuticals Oncology
Slide 11: TBL strategy
TBL strategy Focus areas Near-term priorities Strategic position Talent mgt. Connecting business & responsibility 1. People Mobility & rewards Build leadership Embeddding TBL principles Diversity & EO Globalisation 2. Responsibility Business ethics Proactive risk and Access to health opportunities m
Slide 12: The Novo Nordisk Way
The Novo Nordisk Way – embedding the Triple Bottom Line 11
Slide 13: Corporate governance framework
Corporate governance framework 12
Slide 14: Novo Nordisk's vision
Novo Nordisk’s vision We will be the world’s leading diabetes care company We will offer products and services in other areas where we can make a difference We will achieve competitive business results A job here is never just a job Our values are expressed in all our actions 13
Slide 15: The Triple Bottom Line
The Triple Bottom Line - a broad business principle 14
Slide 16: Building a sustainable business
Building a sustainable business – a learning process Level of integration Environmental management Strategy revisited Health and safety, bioethics Full business integration Social responsibility (incl. human rights, Embedding in the organisation access to health and diversity) Business Stakeholder d
Slide 17: Integrated and systematic risk management
Integrated and systematic risk management 16
Slide 18: Progress and change
Progress and change - Diabetes 2020 scenarios Progress • Major scientific progress to manage diabetes/pre-diabetes • Self-care becomes the standard – supported by technology, nurses and other health workers • Healthcare becomes a multi-tier system • Pharmaceutical business model intact Change • Heal
Slide 19: Stakeholder engagement strategy
Stakeholder engagement strategy Vision 1. Frame 3. Support Monitor issues Engage with & spot trends stakeholders to 2. Engage reach more sustainable solutions Build & maintain 5. Report relationships 4. Achieve with stakeholders Account for Drive & embed performance long term and convey thinking pos
Slide 20: Changing diabetes
Changing diabetes - a medical aspiration Improve glycemic control for every person with diabetes Become the partner of choice Become the best place to work Ultimately we will be The undisputed leader in diabetes The company that defeats diabetes 19
Slide 21: TBL programmes – business cases
TBL programmes – business cases 20
Slide 22: A business case for social responsibility
A business case for social responsibility • Improved care • Innovation • Healthier • Investments populations Profitable • Operational • Socio-economic excellence company equity • Management Able to capacity invest in society Brand • Good governance • Gaining aware- leadership • Improved risk ness/ m
Slide 23: We will be the world's leading diabetes care company
We will be the world’s leading diabetes care company - Business case #1 Our aspiration is to defeat diabetes by finding better methods of diabetes prevention, detection and treatment. We will work actively to promote collaboration between all parties in the health care system in order to achieve our
Slide 24: Diabetes – an emerging epidemic
Diabetes – an emerging epidemic - 333 million people with diabetes expected by 2025 The situation • Epidemic growth – life-style related # of people with diabetes (million) 300 • Increased life expectancy 2000 250 2025 200 The solutions • Increasing awareness → 150 increasing diagnosis rate 100 50 •
Slide 25: Access to health in developing countries
Access to health in developing countries - a partner to people with diabetes • National Diabetes Programmes • 267 activities • 65 countries • Pricing policy for LDCs Awareness • offered in 50 Education Partnerships • sold to 32 Solutions • World Diabetes Campaigns Foundation Results • 57 projects •
Slide 26: A two-pronged strategy
A two-pronged strategy - improved control …. • Earlier diagnosis • Understanding the person behind the disease • Customised treatment – based on patient’s life-style • Reducing complications – improved blood sugar control 25
Slide 27: … and effective prevention
… and effective prevention - today, 1 billion people are overweight • Young Voices • Youth Panel • Oxford Health Alliance • Novo Nordisk School Challenge 26
Slide 28: Novo Nordisk's strategy for access to health
Novo Nordisk’s strategy for access to health WHO priorities Novo Nordisk’s response Development of national National Diabetes healthcare strategies Programme Development of National Diabetes healthcare capacity Programme Best possible pricing Best possible pricing scheme in LDCs Additional funding W
Slide 29: US National changing diabetes program
US National changing diabetes program • The US represents 50% of the world’s global sales of pharmaceutical products • Novo Nordisk Inc achieved largest insulin market share in 2005 (by volume 39%) • The US is Novo Nordisk’s fastest growing market • The sales force has grown six-fold since 2001 • …
Slide 30: US diabetes prevalence is increasing
US diabetes prevalence is increasing Americans diagnosed with diabetes Key observations • Diabetes now affects nearly 16 21 million Americans % 14.0 14 GR :5 • More than 6 million are not CA aware that they have diabetes 12 10.5 Millions 10 • In 2005, 1.5 million people will 7.8 be newly diagnosed w
Slide 31: Diabetes prevalence is tracking obesity
Diabetes prevalence is tracking obesity Obesity prevalence 1994 Diabetes prevalence 1994 Analogues 42% <10-14% <15-19% ≥20% <4% <4-6% >6% Notes: Rates reflect prevalence among adults. Obesity is defined as BMI ≥ 30. Source: Centers for Disease Control and Prevention (CDC) 30
Slide 32: Diabetes prevalence is tracking obesity, cont'd
Diabetes prevalence is tracking obesity, cont’d Obesity prevalence 2004 Diabetes prevalence 2004 Analogues 42% <10-14% <15-19% ≥20% <4% <4-6% >6% Notes: Rates reflect prevalence among adults. Obesity is defined as BMI ≥ 30. Source: Centers for Disease Control and Prevention (CDC) 31
Slide 33: Diabetes is a huge cost to society
Diabetes is a huge cost to society - the case of the US • Diabetes costs $132 billion/year* = 10% of health care spending – <7% are drugs • 25% of all Medicare budget • Individual healthcare costs for diabetes USD 13,243/year * – 2.4 times higher than non-diabetes • Better glycemic control can lead
Slide 34: Gaining strong position in the US market
Gaining strong position in the US market US market share 80% (volume) 70% 60% 50% Novo Nordisk Eli Lilly 40% Sanofi-Aventis 30% 20% 10% 0% Q1 Q3 2002 2005 Source: IMS/BW 33
Slide 35: International Operations – a current and future growth engine
International Operations – a current and future growth engine… International Operations sales development Key observations Index local currencies • Growth in the fourth quarter of 250 7% in local currencies, 15% as 28 % reported : A GR 200 C • Growth is driven by insulin analogues and human insulin
Slide 36: … driven by China
… driven by China China sales development Key observations Index local currencies • Sales of DKK 1 billion in 2005 600 • Well-established relationships with 500 authorities and healthcare organisations 56% 400 : • Rapidly expanding organisation AGR C 300 • Manufacturing expansion to be completed in
Slide 37: Diabetes in China
Diabetes in China – a brake to economic growth • 25-30 million Chinese have diabetes – 70-80% are undiagnosed – Up to 1.2 million people use insulin • 45-100 million projected by 2020 • Poverty rate down from 31% (1990) to 10% (2005) (<USD 1 a day) • Increasing income inequality • Life-style related
Slide 38: Novo Nordisk in China
Novo Nordisk in China - driving better care • Awareness & education programmes reach >1.1 million people – NovoCare Club >300,000 members – >100 free diagnosis clinics – 45 mobile clinics in local communities • Partnership with Ministry of Health: National Diabetes Management Programme – 3,500 healt
Slide 39: Novo Nordisk is a clear leader within the Chinese insulin market
Novo Nordisk is a clear leader within the Chinese insulin market MDKK Insulin Value Market Share Development 100% 80% 75.8 % 60% 40% 20% 15.5 % 3.8 % 2.6 % 0% 1.0 % Q1 Q2 Q2 Q3 Q1 Q2 Q4 Q3 Q4 Q1 Q4 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q3 Q1 Q3 Q2 2000 2001 2002 2003 2004 2005 NOVO NORDISK LILLY WANBANG BIOCHEMIC
Slide 40: A job here is never just a job
A job here is never just a job - Business case #2 We are committed to being there for our customers whenever they need us. We will be innovative and effective in everything we do. We will attract and retain the best people by making our company a challenging place to work. 39
Slide 41: People strategy: Business and values
People strategy: Business and values Global job Lighthouse & rating & Greeenhouse remuneration talent Recruit- Global per- pools ment formance Globalisation system Talent (3P) New Organi- sational Leader- development design ship courses Mobility Training for all Diversity employees 40
Slide 42: Social impacts: People
Social impacts: People Performance indicators: How well do we live up to the 2003/4 2005 Novo Nordisk values? ’Social and environmental issues are important to the future of the 4.2 4.2 company’ ’My manager’s behaviour is consistent with Novo 4.0 4.0 Nordisk’s values’ Performance indicators: A chall
Slide 43: Our values are expressed in all our actions
Our values are expressed in all our actions - Business case #3 Decency is what counts. Every day we strive to find the right balance between compassion and competitiveness, the short and the long term, self and commitment to colleagues and society, work and family life. 42
Slide 44: Business ethics policy
Business ethics policy - in support of Global Compact “In striving to practice a high standard of business ethics, there will always be dilemmas and challenges which we will need to address in our daily operations” Lars Rebien Sørensen, president and CEO of Novo Nordisk Raising Balanced Training Adv
Slide 45: Business ethics policy
Business ethics policy • In Novo Nordisk we will conduct our business according to a high ethical standard, living our values and protecting Novo Nordisk’s reputation • This means that we will: – Adhere to the principles of the UN Convention against Corruption – Conduct business with integrity, hone
Slide 46: We will achieve competitive business results
We will achieve competitive business results - Business case #4 Our focus is our strength. We will stay independent and form alliances whenever they serve our business purpose and the cause we stand for. 45
Slide 47: A strategy to address climate change
A strategy to address climate change CO2 emissions 630,000 t Without cLEAN™ ~ Without CO2 strategy 280,000 t With cLEAN™ Without CO2 strategy 350,000 t ~ With cLEAN™ >158,000 t With CO2 strategy 10% 210,000 t Target reduction 2004 CO2 line 192,000 t by 2014 2004 2006 2008 2010 2012 2014 46
Slide 48: Options for green energy supplies
Options for green energy supplies Denmark: Wind turbines off shore Industrial wind turbine park From gas to bio fuel Koriyama: Wind turbines Clayton: From gas to bio fuel Green electricity Montes Claros: From heavy fuel to bio fuel 47
Slide 49: Challenges and emerging issues
Challenges and emerging issues 48
Slide 50: Addressing the key challenges
Addressing the key challenges • Breakthrough innovation • Access to health for everyone • Standards of business ethics into action • Implications of globalisation • Public policy and advocacy • Road testing human rights • Global standards and cultural diversity • Transparent relationships, eg with s
Slide 51: Globalisation and its implications
Globalisation and its implications - 2,500 new jobs outside Denmark; 800 in Denmark Global expansion, growing demands for competitiveness and a need for visible market presence provide both challenges and opportunities Challenges Opportunities Concerns about future Jobs and boost to local jobs secur
Slide 52: Responding to emerging issues
Responding to emerging issues Product responsibility • Patient safety • Patients’ rights • Practices for post-marketing surveillance • Health needs with low commercial viability • Product stewardship Regulatory framework • Evolving regulatory environment • Convergence of reporting standards 51
Slide 53: Poised for sustained growth
Poised for sustained growth - concluding remarks Key growth drivers going forward • Leadership in diabetes care with full portfolio of insulin analogues • NovoSeven® expanding into critical bleeding Balancing • Building presence within oncology and inflammation growth and value • Expanding the prese
Slide 54: Poised for sustained growth, cont'd
Poised for sustained growth, cont’d - concluding remarks Key drivers for sustainable business development • Social leadership approach aligned with core business • Vision, strategy and governance reinforces integrated approach Sustainable • Proactive management of risks development and opportunities
Slide 55: Investor information
Investor information Share information Investor Relations contacts Novo Nordisk A/S Novo Nordisk’s B shares are Investor Relations Novo Allé, DK-2880 Bagsværd listed on the stock exchanges Fax (+45) 4443 6633 in Copenhagen and London. Mogens Thorsager Jensen Tel: (+45) 4442 7945 Its ADRs are listed
Slide 56: Appendices
Appendices novo nordisk” 55
Slide 57: 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 β-Cell function • The number of type 2 patients using insulin is outgrowing the number of Insulin type 1 patie
Slide 58: Novo Nordisk is the only company offering the full range of insulin analogues
Novo Nordisk is the only company offering the full range of insulin analogues Analogues supported by strong device portfolio Convenience Meeting physiological need for control 57
Slide 59: Insulin analogues – solid analogue growth continues
Insulin analogues - solid analogue growth continues Analogue sales development Analogue sales split - 2005 Levemir® DKK 0.5bn NovoRapid® 2,400 +67% 7% DKK 4.1bn NovoMix® DKK 2.7bn 2,000 DKK million 1,600 37% 57% 1,200 800 400 0 Q1 Q4 Sales of DKK 7.3 billion 2002 2005 (+61% growth in local currencie
Slide 60: A continued increase in analogue market share
A continued increase in analogue market share Novo Nordisk’s analogue Analogue penetration market share 40% 35% 30% Analogues 42% 25% 7% 20% 15% Human insulin 10% 5% 0% Q1 Q3 Q1 Q3 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 59
Slide 61: Growth in Novo Nordisk's insulin franchise looks set to continue
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: 10.8%* 40% DKK 38.9 bn GR CA 30% Novo Nordisk DKK 24.5 bn Eli Lilly 20% Sanofi-Aventis tMU 212 tMU 162 10% 0% MAT
Slide 62: Solid insulin market growth
Solid insulin market growth - Novo Nordisk market leadership Market size Growth rates Novo Nordisk market share Market Novo Nordisk US 16.3% 38% ↑ 40% 5.1% Europe 6.4% 6.2% 58% → 50% Japan 5.9% 74% → 5% 7.1% World 9.3% 51% ↑ 100% 5.8% Note: Volume data. Wal-Mart figures not included. Market size and
Slide 63: European analogue market share
European analogue market share Novo Nordisk’s European Novo Nordisk’s share of long- analogue market share acting analogues in Europe 45% 18% 40% 16% 35% 14% 30% 12% 25% 10% 20% 8% 15% 6% 10% 4% 5% 2% 0% 0% Q1 Q3 March November 2004 2005 2000 2005 Note: Quarterly data, volume figures Note: Monthly d
Slide 64: European analogue conversion – NovoRapid
European analogue conversion - NovoRapid® Analogue penetration short-acting segment Share of short-acting segment 30% Humalog 25% Human insulin 20% NovoRapid® 15% 51% 10% Analogues 5% 0% Q1 Q3 Q1 Q3 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 63
Slide 65: European analogue conversion – NovoMix
European analogue conversion - NovoMix® 30 Analogue penetration premixed segment Share of premixed segment 20% 15% Human insulin 10% Humalog Mix 25 NovoMix® 30 5% 26% Analogues 0% Q1 Q3 Q1 Q3 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 64
Slide 66: European analogue conversion – Levemir
European analogue conversion - Levemir® Analogue penetration Novo Nordisk’s share of long- Long-acting segment acting analogues in Europe 18% 16% 14% Human insulin 12% 10% 8% 6% 39% 4% 2% Analogues 0% Q1 Q3 March November 2004 2005 2000 2005 Note: Quarterly data, volume figures Note: Monthly data, v
Slide 67: 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 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 66
Slide 68: The US: Adult diabetes prevalence at 10%
The US: Adult diabetes prevalence at 10% Estimated diabetes prevalence by age group Key observations 25% • The risk of diabetes increases 20.9% with age 20% • Two-thirds of people with diabetes die from a heart attack or stroke 15% • Diabetes is the sixth leading cause 10.1% of death in the US 10% •
Slide 69: NovoSeven – growth continues
NovoSeven® - growth continues NovoSeven® sales development Key observations • Growth in fourth quarter of 13% +19% in local currencies, 19% as 1,400 reported 1,200 • North America the primary 1,000 DKK million growth driver 800 • Investigational use continues to 600 add to growth 400 200 0 Q1 Q4 200
Slide 70: NovoSeven – a unique mechanism of action
NovoSeven® - a unique mechanism of action FVIIa/NovoSeven® Faster haemostasis leads to Tissue factor • Fewer transfusions / transfusion- free surgery • Reduced re-bleeding • Faster recovery • Reduced morbidity and mortality • Improved quality of life A bleeding episode 69
Slide 71: Growth hormone – progress continues
Growth hormone - progress continues Norditropin® sales development Key observations 800 +20% • Growth in fourth quarter of 18% in local currencies, 20% as 700 reported 600 • Growth mainly driven by North DKK million 500 America and Europe 400 • Increased penetration of the 300 NordiFlex® prefilled d
Slide 72: Biosimilars compete in a declining segment
Biosimilars compete in a declining segment World (IMS) analogue conversion, vol. Analogues 42% Patent protected Human insulin 2000 2005 2011 Notes: Quarterly data based on volume figures. From 2006 onwards it is estimated that 6% of the market will be converted each year and that volume will increas
Slide 73: Factors influencing competition within biologics
Factors influencing competition within biologics Relationships - Clinical & healthcare Advanced Complexity of regulatory professionals devices manufacturing processes and patients High barriers to entry Limited discounts to branded equivalents 72
Slide 74: R&D update – diabetes care
R&D update - diabetes care Compound Type Indication Phase Levemir® (insulin Insulin analogue Type 1+2 Launched in Europe detemir) US launch in Q2 2006 Filed in JP NovoMix® 50 and 70 Insulin analogue Type 1+2 Approved in EU Filed US Liraglutide (NN2211) GLP-1 analogue Type 2 Phase 3 start in Feb. 200
Slide 75: R&D update – biopharmaceuticals
R&D update - biopharmaceuticals Compound Indication Phase NovoSeven® Acquired haemophilia Filed* NovoSeven® Trauma Phase III NovoSeven® Intracerebral haemorrhage Phase III NovoSeven® Upper gastro-intestinal bleedings Phase II NovoSeven® Cardiac surgery (dose escalation) Phase II NovoSeven® Traumatic
Slide 76: Outlook 2006
Outlook 2006 • Sales growth expectations: • At least 10% in local currencies, and slightly higher measured in DKK • Operating profit growth expectations: Key currency rates DKK 2005 2006 Current • Around 10% in local currency excluding the per 100 average ytd avg rate* impact from non-recurring item