Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — FY2005 Earnings Presentation
54 slides from Novo Nordisk A/s Class B's earnings presentation, 2006
Slide 1: A focused healthcare company
A focused A focused healthcare health company care company Investor 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 & strategy • Sales update • Low impact from biosimilars • R&D update • Financials 2
Slide 4: Highlights from full year 2005
Highlights from full year 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 • Liraglut
Slide 5: 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 6: Sales update
Sales update 5
Slide 7: 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 8: 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 9: 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 8
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 16: North America - regional sales update
North America - regional sales update North America sales development Key observations Index local currencies • Strong growth in fourth quarter of 48% as reported, 36% in local 250 % currencies : 30 GR • Q4 2004 affected by de-stocking 200 CA • Growth driven by insulin 150 analogues through market g
Slide 17: US diabetes performance
US diabetes performance Novo Nordisk’s US insulin US insulin (vol) market sales development share development Index 80% local currencies 70% 350 60% 300 % : 41 50% Novo Nordisk A GR 250 C Eli Lilly 40% Sanofi-Aventis 200 30% 150 20% 100 50 10% 0 0% Q1 Q4 Q1 Q3 2002 2005 2002 2005 Source: IMS/BW 16
Slide 18: US diabetes prevalence is increasing
US diabetes prevalence is increasing Americans diagnosed with diabetes Key observations • Diabetes now affects nearly 21 16 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 19: Adult diabetes prevalence at 10%
Adult diabetes prevalence at 10% Estimated diabetes prevalence by age group Key observations 25% • The risk of diabetes increases with 20.9% 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% • The US
Slide 20: 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) 19
Slide 21: Diabetes prevalence is tracking obesity, cont'd
Diabetes prevalence is tracking obesity, cont’d Obesity prevalence 1999 Diabetes prevalence 1999 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) 20
Slide 22: 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) 21
Slide 23: 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 24: ... 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 25: 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 % Q4 Q2 Q3 Q3 Q3 Q1 Q4 Q1 Q2 Q4 Q1 Q2 Q4 Q2 Q3 Q3 Q1 Q4 Q1 Q2 Q1 Q2 Q3 2000 2001 2002 2003 2004 2005 NOVO NORDISK LILLY WANBANG BIOCHEMIC
Slide 26: Limited impact from biosimilars
Limited impact from biosimilars 25
Slide 27: 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 28: 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 27
Slide 29: R&D update
R&D update 28
Slide 30: 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 31: 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 32: Impressive liraglutide phase IIb data
Impressive liraglutide phase IIb data - once daily, human GLP-1 analogue • Improvement of HbA1c of between 1.5 and 2 percentage points as monotherapy over 14 weeks • Average HbA1c level at the beginning of the study was just below 8.5% • Patients at the highest dose reduced bodyweight by approximate
Slide 33: Financials
Financials 32
Slide 34: 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 35: 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 36: 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
Slide 37: Novo Nordisk - concluding remarks
Novo Nordisk - 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 presence in North Am
Slide 38: 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 in Fax (+45) 4443 6633 Copenhagen and London. Its Mogens Thorsager Jensen Tel: (+45) 4442 7945 ADRs are listed
Slide 39: Appendices
Appendices novo nordisk” 38
Slide 40: 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 41: Insulin growth driven by NovoRapid and NovoMix
Insulin growth driven by NovoRapid® and NovoMix® NovoRapid® share of NovoMix® share of short-acting analogues premixed analogues 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q1 Q3 Q1 Q3 2002 2005 2002 2005 Note: Quarterly data, volume figures Source: IMS/BW 40
Slide 42: 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 41
Slide 43: 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 42
Slide 44: 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 45: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Analogue penetration short-acting segment Share of short-acting segment 70% 60% 50% Humalog Human insulin 65% 40% 30% 20% Analogues NovoLog® 10% 0% Q1 Q3 Q1 Q3 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 44
Slide 46: 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% NovoLog® Mix 28% 70/30 5% Analogues 0% Q1 Q3 Q1 Q3 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 45
Slide 47: US long-acting analogue conversion
US long-acting analogue conversion Analogue penetration long-acting segment (US) Human insulin 51% Analogues Q1 Q3 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 46
Slide 48: 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 47
Slide 49: 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 50: 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 49
Slide 51: The 1-2-3 Study of NovoMix 30: cumulative % of patients achieving targets
The 1-2-3 Study1 of NovoMix® 30: cumulative % of patients achieving targets HbA1C ≤ 6.5 HbA1C < 7% (AACE, IDF goal) (ADA goal) NovoMix® 30 1 once daily 21% 41% NovoMix® 30 twice 2 daily 43% 68% NovoMix® 30 3 thrice daily 58% 78% Baseline HbA1C was 8.6% Jain et al., EASD 2005, Poster 837. 1) The stud
Slide 52: The weight advantage of Levemir increases with higher BMI
The weight advantage of Levemir® increases with higher BMI Change in weight by BMI (kg/m2) 3.5 36 Key observations 37 Mean weight change (kg) 3 50 39 36 • With higher baseline 2.5 BMI, Levemir® causes 35 significantly less weight 2 34 gain than NPH insulin 1.5 as add-on therapy to OADs 35 1 • Levemi
Slide 53: 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 Hypoglycaemia
Slide 54: 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 53