Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — H1 2010 Earnings Presentation
59 slides from Novo Nordisk A/s Class B's earnings presentation, August 2010
Slide 1: Investor presentation First six months of 2010
Investor presentation Investor presentation First six months of 2010
Slide 2: Forward-looking statements
Investor presentation First six 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 the company’s Annual Report 2009 and Form 20-F, both filed with the SEC in February 2010 as well as this d
Slide 3: Content
Investor presentation First six months of 2010 Slide no 3 Content Highlights and key events Sales update R&D update Financials and outlook
Slide 4: Highlights and key events
Investor presentation First six months of 2010 Slide no 4 Highlights and key events Market development • Modern insulins drive robust sales growth of 14% (11% in local currencies) • North America and International Operations account for more than 80% of sales growth • Victoza® launched in Japan and
Slide 5: Sales update
Investor presentation First six months of 2010 Slide no 5 Sales update
Slide 6: Proteins drive value growth in the global diabetes care market
Investor presentation First six months of 2010 Slide no 6 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 45 25% 23% 40 Total market: CAGR 12% Quarterly sales (bDKK) 35 20% 30 15%
Slide 7: Key products continue to drive growth – first six months of 2010
Investor presentation First six months of 2010 Slide no 7 Key products continue to drive growth – first six months of 2010 Sales as reported Growth analysis Other Local currencies Growth Share of Norditropin ® +1% growth 4% +8% 8% Diabetes care Modern insulins 19% 68% NovoSeven® +16% Human insulins
Slide 8: North America drives sales growth – first six months of 2010
Investor presentation First six months of 2010 Slide no 8 North America drives sales growth – first six months of 2010 Sales as reported Growth analysis Japan & Korea 7% North America Local currencies Growth Share of +21% growth International 9% Operations North America 20% 63% +17% Europe 5% 13% 21
Slide 9: Limited financial impact for Novo Nordisk of announced health care reforms in Europe
Investor presentation First six months of 2010 Slide no 9 Limited financial impact for Novo Nordisk of announced health care reforms in Europe Germany: • Mandatory rebate for patent protected drugs increased from 6% to 16% • Price freeze based on 2009 prices • Free pricing restricted to first 12 mon
Slide 10: Sustaining leadership position in an expanding insulin market
Investor presentation First six months of 2010 Slide no 10 Sustaining leadership position in an expanding insulin market Global insulin market growth Global insulin market shares Novo Nordisk Sanofi-Aventis Eli Lilly Volume: 7.2% 70% DKK: 14.2% 60% GR 51% CA 50% 40% 30% DKK 74.8 DKK 38.5 23% 20% 22%
Slide 11: Continued conversion to modern insulins drives value creation in the insulin market
Investor presentation First six months of 2010 Slide no 11 Continued conversion to modern insulins drives value creation in the insulin market Modern insulin penetration Modern insulin market shares Novo Nordisk Sanofi-Aventis Eli Lilly 70% 60% 61% 50% 46% 35% Modern insulin 40% 34% 30% 20% 20% Huma
Slide 12: Encouraging US performance of Victoza
Investor presentation First six months of 2010 Slide no 12 Encouraging US performance of Victoza® Victoza® is gradually expanding Distribution of previous treatment for the US GLP-1 market patients on Victoza® GLP-1 % of diabetes value market (right axis) 60 4% GLP-1 TRx scripts (1000’s) 50 Other 3%
Slide 13: Victoza continues to expand the European GLP-1 market
Investor presentation First six months of 2010 Slide no 13 Victoza® continues to expand the European GLP-1 market Development in key European GLP-1 markets following Victoza® launch Germany UK France 6% Market value*: 6% Market value*: 6% Market value*: DKK 9 billion DKK 4 billion DKK 5 billion Diab
Slide 14: R&D update
Investor presentation First six months of 2010 Slide no 14 R&D update
Slide 15: First phase 3 trial confirms DegludecPlus’ profile is effective, safe and convenient
Investor presentation First six months of 2010 Slide no 15 First phase 3 trial confirms DegludecPlus’ profile is effective, safe and convenient Trial design: Trial design Trial results • Controlled, open label, treat-to-target trial • People with type 1 diabetes randomised for 6 months to either: •
Slide 16: R&D pipeline: Diabetes and obesity
Investor presentation First six months of 2010 Slide no 16 R&D pipeline: Diabetes and obesity Compound Type Indication Status (phase) 1 2 3 Filed Appr. Degludec Ultra LA basal insulin Type 1+2 DegludecPlus Ultra LA basal insulin with a bolus boost Type 1+2 Semaglutide Once-weekly GLP-1 analogue Type
Slide 17: Clinical proof of concept established for recombinant factor VIIa analogue
Investor presentation First six months of 2010 Slide no 17 Clinical proof of concept established for recombinant factor VIIa analogue Trial design: • Randomised, double-blinded, controlled, dose-escalation phase 2 trial evaluating the safety, pharmacokinetics and efficacy of NN1731, an ultra fast-ac
Slide 18: R&D pipeline: Haemostasis
Investor presentation First six months of 2010 Slide no 18 R&D pipeline: Haemostasis Compound Type Indication Status (phase) 1 2 3 Filed Appr. NN1841 rFXIII Congenital FXIII deficiency NN7008 rFVIII Haemophilia A NN1731 Ultra FA rFVIIa analogue Haemophilia w. inhibitors NN7128 LA rFVIIa derivative H
Slide 19: R&D pipeline: Other biopharmaceuticals
Investor presentation First six months of 2010 Slide no 19 R&D pipeline: Other biopharmaceuticals Compound Type Indication Status (phase) 1 2 3 Filed Appr. NN8630 LA hGH GHD & AGHD Anti-IL20 Monoclonal antibody PSA / RA Anti-C5aR Monoclonal antibody RA NN8555 Monoclonal antibody RA Note: LA: long-ac
Slide 20: Financials and outlook
Investor presentation First six months of 2010 Slide no 20 Financials and outlook
Slide 21: Financial results
Investor presentation First six months of 2010 Slide no 21 Financial results DKK million H1 2010 H1 2009 change Sales 29,068 25,499 14% Gross profit 23,409 20,381 15% Gross margin 80.5% 79.9% Sales and distribution costs 8,348 7,681 9% Percent of sales 28.7% 30.1% Research and development costs 4,56
Slide 22: Solid gross margin development key driver for financial achievements since 2005
Investor presentation First six months of 2010 Slide no 22 Solid gross margin development key driver for financial achievements since 2005 Gross margin improvement Key observations 82% Annual average • Gross margin improvement of 60 80.5 basis points compared to first six 80% 79.6 months of 2009 78%
Slide 23: Key currencies above 2009 average
Investor presentation First six months of 2010 Slide no 23 Key currencies above 2009 average 650 Spot rates Quarterly average Annual average Annual impact on operating profit of a 5% movement in USD/DKK currency (DKK million) 600 2010 USD 580 550 JPY 150 GBP 80 500 CNY 100 CAD 40 450 Q108 Q208 Q308
Slide 24: Financial guidance for 2010
Investor presentation First six months of 2010 Slide no 24 Financial guidance for 2010 • Sales growth expectations: Key currency rates • Now in the range of 9-10% in local currencies DKK 2009 2010 Current per 100 average average* rate • Now around 6 percentage points higher as reported USD 536 565 5
Slide 25: Total cash return to shareholders
Investor presentation First six months of 2010 Slide no 25 Total cash return to shareholders - Share repurchase programme expanded by DKK 1 billion Dividend and payout ratio Annual share repurchases Dividend Payout ratio DKK billion DKK billion for prior year 5 45% 10 Dividend paid 4.4 8.5 Payout ra
Slide 26: Closing remarks
Investor presentation First six months of 2010 Slide no 26 Closing remarks Solid market performance Promising pipeline • 10% annual diabetes market growth • GLP-1 portfolio offers opportunity to driven by diabetes prevalence expand within early stage type 2 diabetes and establish presence • 51% insu
Slide 27: Investor information
Investor presentation First six months of 2010 Slide no 27 Investor information Share information Investor Relations contacts Novo Nordisk’s B shares are listed on the Novo Nordisk A/S stock exchange in Copenhagen. Its ADRs are Investor Relations Novo Allé, DK-2880 Bagsværd listed on the New York St
Slide 28: Appendix
Investor presentation First six months of 2010 Slide no 28 Appendix 1. Strategy 2. Financials 3. Performance of key products 4. R&D 5. Detailed market shares
Slide 29: Appendix 1: Strategy
Investor presentation First six months of 2010 Slide no 29 Appendix 1: Strategy
Slide 30: Sustainability of protein based franchises
Investor presentation First six months of 2010 Slide no 30 Sustainability of protein based franchises Share of market Animal Human Modern New generation 1st generation 2nd generation 3rd generation • Degludec Insulin • NovoMix® • NovoRapid® • • DegludecPlus NN1218 • Levemir® • New concepts tim e Sha
Slide 31: Novo Nordisk’s corporate strategy
Investor presentation First six months of 2010 Slide no 31 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-diabet
Slide 32: Insulin leadership position in all regions
Investor presentation First six months of 2010 Slide no 32 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: 41
Slide 33: GLP-1 penetrating the diabetes care market
Investor presentation First six months of 2010 Slide no 33 GLP-1 penetrating the diabetes care market World DKK MAT market billion growth OAD 80 12% OAD Insulin Insulin 75 14% GLP-1 4 15% GLP-1 Note: Absolute data represent MAT May 2010 and growth data represent MAT May 2010 over MAT May 2009. Sourc
Slide 34: There is a need for better treatment options to bring blood glucose levels in control
Investor presentation First six months of 2010 Slide no 34 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 Retinopathy
Slide 35: Diabetes deteriorates the insulin response to changing blood glucose levels
Investor presentation First six months of 2010 Slide no 35 Diabetes deteriorates the insulin response to changing blood glucose levels 24 hour insulin secretion in type 2 Post prandial insulin response in type 2 diabetics and healthy individuals diabetics and healthy individuals Healthy individual T
Slide 36: Appendix 2: Financials
Investor presentation First six months of 2010 Slide no 36 Appendix 2: Financials
Slide 37: Long term financial targets: Operating profit growth and operating margin
Investor presentation First six 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 23.7
Slide 38: Long term financial targets: Return on invested capital and cash to earnings
Investor presentation First six 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% 3
Slide 39: Appendix 3: Performance of key products
Investor presentation First six months of 2010 Slide no 39 Appendix 3: Performance of key products
Slide 40: Modern insulins exhibit steady penetration
Investor presentation First six months of 2010 Slide no 40 Modern insulins exhibit steady penetration Global market share of total segment Modern insulin sales as reported NovoRapid® NovoMix®30 Levemir® Levemir® DKK 3.3bn 50% NovoRapid® +33% DKK 5.7bn +19% 40% 26% 30% 45% NovoMix ® 20% DKK 3.7bn +16
Slide 41: Solid NovoSeven sales growth
Investor presentation First six months of 2010 Slide no 41 Solid NovoSeven® sales growth Reported NovoSeven® sales Key observations • Sales growth YTD in 2010 of 11% as 2.500 reported and 9% in local currencies % • Growth driven by North America : 12 2.000 G R CA • The sales growth for NovoSeven® DK
Slide 42: Solid Norditropin sales growth
Investor presentation First six months of 2010 Slide no 42 Solid Norditropin® sales growth Reported Norditropin® sales Key observations 1.400 • Sales growth YTD in 2010 of 8% as R : 12% reported and 6% in local currencies CAG 1.200 • All regions contribute to growth 1.000 DKK million • Worldwide vol
Slide 43: Appendix 4: R&D
Investor presentation First six months of 2010 Slide no 43 Appendix 4: R&D
Slide 44: Protraction mechanism for Degludec
Investor presentation First six months of 2010 Slide no 44 Protraction mechanism for Degludec Multi-hexamers Subcutaneous tissue Monomers Capillary membrane Insulin degludec in blood Albumin binding Capillary blood Cell Membrane Insulin Receptors
Slide 45: Metabolic action profiles of Degludec and DegludecPlus
Investor presentation First six months of 2010 Slide no 45 Metabolic action profiles of Degludec and DegludecPlus Degludec steady state profile DegludecPlus single dose profile 3 10 People with type 1 diabetes (n=12) People with type 1 diabetes (n=12) 0.4 U/kg once daily for 6 days Single do
Slide 46: Degludec phase 3 data in type 1 diabetics
Investor presentation First six months of 2010 Slide no 46 Degludec phase 2 data in type 1 diabetics All confirmed hypoglycaemia Confirmed nocturnal hypoglycaemia Insulin Degludec Insulin Glargine Insulin Degludec Insulin Glargine 1200 200 Estimated Relative Rate: 0.72 [0.52; 1.00] 1000 150 Number o
Slide 47: Degludec phase 2 data in type 2 diabetics
Investor presentation First six months of 2010 Slide no 47 Degludec phase 2 data in type 2 diabetics Mean insulin dose at week 16 and Similar development in HbA1C relative rate of hypoglycaemia Degludec OD Degludec 3TW Glargine OD Degludec Degludec Glargine OD 3TW OD 9.0 Weekly 3.1 3.4 3.3 8.5 insul
Slide 48: DegludecPlus phase 2 data in type 2 diabetics
Investor presentation First six months of 2010 Slide no 48 DegludecPlus phase 2 data in type 2 diabetics Self measured plasma glucose at week 16 Mean insulin dose DegludecPlus Glargine DegludecPlus Glargine 280 0.5 29 30 2h PG increment (mg/dl) 0.45 U/kg Mean insulin dose (U/kg) 20 0.4 240 SMPG (mg/
Slide 49: Recruitment now completed for the BEGIN and BOOST phase 3a programmes
Investor presentation First six months of 2010 Slide no 49 Recruitment now completed for the BEGINTM and BOOSTTM phase 3a programmes Estimated timeline for patient treatment for clinical programme NN1250-3579: 12 mth vs. IGlar, T2 (N=984) NN1250-3582: 12 mth vs. IGlar, T2 (N=984) NN1250-3583 : 12 mt
Slide 50: LEAD study comparing liraglutide and exenatide treatment
Investor presentation First six months of 2010 Slide no 50 LEAD 6 study comparing liraglutide 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 Proportion of subjects (%) Exenatide -> Vi
Slide 51: NN1731: Attractive profile of the next generation factor seven, rFVIIa analogue
Investor presentation First six months of 2010 Slide no 51 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 forma
Slide 52: Appendix 5: Detailed market share slides
Investor presentation First six months of 2010 Slide no 52 Appendix 5: Detailed market share slides
Slide 53: Global insulin volume growth above 5%
Investor presentation First six months of 2010 Slide no 53 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% 18% 20% 80% 4% 15% 60% 42% 10% 40% 5% 20
Slide 54: Stable market shares across the three insulin segments
Investor presentation First six months of 2010 Slide no 54 Stable market shares across the three insulin segments Global insulin market by Novo Nordisk market share segments by segment Fast acting Premix Long acting tMU 100 100% CAGR volume: 7.3% CAGR value*: 15.2% 80 80% 34% 66% 60 Fast acting 60%
Slide 55: Still a significant potential for Novo Nordisk on the US modern insulin market
Investor presentation First six months of 2010 Slide no 55 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 Device penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration
Slide 56: Maintaining the solid leadership position on the European modern insulin market
Investor presentation First six months of 2010 Slide no 56 Maintaining the solid leadership position on the European modern insulin market EU insulin market by segments EU modern insulin market shares Modern insulin penetration Device penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration
Slide 57: Stable leadership position on the rapidly growing Chinese insulin market
Investor presentation First six months of 2010 Slide no 57 Stable leadership position on the rapidly growing Chinese insulin market China insulin market by segments China insulin market shares Modern insulin penetration Device penetration Novo Nordisk Sanofi-Aventis Eli Lilly tMU Penetration Shangha
Slide 58: US modern insulin conversion and product performance
Investor presentation First six months of 2010 Slide no 58 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: 43% Share of market converted: 78% 50% 50% 8
Slide 59: European modern insulin conversion and product performance
Investor presentation First six months of 2010 Slide no 59 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: 67% Share of market converted: 54% Share of market converted: 68% 50%