Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — Non-Deal Roadshow (February 2004)
61 slides from Novo Nordisk A/s Class B's roadshow presentation, February 2004
Slide 1: Novo Nordisk: A focused healthcare company
Novo Nordisk A focused healthcare company Investor presentation – Full year 2003 1
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 • Novo Nordisk snapshot • Highlights 2003 • Diabetes care • Biopharmaceuticals • Pipeline update • Sustainable development • Finance • Outlook 2004 3
Slide 4: Novo Nordisk snapshot
tent, strong organic growth d on few areas with large unmet needs dership in diabetes blishing platform in haemostasis to leverage on global operations ng presence in Europe and Japan Novo Nordisk snapshot ng growth in the US and International Operations biotech and drug delivery capabilities posure
Slide 5: Highlights from 2003
Highlights from 2003 • Sales +15% measured in local currencies • Sales of insulin analogues increased by 137% in local currencies • NovoSeven® sales increased by 20% in local currencies • Operating profit increased by • 7% as reported • close to 30% in local currencies • EPS growth of 21% • NovoSeve
Slide 6: Sales in 2003 by segment and region
Sales in 2003 - by segment and region Diabetes care Biopharmaceuticals* International Japan & Operations Oceania Europe +9% (+21%) +2% (+11%) +10% (+13%) Europe Japan & +1% (+3%) Oceania -6% (+3%) International Operations +2% (+18%) North America North America +5% (+24%) +12% (+33%) Total DKK 18,723
Slide 7: Diabetes care: key observations
10 15 20 0 5 DKK billion OADs 2000 Analogues 2001 Note: OAD is Oral Antidiabetic Drug 2002 Diabetes care 2003 Human insulin and insulin devices Key observations • Sales +16% in local currencies and +6% as reported • North America growth via: • Analogue market share gain • Device market share gain •
Slide 8: Leader in diabetes care - a driver of double-digit growth
Leader in diabetes care - a driver of double-digit growth 20% 20% Diabetes Care Share of total diabetes market* Takeda Novo Nordisk 15% Cancer 15% % CAGR 1998-2002 Arthritis Eli Lilly CNS 10% Respiratory 10% Aventis Cardiovascular BMS 5% Infectious disease 5% Pfizer 0% 0% 0% 20% 40% 60% 0% 5% 10% 15
Slide 9: Sustainable volume growth
Sustainable volume growth 300 Key observations: diabetes (million) # of people with 250 2000 200 2030 • Epidemic growth 150 100 • Increased life expectancy 50 • Increasing awareness leading to 0 increasing diagnosis rate US Japan Europe Rest of World • More than 2/3 of those in treatment are not in
Slide 10: Adding value to volume
Adding value to volume - part of a winning formulary Improving convenience, compliance and control Key observations: • Improved quality of life for the patients Disposables Vials Durables analogue Insulin • Improved economics for society • Growth opportunity for Novo Human insulin Nordisk, as • 29%
Slide 11: Different people - different insulin needs
Different people – different insulin needs Long- acting Low-mix Convenience Bolus High-mix Basal- bolus Pump Meeting physiological need for control 11
Slide 12: The only company with a full range of analogues
The only company with a full range of analogues Analogue s supporte d by strong Convenience device portfolio Meeting physiological need for control 12
Slide 13: Short-acting insulin - strong dynamics
Short-acting insulin - strong dynamics Novo Nordisk’s market Analogue penetration share development Insulin analogues Share of total short-acting segment Human insulin Share of short-acting analogue segment 50% 50% 40% 26% 30% Mega units 20% 10% 0% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Note: Quarterly dat
Slide 14: More and more patients use NovoRapid
More and more patients use NovoRapid® NovoRapid® offers: Serum insulin profiles • Flexible meal-time dosing (pmol/l) 500 • Unsurpassed efficacy and safety NovoRapid® Human insulin • The only insulin analogue with pump 400 indication in the US Serum insulin • 2/3 sold in devices 300 • Available in Fl
Slide 15: Premixed insulin - strong uptake
Premixed insulin - strong uptake Novo Nordisk’s market share Analogue penetration development Insulin analouges Share of total premix segment Human insulin Share of premix analogue segment 17% 60% 50% Mega units 40% 30% 20% 10% 0% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Note: Quarterly data, volume figures
Slide 16: The ideal starter insulin for people with type 2 diabetes
The ideal starter insulin for people with type 2 diabetes Improved postprandial control NovoMix® 30 offers: • Significantly improved p < 0.05 p < 0.0001 postprandial glycaemic control 25 -10% -17% S-glucose excurtion0-5h (mmol/lh) • Significantly improved 20 glycaemic control in patients poorly cont
Slide 17: Devices - second part of value creation
Devices - second Device part of value penetration US dynamics creation USA Total Long- Europe acting Short- Japan acting Total Premix 0% 25% 50% 75% 100% 0% 5% 10% 15% 20% Q3 2003 Q3 2002 Q3 2001 Note: Quarterly data, volume figures Source: IMS/BW 17
Slide 18: North America - expansion strategy paying off
North America - expansion strategy paying off Access to insured customers Highlights: % of pharmacy benefit lives 100% • Insulin sales +37% in local currencies 75% • Analogues alone +172% in local currencies 50% • Contracts with most major managed care organisations, pharmacy benefit managers as 25%
Slide 19: North America - increasing the share of voice
North America - increasing the share of voice Insulin share of voice Insulin share of voice Endocrinologists GPs 100% 100% 9% 13% 21% 22% 35% 75% 75% 24% 47% 48% 23% 4% 36% 50% 50% 15% 63% 43% 55% 61% 43% 25% 25% 38% 0% 0% Q3 01 Q3 02 Q3 03 Q3 01 Q3 02 Q3 03 Novo Nordisk Lilly Aventis Source: IMS 19
Slide 20: North America - growth is set to continue
North America - growth is set to continue Platform for future growth: Novo Nordisk’s US market share • The broadest insulin portfolio on the market and supportive 75% 66% services in place • Sales force to be increased by 60% 150 people to more than 800 as Non-retail Total of Q2 2004 45% Retail • Cl
Slide 21: Continuing solid growth potential in diabetes
Continuing solid growth potential in diabetes Novo Nordisk versus total market The business case +7% Volume +10% Total insulin market Novo Nordisk Volume 5% Insulin +11% devices +12% (volume) Insulin +38% + analogues +143% (volume) Value (local currencies)* +14% +17% Value 5% 0% 20% 40% Source: IMS/
Slide 22: Biopharmaceuticals - highlights
Biopharmaceuticals - highlights DKK billion 8 Key observations: • Sales +14% in local currencies 6 and +4% as reported • Growth driven by: 4 • NovoSeven® in all regions • Growth hormone in the 2 regions outside Japan 0 2000 2001 2002 2003 NovoSeven® Growth hormone HRT and other 22
Slide 23: NovoSeven - current business focus
NovoSeven® - current business focus DKK Key observations: billion 4 • Sales +20% in local currencies and +7% as reported 3 • Growth via: • Continued penetration in North America and Europe 2 • Increased focus on developing world 1 • Awareness creation in Japan • Increased investigational use 0 2000
Slide 24: Value in growth hormone
Value in growth hormone DKK billion 2.5 Key observations: 2 • Sales +13% in local currencies and +4% as reported 1.5 • Launch of NordiFlex® in Japan, 1 the US and Europe in 2004 0.5 • Dedicated sales organisation in 0 Japan and increased US staff 2000 2001 2002 2003 • Launch of SGA* in Europe Nordit
Slide 25: Pipeline update
Pipeline update 25
Slide 26: Diabetes care pipeline
Diabetes care pipeline Compound Type Indication Phase Levemir® (insulin detemir) Insulin Type 1+2 diabetes Filed EU+US* NovoMix® 50 and 70 Insulin Type 1+2 diabetes Phase 3 AERx® iDMS (NN1998) Insulin Type 1+2 diabetes Phase 3 Liraglutide (NN2211) GLP-1 Type 2 diabetes Phase 2 analogu e Balaglitazon
Slide 27: Levemir (insulin detemir) - achieving control with less side effects
Levemir™ (insulin detemir) - achieving control with less side effects Long-acting dynamics Levemir™ offers: 50% • Improved predictability • Lower risk of hypoglycaemia 40% • No weight gain 30% • Improved fasting glucose Novo Nordisk’s share of long- • A smooth, stable glucose profile 20% acting insu
Slide 28: Trauma
Trauma – number 1 cause of death below age 45 in the US Key observations; Western world: Distribution of time of death • 1.5 million trauma victims for trauma victims (US) • 80% of all trauma victims related 50% to blunt trauma, in particular traffic accidents • Bleeding is a major cause of death •
Slide 29: NovoSeven in trauma - fulfilling a serious unmet need
NovoSeven® in trauma – fulfilling a serious unmet need Traumatic Within hours bleeding Hospitalised Gradual decay of the organism Transfusion Within minutes Neutrophils Gastro- intestinal bacteria Ischaemia/reperfusion Cytokines Haemorrhagic shock Systemic Inflammatory Response Syndrome (SIRS) Compl
Slide 30: Trauma - a breakthrough for NovoSeven
Trauma - a breakthrough for NovoSeven® Data on primary end point of Red Blood Cell (RBC) transfusion Data on secondary end points • RBC Statistically • Mortality Positive trans- significant • Compli- fusion effect cations trend Full data set to be presented on 5 March 2004 at World Congress Data rel
Slide 31: NovoSeven in OLT - clinical proof of concept
NovoSeven® in OLT - clinical proof of concept Mechanical NovoSeven® versus EPO and iron Anti- measures supplement fibrinolytics placebo: • Significantly more Topical patients avoided haemostats transfusion in Prophylaxis NovoSeven® group • Significantly less transfusion in patients Transfusions with
Slide 32: Expanding the use of NovoSeven
Expanding the use of NovoSeven® Critical bleeding in Bleeding in elective surgery emergencies Key observations: ICH • Two main areas with a (Ph2 to report Liver transplantation H2 2004) significant unmet need (Ph2 finalised) for a haemostatic Trauma agent UGI (Ph3 in planning) Hepatectomy (Ph2 (Ph2
Slide 33: Sustainable value creation
Sustainable value creation “We will offer products and “We will be the world’s services in other areas leading where we can make a diabetes care company” difference” Socially Environmentally Financially responsible sound viable 33
Slide 34: Financial results
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Slide 35: Financial results
Financial results DKK million 2003 2002 % change Net turnover 26,541 25,187 5 Operating profit 6,384 5,979 7 Net financials 999 321 211 Profit before tax 7,383 6,300 17 Net profit 4,858 4,095 19 EPS (DKK)* 14.14 11.72 21 * EPS on a fully-diluted basis. 35
Slide 36: Financials - key highlights 2003
Financials - key highlights 2003 Free cash flow and Earnings per share investments to sales (in %) DKK DKK billion Cash flow 15 % +21% 4.5 20% 26 A GR 4 Investments to C sales (%) 3.5 15% 10 3 2.5 10% 2 5 1.5 1 5% 0.5 0 0 0% 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 36
Slide 37: Shareholder value
Shareholder value Long-term financial targets In % 1999 2000 2001 2002 2003 Targets Average Operating profit growth 20.3 36.5 16.6 6.5 6.8 15 17% Operating margin 21.5 23.1 23.6 23.7 24.1 25 23% Cash to earnings* 76.6 87.9 4.8 12.1 79.2 60 52% ROIC 15.3 22.0 23.1 20.1 19.1 25 20% Returning cash to s
Slide 38: Outlook for 2004
Outlook for 2004 • Sales growth expectations: • Double digit in local currencies • High single digit reported Key currency rates • Operating profit growth expectations: DKK 2003 2004 Current per 100 average ytd avg rate* • 15% underlying • At the level of 2003 reported USD 659 591 598 JPY 5.68 5.56
Slide 39: Going on patent
Going on patent Patent expirations* Novo Nordisk is going on patent 40% 100% 36% 34% 35% 32% 29% 75% 30% 26% 25% 20% 18% 17% 50% 15% 15% 13% 10% 25% 5% 3% 0% 0% Nordisk BMS Eli Lilly Takeda Merck GSK Bayer Novartis Aventis Pfizer 2003 2004 2005 2006 2007 2008 2009 2010 Novo On patent Off patent Sour
Slide 40: Novo Nordisk snapshot
tent, strong organic growth d on few areas with large unmet needs dership in diabetes blishing platform in haemostasis to leverage on global operations ng presence in Europe and Japan Novo Nordisk snapshot ng growth in the US and International Operations biotech and drug delivery capabilities posure
Slide 41: Investor information
Investor information Share information Investor Relations contacts Novo Nordisk’s B shares are Novo Nordisk A/S listed on the stock Investor Relations exchanges in Copenhagen Novo Allé, DK2880 Bagsværd Fax (+45) 4443 6633 and London. Its ADRs are Peter Haahr listed on the New York Stock Tel (direct
Slide 42: Sales by therapy - full year 2003
Sales by therapy - full year 2003 • +20% in local currencies • +13% in local currencies • +16 in local currencies • Haemostasis management • Growth hormone therapy HRT Growth hormone -1% therapy +4% Key observations Haemostasis (NovoSeven®) management • Diabetes care (NovoSeven®) +7% Diabetes care +
Slide 43: Sales by therapy - currency impact 2003
Sales by therapy - currency impact 2003 Diabetes care 16 6 Haemostasis management 20 7 Growth hormone therapy 13 4 Hormone 5 replacement therapy -1 Total 15 5 -5 0 5 10 15 20 25 Growth in local currencies Growth in Danish kroner 43
Slide 44: Sales by region - full year 2003
Sales by region - full year 2003 • +10% in local currencies • +18% in local currencies • +28 in local currencies • International Operations Japan & Oceania Europe -1% +7% Key observations International Operations • North America +3% • Europe North America +8% Sales of DKK 26.5 billion (+5% reported
Slide 45: Sales by region - currency impact 2003
Sales by region - currency impact 2003 10 Europe 7 28 North America 8 18 International Operations 3 Japan & Oceania 9 -1 Total 15 5 -5 0 5 10 15 20 25 30 Growth in local currencies Growth in Danish kroner 45
Slide 46: Insulin market overview - volume
Insulin market overview - volume Market size Growth rates Novo Nordisk market share Market Novo Nordisk US 5.8% 31% ▲ 42% 18.0% Europe 6.9% 47% 7.7% 59% ▲ Japan 10.7% 9.1% 75% ▼ 5% 6.5% World 48% ▲ 100% 10.4% Source: IMS/BW. Volume data for the US, Europe, Japan, Canada, New Zealand, South Africa an
Slide 47: A continued increase in market share
A continued increase in market share Novo Nordisk’s analogue Analogue penetration market share 25% 20% Human insulin 15% 10% 28% 5% Analogues 7% 0% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Note: Quarterly data, volume figures Source: IMS/BW 47
Slide 48: European analogue conversion - NovoRapid
European analogue conversion - NovoRapid® Short-acting segment in Europe Share of short-acting segment 30% 25% Humalog market share 26% Short-acting 20% human insulin 15% 45% NovoRapid® 10% market share 18% 22% Short-acting 5% insulin analogues 0% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Note: Quarterly data
Slide 49: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Short-acting segment in the US Share of short-acting segment 60% 50% Short-acting human insulin 40% Humalog market share 46% 59% 30% NovoLog® market 33% Short-acting 20% share 14% insulin analogues 10% 0% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Note: Quarterly data, volume
Slide 50: Novo Nordisk's pen market shares
Novo Nordisk’s pen market shares Worldwide Regions 70% 90% 80% 70% 60% US Japan Europe 60% 50% 50% 40% 30% 40% 20% Q1 2000 Q3 2003 Q1 2000 Q3 2003 Source: IMS/BW, quarterly data volume figure 50
Slide 51: Insulin segmentation - Europe and the US
Insulin segmentation - Europe and the US Europe US 50% 50% 40% 40% 30% 30% 20% 20% Long-acting Long-acting Premix Premix 10% 10% Short-acting Short-acting 0% 0% Q4 1997 Q3 2003 Q4 1997 Q3 2003 Source: IMS/BW 51
Slide 52: Novo Nordisk's market share since Lantus launch
Novo Nordisk’s market share since Lantus launch Total Month of Europe (Novo Nordisk’s share of segment) insulin Lantus November 65% (MU) launch 2003 60% US 26% 32% 55% Europe 57% 59% 50% Germany 44% 46% 45% Long-acting Premix UK 67% 65% Short-acting 40% Jan 2002 Nov 2003 Source: IMS/BW (in volume 52
Slide 53: Lantus impact? - volume
Lantus impact? Index - Month of launch equals 100 - volume Novo Nordisk Indexed 130 market share Germany 125 Novo Nordisk Indexed market share UK 120 Novo Nordisk Indexed 115 market share US 110 105 100 95 90 1 6 11 16 21 26 31 36 41 Months since Lantus launch Source: IMS/BW 53
Slide 54: Lantus impact? - value
Lantus impact? Index - Month of launch equals - value 135 Novo Nordisk Indexed market share Germany 130 125 Novo Nordisk Indexed 120 market share UK 115 100 Novo Nordisk Indexed 110 market share US 105 100 95 90 1 6 11 16 21 26 31 36 41 Months since Lantus launch Source: IMS/BW 54
Slide 55: Insulin secretion in people with and without type 2 diabetes
Insulin secretion in people without diabetes and people with type 2 diabetes 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. 55
Slide 56: NovoSeven - a unique mechanism of action
NovoSeven® - a unique mechanism of action NovoSeven® directly activates factor X on the surface of the locally activated platelets 56
Slide 57: Existing indication - still some growth potential
Existing indication - still some growth potential Distribution of inhibitor patients Inhibitor patients require first- Japan & line treatment with NovoSeven® Oceania • 2 bleeds per month 6% • 2-3 doses/bleeds • 90 micrograms/kg Europe As well as additional treatment 31% + Surgical intervention North
Slide 58: Trauma - key observations
Trauma – key observations Key observations: Causes of death in trauma • 1,5 million trauma victims in Other CNS + Undetermined the Western world. 20% Exsanguination 4% 4% receives blood transfusions. 6% • 100,000 trauma victims Organ failure 7% receive more than two bags CNS of red blood cells 41% •
Slide 59: HRT
HRT DKK Key observations: billion 1.5 • Sales +5% in local currencies and - 1% as reported • Sales positively impacted by the 1 change in distribution set-up in the US following taking back the marketing rights to certain HRT products in the US 0.5 • US HRT sales force now in place • Trend towards l
Slide 60: Partnering for growth
Partnering for growth Partner Product/Project Type Year estab Medarex Human antibodies Research and licence 2000 BioVision Peptide targets Research and licence 2001 TransTech Pharma Diabetes targets Research and licence 2001 RE&D VUFB Chemistry & project collaboration Research and licence 2001 Atuge
Slide 61: Currency exposure
Currency exposure Effect of 5% depreciation on full- 9.0 year operating profit* USD (DKK million) avg = 7.88 USD -210 8.0 JPY -130 GBP -75 avg = 6.59 USD rel. -50 7.0 JPY * currency hedging income is recorded as financial YTD 2004 income avg = 5.91 6.0 avg = 6.30 YTD 2004 avg = 5.68 avg = 5.56 5.0 2