Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — H1 2006 Earnings Presentation
50 slides from Novo Nordisk A/s Class B's earnings presentation, 2006
Slide 1: A focused healthcare company
A focused A focused healthcare healthcare company company Investor presentation – First six months of 2006
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 • Sales update • R&D update • Financials 2
Slide 4: Highlights from first six months of 2006
Highlights from first six months of 2006 Market development: • Sales growth driven by insulin analogues: +59% as reported • NovoSeven® growth continues: +19% as reported • Norditropin® SimpleXx® shows strong performance: +22% as reported Research and development: • Liraglutide phase 2 dose-finding t
Slide 5: Sales update
Sales update 4
Slide 6: Key products continue to drive growth
Key products continue to drive growth – first six months of 2006 Sales as reported Growth analysis Other 5% Local currencies Growth Share of Norditropin® SimpleXx® growth 5% +22% 9% Diabetes care Insulin analogues 56% 65% +21% Human insulin and 2% 5% NovoSeven® 15% insulin-related sales +19% OAD 21%
Slide 7: Insulin analogues sales - solid analogue growth continues
Insulin analogues sales - solid analogue growth continues Analogue sales development Analogue sales as reported Levemir® DKK 0.6bn +58% +258% NovoRapid® 2,800 DKK 2.6bn NovoMix® 12% +43% 2,400 DKK 1.8bn +56% DKK million 2,000 36% 52% 1,600 1,200 800 400 0 Q1 Q2 Sales of DKK 5.0 billion 2002 2006 (+5
Slide 8: A continued increase in analogue market share
A continued increase in analogue market share Novo Nordisk’s analogue Analogue penetration market share 40% 38% 35% 30% Analogues 46% 25% 7% 20% 15% Human insulin 10% 5% 0% Q1 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 7
Slide 9: Levemir reinforces European analogue market leadership
Levemir® reinforces European analogue market leadership Share of total analogues Novo Nordisk’s share of long- in Europe acting analogues in Europe 22% 20% 60% Novo Nordisk 20% Eli Lilly 18% 50% Sanofi-Aventis 16% 40% 14% 12% 30% 10% 8% 20% 6% 10% 4% 2% 0% 0% Q1 Q1 March May 2003 2006 2004 2006 Note
Slide 10: 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: 6.0% 50% Value: 11.7%* 40% DKK 42.9bn GR Novo Nordisk CA 30% Eli Lilly DKK 24.6 bn Sanofi-Aventis 20% tMU 218 tMU 163 10% 0% MAT Q
Slide 11: NovoSeven - growth continues
NovoSeven® - growth continues NovoSeven® sales development Key observations • Growth in the second quarter of 1.600 +21% 21% as reported, 20% in local currencies 1.400 1.200 • Europe and International DKK million Operations the main growth 1.000 drivers 800 • Growth driven by the congenital 600 haem
Slide 12: Norditropin SimpleXx - growth continues
Norditropin® SimpleXx® - growth continues Norditropin® SimpleXx® sales development Key observations +25% • Growth in the second quarter of 900 25% as reported, 26% in local 800 currencies 700 • Solid growth in North America, DKK million 600 Europe and International 500 Operations 400 • Continued suc
Slide 13: Sales by region
Sales by region - first six months of 2006 Sales as reported Growth analysis Japan & Oceania 0% Europe Local Growth Share of +12% currencies growth 12% International Europe 11% 27% Operations North America 24% 39% +41% 19% 38% International 34% 31% Operations Japan & Oceania 3% 3% 31% North America
Slide 14: North America
North America - continued solid growth driven by insulin analogues North America sales development Key observations Index local currencies • Strong growth in the second 350 quarter of 30% as reported, % 28% in local currencies 300 : 30 GR • Growth driven by insulin CA 250 analogues through market 20
Slide 15: US diabetes performance
US diabetes performance Novo Nordisk’s US insulin US insulin (vol) market sales development share development Index 80% local currencies 70% Novo Nordisk 400 Eli Lilly 350 60% Sanofi-Aventis % 300 : 38 50% A GR C 250 40% 200 30% 150 20% 100 10% 50 0 0% Q1 Q2 Q1 Q1 2002 2006 2002 2006 Note: Quarterly
Slide 16: Levemir launched in the US
Levemir® launched in the US Key observations on Levemir® Levemir® share of basal launch analogue prescriptions • Monthly market share gain of 0.5- 1.0 percentage points expected to 6% New prescriptions continue Total prescriptions 5% • High level of formulary coverage: more than 60% of total lives a
Slide 17: International Operations
International Operations – a current and future growth engine International Operations sales development Key observations Index local currencies • Growth in the second quarter of 300 28% as reported, 28% in local 25 % currencies 250 : A GR C • Growth is driven by insulin 200 analogues, human insulin
Slide 18: R&D update
R&D update 17
Slide 19: R&D portfolio - diabetes care
R&D portfolio - diabetes care Compound Type Indication Phase Levemir® Insulin analogue Types 1+2 Launched in the US, Europe, etc. Filed in JP NovoMix® 50 and 70 Insulin analogue Types 1+2 Approved in Europe Phase 3 in the US Liraglutide (NN2211) GLP-1 analogue Type 2 Phase 3 AERx® iDMS (NN1998) Inha
Slide 20: Impressive liraglutide phase 2b data
Impressive liraglutide phase 2b 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 approximatel
Slide 21: R&D portfolio - biopharmaceuticals
R&D portfolio - biopharmaceuticals Compound Indication Phase NovoSeven® Acquired haemophilia Filed* NovoSeven® Trauma Phase 3 NovoSeven® Intracerebral haemorrhage Phase 3 NovoSeven® Spinal surgery (dose escalation) Phase 2 completed** NovoSeven® Traumatic brain injury (dose escalation) Phase 2 compl
Slide 22: Financials
Financials 21
Slide 23: Financial results
Financial results DKK million H1 2006 H1 2005 % change Sales 18,673 15,541 20 Gross profit 14,006 11,246 25 Sales and distribution costs 5,578 4,406 27 Research and development costs 2,917 2,303 27 Administrative expenses 1,137 953 19 Operating profit 4,509 3,853 17 Net financials (289) 278 NA Net p
Slide 24: Strong gross margin development
Strong gross margin development Gross margin improvement analysis Key observations • Improvement of 170 basis points 76% • Productivity gains prime contributor bp – reflecting significant improvements 75% 70 +1 75.0 in insulin production efficiency 74% • Product and geographical mix also bp 73.3 110
Slide 25: Outlook 2006
Outlook 2006 • Sales growth expectations: Key currency rates • increased to 13−15% as reported DKK 2005 2006 Current • Operating profit growth expectations: per 100 average ytd avg rate* • increased to around 13% as reported USD 600 605 589 JPY 5.45 5.23 5.09 • increased to around 15% excluding curr
Slide 26: Novo Nordisk - concluding remarks
Novo Nordisk - concluding remarks Key growth drivers Strategic position • Leadership in diabetes care with • #1 in the global insulin market full portfolio of insulin analogues • #1 in the global analogue • NovoSeven® expanding into segment critical bleeding • #1 in the global haemophilia • Building
Slide 27: 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 28: Appendices
Appendices novo nordisk” 27
Slide 29: Strategy overview
Strategy overview 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
Slide 30: 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 23.2 21.1 20.4 21.5 24.7** 25 30
Slide 31: Solid insulin market growth
Solid insulin market growth - Novo Nordisk market leadership Market size Growth rates Novo Nordisk market share Market Novo Nordisk US 13.4% 39% ↑ 39% 4.5% Europe 4.9% 51% 5.9% 58% → Japan 6.5% 74% → 5% 7.3% World 7.6% 52% ↑ 100% 5.4% 0.00% 5.00% 10.00% 15.00% 20.00% Note: Volume data. Wal-Mart figu
Slide 32: Company market share in the US
Company market share in the US, vol. Company Market Share (US, vol.) 50 % 45 % 40.3 % 40 % 35 % 35.5 % MS% (MU) 30 % 25 % 24.2 % 20 % 15 % 10 % 5% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2005 2006 NOVO NORDISK LILLY SANOFI-AVENTIS 31
Slide 33: 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 70% 70% 64% 60% 60% 51% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q1 Q1 Q1 Q1 2002 2006 2002 2006 Note: Quarterly data, volume figures Source: IMS/BW 32
Slide 34: European analogue conversion - NovoRapid
European analogue conversion - NovoRapid® Analogue penetration short-acting segment Share of short-acting segment 30% NovoRapid® 25% Humalog Human insulin 20% 15% 54% 10% Analogues 5% 0% Q1 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 33
Slide 35: European analogue conversion - NovoMix
European analogue conversion - NovoMix® 30 Analogue penetration premixed segment Share of premixed segment 25% 20% NovoMix® 30 Human insulin 15% 10% Humalog Mix 25 30% 5% Analogues 0% Q1 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 34
Slide 36: European analogue conversion - Levemir
European analogue conversion - Levemir® Analogue penetration Novo Nordisk’s share of long- long-acting segment acting analogues in Europe 20% 18% 18% 16% 14% Human insulin 12% 10% 8% 6% 44% 4% 0% 2% Analogues 0% Q1 Q1 Q1 Q1 2000 2006 2004 2006 Note: Quarterly data, volume figures Note: Quarterly dat
Slide 37: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Analogue penetration short-acting segment Share of short-acting segment 70% 60% Human insulin 50% Humalog 66% 40% 30% NovoLog® 33% 20% Analogues 10% 0% Q1 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 36
Slide 38: 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 70/30 30% 5% Analogues 0% Q1 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 37
Slide 39: US long-acting analogue conversion
US long-acting analogue conversion Analogue penetration long-acting segment (US) Human insulin 56% Analogues Q1 Q1 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 38
Slide 40: 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 Q1 Q1 Q1 2000 2006 2000 2006 Note: Quarterly data, volume figures Source: IMS/BW 39
Slide 41: Biosimilars compete in a declining segment
Biosimilars compete in a declining segment World (IMS) analogue conversion, vol Analogues 46% Patent protected Human insulin 2000 Mid 2006 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 incr
Slide 42: US diabetes prevalence is rapidly growing
US diabetes prevalence is rapidly growing 1994 1999 2004 Analogues 42% <4% <4-6% >6% Notes: Rates reflect prevalence among adults. Source: Centers for Disease Control and Prevention (CDC) 41
Slide 43: 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 44: 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 43
Slide 45: The 1-2-3 Study of NovoMix 30
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 46: Levemir reduces hypoglycaemia vs. Lantus and NPH
Levemir® reduces hypoglycaemia vs. Lantus and NPH… Note: Based on a subgroup of 260 T2 patients switched from Lantus +/- OADs and 251 T2 patients switched from NPH +/- OADs to Levemir® +/- OADs. Data are mean values. †p<0.01; *p<0.001 vs. baseline. Source: Dornhorst et al., 614-P, ADA 2006. 45
Slide 47: … with an improved glycaemic control
… with an improved glycaemic control… Note: Based on a subgroup of 260 T2 patients switched from Lantus +/- OADs and 251 T2 patients switched from NPH +/- OADs to Levemir® +/- OADs. Data are mean values. †p<0.01; *p<0.001 vs. baseline. Source: Dornhorst et al., 614-P, ADA 2006. 46
Slide 48: … and a reduction in weight
… and a reduction in weight Note: Based on a subgroup of 260 T2 patients switched from Lantus +/- OADs and 251 T2 patients switched from NPH +/- OADs to Levemir® +/- OADs. Data are mean values. †p<0.01; *p<0.001 vs. baseline. Source: Dornhorst et al., 614-P, ADA 2006. 47
Slide 49: 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. 48
Slide 50: 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 49