Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — H1 2004 Earnings Presentation
52 slides from Novo Nordisk A/s Class B's earnings presentation, August 2004
Slide 1: Novo Nordisk: A focused healthcare company
Novo Nordisk A focused healthcare company Investor presentation – August 2004
Slide 2: Agenda
Agenda • Introduction • Sales update • Diabetes care • NovoSeven® • North America update • Research & development update • Financial results • Outlook for 2004 2
Slide 3: 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 4: Highlights
Highlights Market development: • Continued solid performance of Novo Nordisk’s analogues • Market share gains for both NovoRapid® and NovoMix® 30 • Levemir® launched in UK and Finland • NovoSeven® growth continues Research and development: • NovoMix®50 and NovoMix®70 filed for approval in Europe N
Slide 5: Key products continues to drive growth
Key products continues to drive growth Share of growth Share of sales Other Insulin Insulin biopharmaceuticals analogues analogues 55% NovoSeven® 18% Other 16% NovoSeven® biopharmaceuticals Other diabetes care 11% Other diabetes care 0% 20% 40% 60% Total sales DKK 13,789 billion +14% Y/Y in local cu
Slide 6: Solid volume growth in the insulin market
Solid volume growth in the insulin market Market size Growth rates Novo Nordisk market share Market Novo Nordisk USA 4.1% 32% ▲ 41% 15.6% Europe 7.6% 49% 7.7% 58% - Japan 10.7% 76% - 5% 10.9% 6.1% World 49% ▲ 100% 10.1% Note: Wal*Mart figures not included. Market size and share as MAT Q1 2004 and gr
Slide 7: Analogues sales development: Key observations
0 200 400 600 800 1,000 1,200 DKK Mill. Q1 2002 Analogues Analogues sales development Q2 2004 +81% Key observations - local currency growth of 90% • Growth in second quarter of 86% in local currencies • Growth of 90% in local currencies for the first half of 2004 • Strong NovoRapid® and NovoMix® 30
Slide 8: A continued increase in analogue market share
A continued increase in analogue market share Novo Nordisk’s analogue Analogue penetration market share 30% 25% 20% Human insulin 15% 10% 33% 5% Analogues 7% 0% Q1 Q1 Q1 Q1 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 8
Slide 9: NovoRapid: driver in short-acting segment
0% 10% 20% 30% 40% Q1 2000 Source: IMS/BW Note: Quarterly data, volume figures NovoRapid® NovoRapid®’s share of short-acting analogues Q1 2004 Key observations - driver in short-acting segment • Providing flexible and meal-time related dosing • Proven efficacy and safety • 2/3 of NovoRapid are sold
Slide 10: NovoMix - the starter insulin
NovoMix® - the starter insulin NovoMix®’s share of Percentage of patients premixed analogues with HbA1c < 40% 7% 30% 80% 71% 20% 60% 45% 40% 10% 20% 0% 0% Q1 NovoLog® Mix Insulin glargine Q1 70/30 (Lantus) 2000 2004 Note: Quarterly data, volume figures Sources: IMS/BW and data presented at ADA 2004
Slide 11: Levemir - completing the portfolio
# of events per year 0,5 2 (Levemir®) Insulin detemir Hypoglycemia Hyperglycemia Levemir® Source: Diabetes, Vol 53, June 2004 (too low blood sugar) (too high blood sugar) 10 events with Levemir® 27 (Lantus) Less hypo- and hyperglycemic Insulin glargine Key observations - completing the portfolio • P
Slide 12: Device penetration continues - driven by FlexPen
Device penetration continues - driven by FlexPen™ % of patients feeling device Pen market shares will result in better 30% compliance 74 25% Disposable share of overall market 20% # in % 15% 10% FlexPen™ share of disposable market 5% 11 0 0% Q1 Q1 FlexPen™ Lilly NPH pen Aventis' 2000 2004 prefilled
Slide 13: The insulin business case
The insulin business case Improving convenience, compliance and control Volume growth drivers: Disposables Vials Durables • Epidemic growth Insulin • Increased life expectancy analogues • Increasing awareness leading to increasing diagnosis rate Human insulin • Earlier switches from tablets to insul
Slide 14: NovoSeven sales development - growth continues
0 200 400 600 800 1,000 1,200 DKK Mill. Q1 2002 NovoSeven NovoSeven sales development Q2 +10% 2004 - growth continues Key observations • Growth in second quarter of 13% in local currencies • Growth of 17% in local currencies for the first half • Growth driven by Europe and North America • Growth in
Slide 15: North America is the key growth driver
North America is the key growth driver Share of growth Share of sales Japan & North America 55% Oceania North America Europe 21% International Operation International operations 14% Japan & Oceania 10% 0% 20% 40% 60% Europe Total sales DKK 13,789 billion +14% Y/Y in local currencies Note: Share of g
Slide 16: Novo Nordisk in North America - an expanding organisation
North America Novo Nordisk in North America US headquarters - an expanding organisation Development, sales, Formulation, filling, and marketing and packaging Princeton Clayton Number of employees 365 employees compared to 198 in Q1 2000 1,381 1,143 993 1,014 457 Q1 2001 2002 2003 June 2000 2004 16
Slide 17: North America - a significant contributor to growth
North America North America - a significant contributor to growth Sales index Share of Novo Nordisk (local currency) growth (local currency) 300 70% Sales index 250 60% Share of Novo Nordisk 50% 200 growth (right axis) 40% 150 30% 100 20% 50 10% 0 0% Q1 Q2 2000 CAGR 24% 2004 17
Slide 18: North America in early 2000 - a strategic change needed
North America North America in early 2000 - a strategic change needed North America Key strategic issues Sales composition Q2 2000 Other • Several unsuccessful partnerships biopharmaceuticals Diabetes care • Prandin focused strategy, though less than NovoSeven® of 2% volume market share of overall O
Slide 19: Key strategic changes
North America Key strategic changes Refocus in 2000 Product launches Other changes • Change of focus. Insulin • NovoLog® • Corporate branding first detailing • NovoLog® Mix 70/30 • Diabetes field force • Establishing own diabetes FlexPen expansion care sales force • NovoLog® FlexPen • Managed care a
Slide 20: Strategic new products driving growth
North America Strategic new products driving growth Sales North America Insulin analogues NovoSeven® Other diabetes care Other biopharmaceuticals Q1 Q2 2000 2004 Sales in local currencies 20
Slide 21: Diabetes care - expansion strategy paying off
North America Diabetes care - expansion strategy paying off Novo Nordisk’s US insulin market shares 35% 45% 30% 40% 35% 25% 30% 20% 25% 15% 20% 15% 10% 10% 5% 5% 0% 0% Q1 Q1 Q1 Q1 2000 Overall market share 2004 2000 Premix market share 2004 Analogue market share Short-acting market share Long-acting
Slide 22: Diabetes care - Novo Nordisk now US device leader
North America Diabetes care - expansion strategy paying off Novo Nordisk now US device leader US pen penetration growing Novo Nordisk’s pen market shares Total insulin Total insulin market market Insulin Insulin analogues analogues 0% 5% 10% 15% 20% 0% 20% 40% 60% Q1 2000 Q1 2002 Q1 2004 Source: IMS
Slide 23: Status 2004
North America Status 2004 • Competitive diabetes sales force • Insulin analogue focused strategy, significant player in the insulin market • Significant growing presence in the insulin market • 33% volume market share • Retail market share 24% • Analogue market share 17% • 12% of Novo Nordisk insuli
Slide 24: Further upside ahead - diabetes care
North America Further upside ahead - diabetes care The US insulin market Novo Nordisk’s market shares Volume 70% Non retail 60% Non retail market share 50% Retail 40% • Analogue insulin focused strategy is 30% targeting the retail segment Retail market share 20% • Significant value upgrade opportuni
Slide 25: Further upside ahead - biopharmaceuticals
North America Further upside ahead - biopharmacuticals NovoSeven® Novo Nordisk’s growth Expanding the use hormone market share • Field force effectiveness • Dedicated hGH reps • Increasing the number of medical • Expanding the label for Norditropin® liaisons Simplexx • New indications pursued • Trau
Slide 26: R&D pipeline update
R&D pipeline update Diabetes care • “High mix” NovoMix® filed for marketing approval in Europe (NovoMix® 50&70) and Japan (NovoMix® 50) • AERx iDMS pharmacokinetic study, added to the ongoing phase 3 safety trial, to report in the first half of 2005. NovoSeven ® • Filing for EU approval within blunt
Slide 27: NovoSeven in trauma - less transfusions and fewer complications
NovoSeven® in trauma - less transfusions and fewer complications Key observations Complications • 1.5 million trauma victims in the 30 rFVIIa Western world Percent of patients - blunt Placebo 25 • 100,000 trauma victims receive more than two bags of red blood 20 cells (RBC) 15 NovoSeven showed 10 •
Slide 28: NovoSeven in ICH - significant effect on disability
NovoSeven® in ICH Key observations - significant effect on disability Modified Rankin Scale at Day 90 • No existing treatment for ICH 160 μg/kg • 100,000 patients eligible for treatment with NovoSeven® 80 μg/kg 40 μg/kg NovoSeven showed • Significant reduction in ICH Placebo volume expansion • Signi
Slide 29: Financial results
Financial results DKK million First half year Second quarter 2004 2003 % change 2004 2003 % change Sales 13,789 12,533 10 7,222 6,477 12 Operating profit 3,427 3,062 12 1,911 1,665 15 Net financials 107 521 (79) 20 287 (93) Profit before tax 3,534 3,583 (1) 1,931 1,952 (1) Net profit 2,367 2,361 - 1
Slide 30: Currency exposure
Currency exposure Effect of 5% depreciation on full- year operating profit* 9.0 avg = 7.88 (DKK million) USD -210 8.0 JPY -130 USD GBP -75 avg = 6.59 7.0 YTD 2004 USD rel -50 JPY avg = 6.07 * currency hedging income is recorded as financial 6.0 avg = 6.30 income YTD 2004 avg = 5.68 avg = 5.59 5.0 20
Slide 31: Outlook for 2004
Outlook for 2004 • Sales growth expectations: • 11–14% growth in local currencies • Close to 10% as reported Key currency rates • Operating profit growth expectations: DKK 2003 2004 Current per 100 average ytd avg rate* • Underlying growth now expected to grow by 17-20% USD 659 607 607 JPY 5.68 5.59
Slide 32: 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 Novo Allé, DK2880 Bagsværd exchanges in Copenhagen Fax (+45) 4443 6633 and London. Its ADRs are Peter Haahr listed on the New York Stock Tel (direct
Slide 33: Appendix
Appendix 33
Slide 34: Insulin secretion in people without diabetes and with 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. 34
Slide 35: Diagnosed but not adequately treated
Diagnosed - but not adequately treated Insulin is the ultimate treatment Only 1/3 are at goal Diet and 100 exercise alone 27 32 80 -Cell function Oral % of subjects therapy Typ 60 15 e 2- 19 slop Oral/insulin e 20 40 22 Insulin 20 38 27 Type 1 - Immediate need for insulin 0 OAD Insulin Time from di
Slide 36: European analogue conversion - NovoRapid
European analogue conversion - NovoRapid® Short-acting segment in Europe Share of short-acting segment 30% 25% Humalog market share 25% Short-acting 20% human insulin 15% 47% NovoRapid® 10% market share 21% 22% Short-acting 5% insulin analogues 0% Q1 Q1 Q1 Q1 2000 2004 2000 2004 Note: Quarterly data
Slide 37: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Short-acting segment in the US Share of short-acting segment 60% Humalog Short-acting 50% market share 45% human insulin 40% 62% 30% NovoLog® market share 17% 33% Short-acting 20% insulin analogues 10% 0% Q1 Q1 Q1 Q1 2000 2004 2000 2004 Note: Quarterly data, volume
Slide 38: Insulin segmentation - Europe and the US
Insulin segmentation - Europe and the US Europe US 50% 50% 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% Long-acting Long-acting 15% 15% Premix Premix 10% 10% Short-acting Short-acting 5% 5% 0% 0% Q1 Q1 Q1 Q1 2000 2004 2000 2004 Note: Quarterly data, volume figures Source: IMS/BW 38
Slide 39: Superior treatment with Levemir and NovoRapid versus human insulin regimen
Superior treatment with Levemir® and NovoRapid® versus human Change in Hb1Ac insulin regimen 0.5 p < 0.001 0 -0.5 -0.28 Better effect with fewer side Levemir®/NovoRapid® -0.5 effects Human insulin Change in body Nocturnal hypoglycaemia Hypoglycaemia all weight p < 0.001 p < 0.001 p < 0.001 1 3 15 -0
Slide 40: Liraglutide - the first once-daily human GLP-1 analogue
Liraglutide - the first once-daily human GLP-1 analogue Fasting serum % • Rapid and sustained m Weight change M glucose glycaemic control, weight 1 control, increased beta-cell mass and improved beta-cell 0 function, safe 0 • Phase 3 expected to start by -1 end of 2004 -1 • Following optimization of
Slide 41: 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 41
Slide 42: NovoSeven - expanding into general haemostasis
NovoSeven® - expanding into general haemostasis Congenital clotting disorders Bleedings in High single-dose Trauma emergencies FVII deficiency Intracerebral Acquired haemorrhage Prophylaxis haemophilia Glanzmann’s UGI Variceal Orthopedic bleedings surgery Liver transplantation Hepatectomy Spinal sur
Slide 43: Many trauma patients require blood transfusion
Many trauma patients require blood transfusion Relationship between no of units of blood transfused in the first • ~ 10-20% of all trauma 12h and the incidence of MOF2 patients receive one or 0.6 more transfusions1 Incidence of MOF 0.5 • ~ 50% of trauma patients admitted to an ICU will 0.4 receive t
Slide 44: rFVIIa reduces the need for transfusion in blunt trauma
rFVIIa reduces the need for transfusion in blunt trauma 100 90 80 Percent of patients 70 60 P= 0.019 50 40 rFVIIa (n=52) 30 Placebo (n=59) 20 10 0 0 5 10 15 20 25 30 35 40 45 50 RBC units within 48 hours in patients alive Source: Data presented at World Congress on Trauma, Shock, Inflammation and Se
Slide 45: Adverse events
Adverse events Blunt Placebo (n=74) rFVIIa (n=69) n % n % All adverse events 54 73.0 49 71.0 (patients) All adverse events 135 112 (events) Penetrating Placebo (n=64) rFVIIa (n=70) n % n % All adverse events 40 62.5 43 61.4 (patients) All adverse events 113 85 (events) Source: Data presented at Worl
Slide 46: Incidence of thrombo-embolic events similar to placebo
Incidence of thrombo-embolic events similar to placebo Blunt Placebo (n=74) rFVIIa (n=69) n % Events n % Events Thrombo- 3 4.1 3 3 4.1 3 embolic events All adverse 54 73.0 135 49 71.0 112 events Penetrating Placebo (n=64) rFVIIa (n=70) n % Events n % Events Thrombo- 3 4.7 3 3 4.3 3 embolic events Al
Slide 47: Intracerebral haemorrhage - key observations
Intracerebral haemorrhage – key observations Number of patients in Intracerebral haemorrhage triad markets • In the Western world, stroke is the 3rd Around most common cause of death and the 2nd 250,000 of neurologic disability after Alzheimer • The number one leading cause of institutional placemen
Slide 48: Intracerebral haemorrhage - the deadliest form of stroke
Intracerebral haemorrhage - the deadliest form of stroke Correlation between haematoma volume and mortality* 75% 46% 19% Less than 30mL Between 30mL and 60mL More than 60mL Note: * 30 day mortality as a function of haematoma volume Source: Stroke 1993, Vol 24, 987-993 & International Task Force for
Slide 49: Results of the study
Results of the study Data on primary end point Data on secondary end points Score on ICH volume Significant stroke scales: Significant expansion reduction day 15 and 90 improvement Data on overall safety Data on pharmaco-economics Safety end • Days in points (AEs No significant hospital Being and SA
Slide 50: Today's treatment of intracerebral haemorrhage
Today’s treatment of intracerebral haemorrhage Diagnosis Symptomatic Surgery*: Return through CT treatment: to ICU or scan: death • Ischaemic • Anticonvulsants • Open craniotomy or • Antihypertensives • Stereotactically • haemorrhagic • Intubation and mechanical guided stroke ventilation endoscopic
Slide 51: Long-term financial targets and returning cash to shareholders
New share repurchase programme initiated 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
Slide 52: Medicare Reform: Key observations
Key observations • Creates partial prescription drug coverage to 65+ population, from 2006 • 6.1 million insulin prescriptions for among 65+ population • Provides voluntary drug discount cards until 2006 (currently 4 million enrollees) • Shifts “Part B” reimbursement (from AWP to ASP) • Institutes c