Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — Q1 2006 Earnings Presentation
52 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 – First three 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 & strategy • Sales update • International Operations • R&D update • Financials 2
Slide 4: Highlights from first three months of 2006
Highlights from first three months of 2006 Market development: • Sales growth driven by insulin analogues: +60% as reported • NovoSeven® growth continues: +16% as reported • Growth hormone showed strong performance: +19% as reported Research and development: • Liraglutide phase 3 study initiated in
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 – first three months of 2006 Sales as reported Growth analysis Other +16% Local currencies Growth Share of Norditropin® growth +19% 5% 8% Diabetes care Insulin analogues 54% 60% +26% Human insulin and 6% 15% NovoSeven® 14% insulin-related sales +16% OAD 19% 6% D
Slide 8: Insulin analogues - solid analogue growth continues
Insulin analogues - solid analogue growth continues Analogue sales development Analogue sales split Levemir® DKK 0.3bn NovoRapid® +60% 2,400 NovoMix® DKK 1.2bn 13% DKK 0.8bn 2,000 DKK million 1,600 36% 52% 1,200 800 400 0 Q1 Q1 Sales of DKK 2.3 billion 2002 2006 (+54% growth in local currencies) 7
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 44% 25% 7% 20% 15% Human insulin 10% 5% 0% Q1 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 8
Slide 10: 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 18% 60% Novo Nordisk 16% Eli Lilly 50% Sanofi-Aventis 14% 40% 12% 10% 30% 8% 20% 6% 4% 10% 2% 0% 0% Q1 Q4 Q1 Q4 2003 2005 2004 2005 Note: Quarterly data
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: 6.0% 50% Value: 11.4%* 40% DKK 41.0 bn GR CA 30% Novo Nordisk Eli Lilly DKK 24.6 bn Sanofi-Aventis 20% tMU 215 tMU 163 10% 0% MAT
Slide 12: NovoSeven - growth continues
NovoSeven® - growth continues NovoSeven® sales development Key observations • Growth in the first quarter of 1,400 +16% 16% as reported, 10% in local currencies 1,200 • Europe and International 1,000 DKK million Operations the main growth 800 drivers 600 • Growth driven by the congenital and acquire
Slide 13: Norditropin - progress continues
Norditropin® - progress continues Norditropin® sales development Key observations 800 • Growth in the first quarter of +19% 19% as reported, 16% in local 700 currencies 600 • North America, Europe and DKK million 500 International Operations 400 contributed to growth 300 • Continued success of the 2
Slide 14: Sales by region
Sales by region - first three months of 2006 Sales as reported Growth analysis Japan & Oceania -1% Europe Local Growth Share of +13% currencies growth 11% International Europe 13% 29% Operations North America 20% 33% +56% 20% 38% International 42% 37% Operations Japan & Oceania 1% 1% 31% North Ameri
Slide 15: Levemir launched in the US
Levemir® launched in the US • The biggest product launch ever for Novo Nordisk in the US • Best in class formulary coverage at this point of the launch • Novo Nordisk is the first and only company in the US offering a complete portfolio of insulin analogues • Key advantages of Levemir®: - Levemir® o
Slide 16: North America - regional sales update
North America - regional sales update North America sales development Key observations Index local currencies • Strong growth in the first quarter 300 of 32% as reported, 20% in local % currencies : 29 250 GR • Sales positively impacted by DKK CA 200 100 million due to pre-launch stocking of Levemir
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% Novo Nordisk 400 Eli Lilly 350 60% Sanofi-Aventis % 300 : 40 50% A GR C 250 40% 200 30% 150 20% 100 50 10% 0 0% Q1 Q1 Q1 Q4 2002 2006 2002 2005 Source: IMS/BW
Slide 18: International Operations
International Operations 17
Slide 19: 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 first quarter of 56% 250 as reported, 42% in local 25 % currencies : A GR 200 C • Growth is driven by human insulin, insulin analogues and
Slide 20: Solid sales growth in BRIC countries
Solid sales growth in BRIC* countries… Novo Nordisk’s sales development in BRIC countries (index) Key observations Index local currencies • Solid sales development in BRIC 450 countries 400 • Novo Nordisk is the insulin 350 market share leader in all BRIC 300 43 % countries : GR CA • Novo Nordisk is
Slide 21: … and clear market leadership
… and clear market leadership Brazil India Insulin volume market share development Insulin volume market share development 100 % 100 % 80 % 70.5 % #1 80 % 61.0 % #1 MS% (MU) MS% (MU) 60 % 60 % 40 % 40 % 21.0 % 18.8 % 20 % 20 % 8.5 % 8.6 % 6.6 % 2.3 % 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 22: China continues to be the main growth driver
China continues to be the main growth driver • More than 50% compound annual growth rate since Q1 2002 • DKK 1 billion in sales reached in 2005 • Sales growth driven by human insulin and NovoNorm® • High pen penetration around 80% • Rapid expansion of sales force, now more than 500 sales reps • Manu
Slide 23: R&D update
R&D update 22
Slide 24: R&D update - diabetes care
R&D update - diabetes care Compound Type Indication Phase Levemir® Insulin analogue Type 1+2 Launched in US, Europe, etc. Filed in JP NovoMix® 50 and 70 Insulin analogue Type 1+2 Approved in EU US filing pending* Liraglutide (NN2211) GLP-1 analogue Type 2 Phase 3 AERx® iDMS (NN1998) Inhaled insulin
Slide 25: R&D update - biopharmaceuticals
R&D update - 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® Upper gastro-intestinal bleedings Phase 2 NovoSeven® Cardia
Slide 26: Financials
Financials 25
Slide 27: Financial results
Financial results DKK million Q1 2006 Q1 2005 % change Sales 8,946 7,258 23 Gross profit 6,531 5,173 26 Sales and distribution costs 2,728 2,139 28 Research and development costs 1,419 1,106 28 580 483 20 Administrative expenses 1,880 1,512 24 Operating profit Net financials (151) 276 NA Net profit
Slide 28: Outlook 2006
Outlook 2006 • Sales growth expectations: • 11 - 13% as reported • Operating profit growth expectations: Key currency rates • Slightly above 10% DKK 2005 2006 Current • Around 10% excluding currency movements and per 100 average ytd avg rate* non-recurring items USD 600 619 603 • Net financial expen
Slide 29: 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 30: 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 31: Appendices
Appendices novo nordisk” 30
Slide 32: 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 33: Solid insulin market growth
Solid insulin market growth - Novo Nordisk market leadership Market size Growth rates Novo Nordisk market share Market Novo Nordisk US 15.5% 39% ↑ 40% 5.2% Europe 4.8% 5.9% 58% → 50% Japan 6.2% 74% → 5% 7.3% World 8.3% 51% ↑ 100% 5.7% 0.00% 5.00% 10.00% 15.00% 20.00% Note: Volume data. Wal-Mart figu
Slide 34: US company market share, volume
US company market share, volume Company market share (US, vol.) 45 % 39.8 % 40 % 35 % 36.7 % 30 % MS% (MU) 25 % 20 % 23.4 % 15 % 10 % 5% 0% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2005 2006 LILLY NOVO NORDISK SANOFI-AVENTIS Source: IMS/BW 33
Slide 35: 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% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q1 Q4 Q1 Q4 2002 2005 2002 2005 Note: Quarterly data, volume figures Source: IMS/BW 34
Slide 36: 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% 53% 10% Analogues 5% 0% Q1 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 35
Slide 37: European analogue conversion - NovoMix
European analogue conversion - NovoMix® 30 Analogue penetration premixed segment Share of premixed segment 20% 15% NovoMix® 30 Human insulin 10% Humalog Mix 25 5% 29% Analogues 0% Q1 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 36
Slide 38: 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% 42% 4% 0% 2% Analogues 0% Q1 Q4 March February 2004 2006 2000 2005 Note: Quarterly data, volume figures Note: Monthly data
Slide 39: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Analogue penetration short-acting segment Share of short-acting segment 70% 60% Humalog Human insulin 50% 66% 40% 30% 33% 20% NovoLog® Analogues 10% 0% Q1 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 38
Slide 40: 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 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 39
Slide 41: US long-acting analogue conversion
US long-acting analogue conversion Analogue penetration long-acting segment (US) Human insulin 54% Analogues Q1 Q4 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 40
Slide 42: 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 Q4 Q1 Q4 2000 2005 2000 2005 Note: Quarterly data, volume figures Source: IMS/BW 41
Slide 43: Biosimilars compete in a declining segment
Biosimilars compete in a declining segment World (IMS) analogue conversion, vol. Analogues 44% 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 44: Obesity and diabetes prevalence in the US
Obesity and diabetes prevalence in the US Obesity prevalence 2004 Diabetes prevalence 2004 Analogues 42% <15-19% ≥20% <4-6% >6% Notes: Rates reflect prevalence among adults. Obesity is defined as BMI ≥ 30. Source: Centers for Disease Control and Prevention (CDC) 43
Slide 45: 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 46: 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 45
Slide 47: 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 48: 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 49: 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 50: 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 51: 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. 50
Slide 52: 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 51