Novo Nordisk A/s Class B · OMXCOP:NOVO_B
Novo Nordisk A/s Class B — Non-Deal Roadshow (August 2001)
51 slides from Novo Nordisk A/s Class B's roadshow presentation, August 2001
Slide 1: Novo Nordisk
Novo Nordisk A focused global healthcare company with biotech expertise Investor Presentation August 2001 1
Slide 2: Novo Nordisk today
Novo Nordisk today Consistent, strong organic growth Focused on few therapeutic areas with large unmet medical needs Leadership in diabetes and most extensive diabetes pipeline in the industry Becoming an established player in general haemostasis management Proven biotech and drug delivery capabilit
Slide 3: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorders Secondary Human growth Intellectual value HRT drivers hormone property 3
Slide 4: Turnover by Therapy first half year 2001
Turnover by Therapy first half year 2001 Key observations: HRT Growth driven by sales of hGH (+15%) insulin and continued growth in (+6%) sales of NovoNorm® /Prandin® Coagulation High growth in the US supported by increasing sales disorders in Europe and Rest of World (+45%) Diabetes care Solid grow
Slide 5: Turnover by Region first half year 2001
(-2%) Japan USA (+38%) RoW (+16%) (+18%) Europe Total turnover of DKK 11,351 mn (+17%) NovoSeven® and diabetes Increasing care partly fuelled by insulin Strong market insulin market growth NovoNormDepreciation ® tender JPY shareofand and and strong continued stock penetration of adjustments orders i
Slide 6: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorders Secondary Human growth Intellectual value HRT drivers hormone property 6
Slide 7: Novo Nordisk - Diabetes care
Novo Nordisk - Diabetes care Building on more than 75 years of experience within diabetes Dominant position in insulin markets of Europe and Japan – solid growth in the US More than 2,000 R&D employees dedicated to diabetes, representing approximately ¾ of R&D resources Most complete portfolio of ne
Slide 8: Diabetes – an unfolding epidemic
Diabetes – an unfolding epidemic "There is no such thing as mild diabetes, Type 2 is a killer.” (Professor Eberhard Standl, executive chairman of the Diabetes Research Institute in Munich) The prevalence of diabetes rose from 4.9% in 1990 to 6.5% in 1998 – an increase of 33% (US Center for Disease C
Slide 9: Towards more intensive/flexible treatment
Towards more intensive/flexible treatment Novo Nordisk Insulin market volume market share 2001 180 +6% 160 +8% +8% 25% 140 +3% 39% Mega Units in 1,000 +5% 120 19% 33% 100 Short-acting 39% 80 60 40 52% 47% 36% 20 0 Premixed 1996 1997 1998 1999 2000 2001 Short-acting market growth: 11.5% CAGR since 19
Slide 10: Insulin market overview
Insulin market overview (’01/ ’00 MAT Q1 Volumes) % market size Market growth Novo Nordisk (‘01/’00) market share USA 0.8% 43% 26% Europe 11.8% 57% 47% Japan 9.1% 4% 80% RoW 4.0% 6% 60% World 6.2% 100% 45% Notes: Industrialised world only. Wal*Mart figures not included. Growth in Europe effected +1%
Slide 11: Upgrading the insulin market
Insulin analogue (+30% premium) penetration 100% 0% USA epremium) penetration Upgrading the insulin market Europe Japan 100% per patient Increasing turnover 11
Slide 12: Key insulin market observations
Key insulin market observations Volume Product upgrades No of people with diabetes Insulin analogues expected to double by 2025 Insulin delivery systems Increased diagnosis rate Intensified therapy Adding 5% to annual growth + Adding 5% to annual growth 12
Slide 13: Insulin sales key observations
1,000 2,000 3,000 4,000 0 DKK million 1999 Insulin etc 2000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2001 +11% Key observations: Growth of 13% in H1 2001 vs H1 2000 In the US sales growth primarily driven by tenders and Wal*Mart NovoLog® and InDuoTM on track for US launch this year Sales in Europe benefiting f
Slide 14: Insulin remains the ultimate treatment
Insulin remains the ultimate treatment Diet and exercise Oral products -Cell function ( % of healthy ) (approx 66%) 60 40 Insulin 20 (approx 27%) Oral/insulin 0 (approx 7%) 0 1 2 3 4 5 6 Years from randomisation Adapted from UK Prospective Diabetes Study (UKPDS) Group. Diabetes. Diabetes. 1995; 44:
Slide 15: NovoNorm/Prandin key observations
500 100 200 300 400 0 DKK million 1999 2000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 +49% 2001 NovoNorm® /Prandin® Key observations: Growth of 50% in H1 2001 vs H1 2000 In Europe NovoNorm ® continued to penetrate nicely First half 2001 effected by tender orders in Russia and stock piling in the US First move i
Slide 16: Growth opportunities in OAD
Growth opportunities in OAD Growth in USD 5.8 bn OAD market Key observations Novo Nordisk 350 Sales development in USD 300 CAGR: 26% Experience in the OAD market from MATQ1.1996=100 250 NovoNorm® /Prandin® 200 Novartis partner on NN622 for North 150 America No of treated patients 100 CAGR: 13% Broad
Slide 17: Diabetes pipeline
Diabetes pipeline Phase 1 Phase 2 Phase 3 NN414 NN1998 NN304 (Insulin secretion) (AERx) (Basal analogue) NN4201 NN2344 (Hepatic glucose regulator) (Insulin sensitiser) NN622 NN1215 (Dual-acting sensitiser) (LABI) NN2211 (GLP-1 analogue) 17
Slide 18: Attractive late stage diabetes pipeline
Attractive late stage diabetes pipeline OAD drugs and Insulin Insulin Hepatic Delay of Reduc. of glucose glucose Body Beta cell diabetic Novo Nordisk defi- sensi- regula- absorp- weight rescue dyslipi- MS ciency tivity Phase 2 projects tion tion daemia Metformin (eg Glucophage, Glucovance) + 0 36% S
Slide 19: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorders Secondary Human growth Intellectual value HRT drivers hormone property 19
Slide 20: Coagulation disorders (NovoSeven) key observations
250 500 750 1.000 0 DKK million 1999 2000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 +31% 2001 Key observations: Growth of 45% in H1 2001 vs H1 2000 Increased use for patients with acquired haemophilia and for surgical procedures Increased investigational use Impact from temporary Coagulation disorders (NovoSeve
Slide 21: Advantages of NovoSeven
Advantages of NovoSeven® The key advantages of NovoSeven® are: FVIIa/NovoSeven® Injury site selective activation of platelets Tissue factor creates high local thrombin generation which secures a tight fibrin clot Efficacy independent of inhibitor titer Effective during & after surgery Low thrombogen
Slide 22: Beyond haemophilia treatment
Beyond haemophilia treatment NovoSeven® in bleeding conditions Coagulation factor deficiencies Platelet defects General haemostasis Haemostasis Reduction of blood and plasma transfusions No product offers this safety and efficacy profile Management Increasing supportive data from investigational use
Slide 23: NovoSeven indication expansions
NovoSeven® indication expansions Coagulation Factor Platelet General Deficiency Disorder Haemostasis Single Multiple Lack of Defective Surgical Spontaneous Factor Factors platelets platelets bleeding bleeding Haemophilia Upper Stem cell Liver resection Intra-cerebral with inhibitors gastrointestinal
Slide 24: Building Strong Scientific Evidence
Building Strong Scientific Evidence Clinical area Status on project Orthotopic liver transplantation* Ongoing Ph 2/3 project Upper GI bleeds* Ph 2 study has been initiated Liver resection* Ph 2 study has been initiated Liver resection Exploratory Ph 2 study has been initiated Bone marrow transplan
Slide 25: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorder Secondar Secondary y Human growth Intellectual value HRT drivers hormone property 25
Slide 26: Human growth hormone key observations
0 100 200 300 400 500 600 700 DKK million 1999 2000 2001 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 +8% Key observations: Growth of 6% in H1 2001 vs H1 2000 Japan negatively impacted by inventory adjustments in Human growth hormone sales Q4 2000 and the depreciation of JPY Market share gains from continued roll-
Slide 27: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorder Secondar Secondary y Human growth HRT Intellectual value drivers hormone property 27
Slide 28: Hormone Replacement Therapy key observations
0 100 200 300 400 DKK million 1999 2000 2001 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 +13% Key observations: Growth of 15% in H1 2001 vs H1 2000 ActivelleTM and Vagifem® main contributors to growth in Europe Hormone Replacement Therapy Growth in the US positively affected by Phamacia launching ActivellaTM and
Slide 29: Novo Nordisk – Future Key Drivers
Novo Nordisk – Future Key Drivers Primary Coagulation growth Diabetes care drivers disorder Secondary Human growth HRT Intellectual value drivers hormone property 29
Slide 30: No significant patent expirations
0% 10% 20% 30% 40% 50% 60% AstraZ. S-Plough Merck Eli Lilly Pfizer Aventis Source: Nordea Securities BMS GSK Roche Novartis Pharmacia No major patent expirations J&J AHP Abbott No significant patent expirations on this side of 2010 *) Amgen % of 2000 sales with patents expiring in 2001-2005 Products
Slide 31: Financials
Financials beeing theve . io} novo nordisk 31
Slide 32: Financial results first half year 2001
Financial results first half year 2001 DKK million 2001 2000 % change Net turnover 11,351 9,669 17 Operating profit as reported 2,740 2,271 21 Operating profit adjusted*) 2,445 1,941 26 Financial items 241 6 N/A Profit before tax 2,981 2,277 31 Net profit 1,908 1,420 34 Earnings per share (DKK) 5.48
Slide 33: Updated outlook for 2001
Updated outlook for 2001 Growth in operating profit of 15% is expected Net financial income is expected to be approx DKK 300 million Tax rate expected at 36% Investments expected to be approx DKK 3.5 billion Above outlook is based on the assumption that exchange and interest rates remain at the curr
Slide 34: Long-term Financial Targets
Long-term Financial Targets Observations from 2000 Financial targets EBIT growth of 37% EBIT growth of 15% per annum EBIT margin of 23.1% EBIT margin of 25% ROIC (post-tax) of 22.3% ROIC of 25% (post-tax) per annum Cash earnings ratio of 87.9% Cash to earnings of 60% Balancing growth and value 34
Slide 35: Novo Nordisk – Key Drivers
Novo Nordisk – Key Drivers Diabetes care Coagulation disorders World leader with steady growth Estimated market potential for more than 75 years for current NovoSeven® indication of USD 350 million 2/3 of business (insulin) growing >10% pa Entering 6 new clinical areas Primary with 8 new studies in
Slide 36: 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. Such forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from expectatio
Slide 37: Investor Information
Investor Information Investor Relations contacts: Share information Novo Nordisk A/S Novo Nordisk’s B shares are listed Investor Relations Novo Allé on the stock exchanges in DK2880 Bagsværd Copenhagen and London. Its Denmark ADSs are listed on the New York Fax (+45) 4444 2314. Stock Exchange under
Slide 38: Appendix
Appendix O novo nordisk’ 38
Slide 39: Increasing focus on Shareholder Value
Increasing focus on Shareholder Value Steady increase in payout ratio from 20% in 1997 to 30% in 2000 Annual option programme based on performance initiated 1998, covers 350 key employees, 350,000 options have been granted 2 share buy-back programmes since 1995, both of DKK 3 billion Demerger of Nov
Slide 40: Turnover by therapy first half year 2001
Turnover by therapy first half year 2001 DKK million 2001 2000 % of total % change (H1 2001) Insulin etc 7,169 6,321 63 13 NovoNorm®/Prandin® 769 513 7 50 Diabetes care, total 7,938 6,834 70 16 Coagulation disorders* 1,499 1,034 13 45 Human growth hormone 1,011 952 9 6 HRT 692 603 6 15 Other 211 246
Slide 41: Turnover by region first half year 2001
Turnover by region first half year 2001 DKK million 2001 2000 % of total % change (H1 2001) Europe 5,548 4,684 49 18 USA 2,388 1,736 21 38 Japan 1,883 1,926 17 -2 Rest of world 1,532 1,323 13 16 Total 11,351 9,669 100 17 41
Slide 42: Profit & Loss 1998-2000
Profit & Loss 1998-2000 DKK million 1998 1999 2000 Net turnover 13,647 16,423 20,811 Y/Y growth +8.4% +20.3% +26.7% Gross profit 9,896 12,196 15,767 EBIT 2,933 3,527 4,816 EBIT-margin 21.5% 21.5% 23.1% Net finance 243 -178 24 Pre-tax profit 3,176 3,349 4,840 Tax rate 36.5% 40.3% 36.2% Net profit 2,0
Slide 43: Balance Sheet 1998-2000
Balance Sheet 1998-2000 DKK million 1998 1999 2000 Fixed assets 12,534 10,576 12,065 Stocks 3,253 3,583 3,972 Debtors 4,895 5,481 4,711 Cash and current inv. 1,476 3,442 3,845 Total assets 22,158 23,082 24,593 Shareholder’s funds 15,287 15,185 15,738 Provisions 1,121 1,258 1,493 Long-term debt 997 1
Slide 44: Margin Development
Margin Development 6000 5000 Production costs Development in gross- and DKK million EBIT-margin 1997-2000 4000 3000 79% 24% 2000 77% 22% 1000 75% 20% 0 73% 18% 1997 1998 1999 2000 71% 16% 7000 Gross margin (left- R&D costs 69% hand scale) 14% 6000 S&D costs EBIT-margin (right- 67% hand scale) 12% DK
Slide 45: From diet and exercise to insulin
From diet and exercise to insulin Type 1: (4 million patients*) Type 2: (147 million patients*) Therapy: Diet/Exercise Oral products Oral/Insulin Insulin Approx 66% Approx 7% Approx 27% An estimated 25-30 million using medication * Estimated year 2000 incl. undiagnosed. 45
Slide 46: Insulin Secretion in Normal People and People with Type 2 Diabetes
Insulin Secretion in Normal People and People with Type 2 Diabetes 800 Insulin Secretion (pmol/min) 700 Normal Type 2 diabetes 600 500 400 300 200 100 0600 1000 1400 1800 2200 0200 0600 Kilde: O'MEARA et al. Am. J. Medicine, 1990; 89. 46
Slide 47: Type 2 Diabetes – the Metabolic Syndrome
Type 2 Diabetes – the Metabolic Syndrome Genetic NN622 Acquired NN4201 NN2211 Glucotoxicity Lipotoxicity NovoNormTM/Prandin® NovoRapid Insulin deficiency NN304 Impaired Hepatic Glucose-induced beta cell NN1998 glucose insulin secretion function production Post Hyperglycemia receptor Tissue response
Slide 48: Advantages of NovoSeven
Advantages of NovoSeven® FVIIa/NovoSeven® The Thekey Xkey advantages advantages II ofofNovoSeven NovoSeven are: ® ® are: TFInjury Injurysite siteselective selective activation activation ofofplatelets Xa Va Thrombin Tissue factor creates platelets highcreates local thrombin high localgeneration thro
Slide 49: Studies aimed at expanding the indication
Studies aimed at expanding the indication New clinical area targeted Expected benefits of NovoSeven® Orthotopic liver transplantions*) Reduce bleeding, leading to fewer transfusions and thereby reducing post-operative complications Liver resections*) Fast induction of haemostasis and hopefully allow
Slide 50: NovoSeven - Cost-Utility Study
NovoSeven - Cost-Utility Study Treatment Usual % Outcome care rFVIIa reduction Retreatments (N) 6 0.5 92% Bleeds (N) 28 18 35% Major bleeds (N) 15 12 19% Painful episodes (N) 12 11 12% Duration of painful episodes (h) 131 19 85% Delay from onset to treatment (h) 37 6 84% Days off school 37 25 33% Da
Slide 51: Triple Bottom Line
Triple Bottom Line Economically viable Socially Environmentally Responsible sound 51