Novo Nordisk A/S
Q2 2018 Earnings Call Transcript

Published: 8 Aug 2018

[Richard Vosser:]

Welcome, everyone, to Novo Meet Management after the second quarter results. It's my great pleasure at JPMorgan to host Novo here at Victoria Embankment. I'm Richard Vosser, European pharma analyst and I'll just hand over, at JPMorgan, I'll just hand over to Lars who will kick off the webcast section of the Meet Management Day. Lars?

[Lars Fruergaard Jørgensen:]

Thank you. Richard, and thank you to JPMorgan for hosting us and thank you, all, for showing up. I will give a brief presentation here and set the scene for Meet the Management. And then there's an opportunity to rotate and meet all of us in three sessions. I'll start by talking through the sales performance in the first half year. It's well known to you that we grew sales by 4% in local currencies. We are pleased with that development. We saw a strong 8% growth in international operations, so outside of the U.S. that was helped a bit by the tender of NovoSeven in the first quarter. So, underlying we're seeing a growth of 7%, so this is very strong growth. And you can see from the regions that we see good contributions coming from all regions. In Japan, we are going through a price reform that impacts NovoRapid and NovoMix this year, but we are actually growing market shares in the insulin category, so I actually think we are executing quite well also in Japan, despite the fact that we are seeing a lower growth here. If you look at North America, it's flat growth in local currencies and this is a half year where we have a tough comparator in terms of some positive rebate adjustments in 2017 in second quarter, and also at year end. And then we have a negative $300 million rebate adjustment on Victoza that hits us in the second quarter of 2018, which is unfortunate because it destroys a bit the image of the performance in the U.S. because we are actually executing quite well. We are growing the Tresiba market share, so in the basal category, we have grown market share by 3% and with the launch of Ozempic and the CV label for Victoza, we're also bouncing back and now growing quite strong in the GLP-1 markets. And if you look at the launch of Ozempic, we have, during the first half, gradually built market access, so now we're at a point where we have more than 60% market access, as we exit June. And we have captured 15% of the new scripts, and I view that as very strong performance. And we are on track to deliver more than DKK 1 billion of Ozempic sales for 2018. And as we have talked about, it's really the exit, access, and performance you should judge Ozempic performance on. So we like what we see and believe we are on a very good trajectory. Looking across the therapy areas, flat insulin growth which is an underlying strong growth in international operations of 7% and a decline in the U.S. linked to the rebate adjustments we talked about and price inflation in the basal category. GLP-1 growth of 14%, 13% in IO, 15% in U.S. and again there an impact from the rebate adjustment in Q2 on Victoza. Biopharm declining by 1% because of competition to NovoSeven from Hemlibra. And then I already mentioned that we see exit benefit from the timing of the NovoSeven tender in Brazil in first quarter this year. We didn't have that first quarter in 2017 so the underlying decline is actually 5% in biopharm. But, again, we are pleased with the commercial execution we have seen in the first half gaining share on key products and off to a strong launch of Ozempic in the U.S. and also in Canada. If you look at R&D, the key focus area for us entering 2018 was to execute and get good data on all semaglutides. So if you look at how we have executed on the PIONEER trial, I believe we have done a very good job and I'm also very encouraged by the data we have seen and we believe we see the emergence of a best-in-class OAD that also specs up to what some of the GLP-1 products can do. We're still waiting for the final data throughout this year but we believe we are on a very good track here indeed. I would also highlight that we are now in full swing with the sema obesity trial, the STEP program, and we have high expectations for that also. And then sometimes we forget to talk about biopharm, but there's also a biopharm course (05