Novo Nordisk A/S Class B · OMXCOP:NOVO_B
Novo Nordisk A/S Class B — H1 2003 Earnings Presentation
64 slides from Novo Nordisk A/S Class B's earnings presentation, August 2003
Slide 1: Novo Nordisk: A focused healthcare company
Novo Nordisk A focused healthcare company Investor presentation – August 2003 1
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. Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions. This may cause actual results to differ
Slide 3: Agenda
Agenda • Highlights • Sales update • Novo Nordisk in the US • Research and development • Financial update and outlook 2003 3
Slide 4: Highlights
Highlights • Sales: +5% as reported and +17% in local currencies • Operating profit: +3% for the first half year • Net profit: +23% for the first half year • Outlook 2003: • Net profit now expected to grow by more than 10% • Operating profit still expected to grow by a low single-digit percentage ra
Slide 5: Sales in first half year by therapy
Sales in first half year - Key observations: by therapy Growth hormone therapy HRT -17% • Growth driven by diabetes care (71% of +8% Diabetes care 5% growth) and NovoSeven® (24% of growth) +5% 9% • Continuing strong analogue penetration Haemostasis management driving diabetes care growth (NovoSeven®
Slide 6: Sales in first half year by region
Sales in first half year - by region Key observations: International • Growth driven by Europe (71% of growth) Operations Europe +1% +8% and North America (36% of growth) 16% • All regions growing in local currencies, with Japan & North America growing by 30%+ Oceania 15% 45% • Negative currency imp
Slide 7: Novo Nordisk in the US
Novo Nordisk in the US US headquarters US manufacturing 1,200 employees 340 employees • Diabetes sales • Diabetes marketing • Biopharmaceuticals Strategic • NovoSeven® production site • Norditropin® • Drug development • Regulatory Filling and packaging of human • Strategic business operations insuli
Slide 8: A focused organisation
A focused organisation Diabetes care Biopharmaceuticals •7 regions •3 districts •56 districts •26 sales reps •Approx 560 sales reps •20 specialists •Approx 50 specialists •Total: 673 field people •Total: 49 field people Cover niche therapeutic areas 8
Slide 9: Diabetes care
Diabetes care Novo Nordisk insulin sales Key observations: North America, local currencies • Change of strategy in 2000 • Establishing own sales force Q1 2000 index 100 % • Increased from 175 in Q1 R 22 2000 to approximately 675 CAG 200 today 150 • First detailing insulin 100 • Key launches • NovoLo
Slide 10: The US diabetes epidemic
The US diabetes epidemic - a growing market 1990 Insulin market growth potential • Growing number of people with diabetes • Increased diagnosis rate 1995 • Earlier switches from OAD to insulin • >2/3 of patients are not in acceptable control with current treatment Product Upgrade Potential 2001 • Vi
Slide 11: US insulin market
US insulin market Vol (MU) Volume market $Bn Value market 85,000 2 CAGR: 3% 2% CAGR: 15% :2 80,000 R % AG 75,000 GR: 4 1.5 C CA 70,000 65,000 1 60,000 55,000 0.5 50,000 45,000 0 MAT Q1/97 MAT Q1/99 MAT Q1/01 MAT Q1/03 MAT Q1/97 MAT Q1/99 MAT Q1/01 MAT Q1/03 Source: IMS/BW 11
Slide 12: Two distinct market segments
Two distinct market segments Segment Retail Non-retail* Market split Approximately 75%** Approximately 25%** Market Physician-driven, less Contract-driven, price characteristics price sensitive, higher sensitive, and large discounts profit margin, heavy competition Current product Insulin analogues
Slide 13: Retail strategy
Retail strategy Actions taken Results • Launch of new products • Retail market share • Field force expansion increased to above 15% • Increased focus on key from 13% in January opinion leaders 2001** • Contracts with • Significant increase in US based clinical trails • Rite-Aid • Innovative partners
Slide 14: Increased access to insured customers
Increased access to insured customers Novo Nordisk's access to • Managed care organisations insured customers • Preferred at Kaiser, Henry Ford, Humana 250 • Pharmacy benefit managers 200 • Advance PCS, 2001 Million people • Merck Medco, 2001 150 • Express Scripts, 2002 100 • WellPoint, 2000 • Hospi
Slide 15: Non-retail strategy
Non-retail strategy Actions taken Results • Increased contracting with new accounts • Non-retail market share • Service and renew existing increased to above 75% accounts from 68% in January 2001* • Increased accounts • Contracts with executives • Veteran’s Administration • Novation • Premier • Amer
Slide 16: Overall outcome of dual strategy so far
Overall outcome of dual strategy – so far Novo Nordisk market shares 45% 50% Human insulin Analogues Pens Vials 40% 45% 35% 40% 30% 35% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Q1 2000 Q1 2003 Q1 2000 Q1 2003 Note: US, Quarterly data, volume figures Source: IMS/BW 16
Slide 17: Only Novo Nordisk offers full range of analogues
Only Novo Nordisk offers full range of analogues Short-acting NovoLog® FlexPen® Premix NovoLog® Mix 70/30 PenFill® Long-acting Levemir™, launch 2004 Vial 17
Slide 18: NovoLog driver of market share
NovoLog® driver of market share Short-acting segment - US Key observations: Analogue conversion • Short-acting segment 28% 70% NovoLog® market share of 20% of insulin sold – 56% being total segment (right axis) 60% 18% analogues 16% 50% 14% • NovoLog® launched in 40% 12% September 2001 10% 30% • Nov
Slide 19: NovoLog Mix a future contributor
NovoLog® Mix a future contributor Premix segment - US Key observations: Analogue conversion • Premixed segment 32% of 25% NovoLog® Mix market share 10% insulin sold – 23% being of total segment (right axis) 9% analogues 20% 8% 7% • NovoLog® Mix 70/30 in 15% 6% FlexPen® launched in 5% September 2002
Slide 20: US – a huge upgrade potential
US – a huge upgrade potential US SOUTH AFRICA ITALY CANADA AUSTRALIA UNITED KINGDOM BELGIUM IRELAND NEW ZEALAND SWITZERLAND FRANCE JAPAN SPAIN NORWAY GERMANY PORTUGAL POLAND NETHERLANDS DENMARK 0% 20% 40% 60% 80% 100% Durable Disposable Vial Note: Q1, 2003, volume figures Source: IMS/BW 20
Slide 21: Novo Nordisk offers the most advanced devices
Novo Nordisk offers the most advanced devices Disposable Durable InnoLet® Innovo® InDuo® NovoPen® Junior FlexPen® 21
Slide 22: Adding value to volume
Adding value to volume – key to delivering high growth Disposables Vials (8%) (35%) Insulin analogues Durables (89%) (3%) Improved control Human insulin (65%) Improved accuracy and compliance Note: US, Q1 2003, volume figures Source: IMS/BW 22
Slide 23: Novo Nordisk's US insulin strategy
Novo Nordisk’s US insulin strategy Trends to look out for: Novo Nordisk’s strategy: • Volume growth • Volume growth • Demographics • Further increase contract and • Obesity partner developments • Intensified treatment • Facilitate education and awareness • Value growth • Value growth • Analogue conv
Slide 24: Biopharmaceuticals - focus NovoSeven
Biopharmaceuticals - focus NovoSeven® NovoSeven® sales overview Novo Nordisk sales Distribution of sales first half year 2003 North America, local currencies Q1 2000 Index 100 300 35% 250 G R 200 CA ROW 43% 150 North 100 America 57% 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 00 00 00 00 01 01 01
Slide 25: NovoSeven - US strategy
NovoSeven® - US strategy • Haemophilia market: • Low-responder patients (low inhibitor titer) Expand market • Mild and moderate bleeds within current • Treat bleeds early (early intervention) indication • Diagnosing and treating more acquired inhibitor patients • Increase NovoSeven® awareness in the
Slide 26: Poised for growth in the US
Poised for growth in the US Products: Sales organisation: • Launched NovoLog® Mix 70/30, • Sales force tripled, promotional spend NovoLog®, FlexPen® and InnoLet® in the boosted and focus on the key areas last 20 months to capture the significant insulin and NovoSeven® increased value upgrade opportu
Slide 27: US – a continued contributor to growth
US – a continued contributor to growth Sales, North America Local currencies Q1 2000 index 100 200 A G R 22% C 150 100 50 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 27
Slide 28: R&D: Protein expertise
R&D Protein ASIS balaglitazone Diabetes expertise expertise NovoSeven® insulin NN2501 expansion analogues AERx® iDMS NN414 Liraglutide hGH expansion Protein Delivery System unit (PDS) Drug delivery expertise 28
Slide 29: Diabetes care pipeline
Diabetes care pipeline Compound Type Indication Phase Levemir™ (insulin detemir) Insulin Type 1+2 diabetes Filed EU+US NovoMix® 50 and 70 Insulin Type 1+2 diabetes Phase 3 AERx® iDMS (NN1998) Insulin Type 1+2 diabetes Phase 3 Liraglutide (NN2211) GLP-1 analogue Type 2 diabetes Phase 2 Balaglitazone
Slide 30: Biopharmaceuticals - pipeline outside diabetes care
Biopharmaceuticals - pipeline outside diabetes care Compound Indication Phase Growth hormone IUGR/SGA* Approved by EU NovoSeven® Upper gastro-intestinal bleeding Phase 2 NovoSeven® Liver transplantation Phase 2 NovoSeven® Trauma Phase 2 NovoSeven® Stem cell transplantation Phase 2 NovoSeven® Intra-c
Slide 31: Financials
Financials Diabotes isa silent killer. Itsignificantly increases the risk of cardiovascular disease, stioke and serious long-term complications. The need for answersis urgent, and Novo Nordisk is determined tofind ther. NovoNordisk is committed to creating long-term value for its shareholders. Inves
Slide 32: Sales by therapy - currency impact
Sales by therapy - currency impact First half year Second quarter Diabetes care 17 11 5 0 Haemostasis management 28 24 11 8 Growth hormone therapy 19 12 8 1 Hormone replacement -14 -13 therapy -17 -16 Total 17 11 5 0 -20 -10 0 10 20 30 -20 -10 0 10 20 30 Growth in local currencies Growth in Danish k
Slide 33: Sales by region - currency impact
Sales by region - currency impact First half year Second quarter 11 7 Europe 8 4 31 22 North America 8 0 20 11 International Operations 1 -6 9 5 Japan & Oceania -3 -8 Total 17 11 5 0 -5 5 15 25 35 -10 0 10 20 30 Growth in local currencies Growth in Danish kroner 33
Slide 34: Financial results
Financial results DKK million First half year Second quarter 2003 2002 % change 2003 2002 % change Net turnover 12,630 12,034 5 6,524 6,553 0 Operating profit 2,939 2,856 3 1,619 1,606 1 Net financials 662 99 569 329 82 301 Profit before tax 3,601 2,955 22 1,948 1,688 15 Net profit 2,377 1,925 23 1,
Slide 35: Currency exposure
Currency exposure avg = 8.32 avg = 7.88 YTD 2003 Effect of 5% 8.25 avg = 6.71 depreciation on full- USD year operating profit* (DKK million) 7.25 USD -160 JPY -130 GBP -75 avg = 6.85 6.25 * currency hedging income is recorded as financial JPY avg = 6.30 income 5.25 2001 2002 YTD 2003 2003 avg = 5.65
Slide 36: Outlook for 2003
Outlook for 2003 • Operating profit still expected to grow by a low single-digit percentage rate Key currency rates DKK 2002 2003 Current • Expectations for net financial per 100 average ytd avg rate* USD 788 671 657 income increased to DKK 900 JPY 6.30 5.65 5.45 million GBP 1182 1082 1059 * As of 4
Slide 37: Investor Information
Investor Information Share information Investor Relations contacts Novo Nordisk A/S Novo Nordisk’s B shares are Investor Relations listed on the stock exchanges in Novo Allé, DK2880 Bagsværd Fax (+45) 4443 6633 Copenhagen and London. Its Peter Haahr ADRs are listed on the New York Tel (direct): (+4
Slide 38: Appendix slides
Appendix slides disk”
Slide 39: Sales by therapy - first half year 2003
Sales by therapy - first half year 2003 DKK million 2003 2002 % of total % change (2003) Insulin and delivery systems 8,203 7,611 65 8 Oral antidiabetic drugs 663 801 5 (17) Diabetes care, total 8,866 8,412 70 5 Haemostasis management 1,923 1,726 15 11 Growth hormone therapy 1,074 998 9 8 HRT 571 68
Slide 40: Sales by region - first half year 2003
Sales by region - first half year 2003 DKK million 2003 2002 % of total % change (2003) Europe 5,658 5,236 45 8 North America 3,067 2,852 24 8 Japan & Oceania 1,937 1,998 15 (3) International Operations 1,968 1,948 16 1 Total 12,630 12,034 100 5 40
Slide 41: Diabetes care sales by quarter: key observations
DKK million 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q1 2000 Q3 Q1 2001 Q3 Diabetes care Q1 Sales by quarter 2002 Q3 Q1 0% 2003 Key observations • In local currencies growth was 11% in the second quarter. All regions contributed to growth • In local currencies insulin and delivery
Slide 42: Diabetes – an unfolding epidemic
Diabetes – an unfolding epidemic 370 million people with diabetes expected by 2030 # of people with diabetes (million) 300 2000 250 2030 200 150 100 50 0 US Japan Europe Rest of World Source: WHO, January 2003 42
Slide 43: Insulin - the ultimate treatment
Insulin - the ultimate treatment Treatment of type 2 diabetes: Diet 1 OAD 2 OADs 3 OADs Insulin and alone exercise 20% 30% 20% 5% OAD and insulin 10% 15% 43
Slide 44: Insulin market overview - volume
Insulin market overview - volume Market size Growth rates Novo Nordisk Market Novo Nordisk market share USA 4.3% 28% ▲ 41% 13.6% Europe 6.3% 48% 7.0% 59% ▲ Japan 12.0% 8.4% 76% ▼ 5% 5.7% World 8.7% 47% ▲ 100% Source: IMS/BW. Volume data for USA, Europe, Japan, Canada, New Zealand, South Africa and A
Slide 45: Adding value to volume
HumanInsulin Animal insulin insulinanalogue Vials Adding value to volume Durables Disposables 45
Slide 46: Increasing the analogue market share
Increasing the analogue market share Analogue penetration Novo Nordisk’s analogue 20% market share 18% 16% 14% 12% Human insulin 10% 8% 26% 6% 4% Analogues 2% 0% Q1 2000 Q1 2003 Q1 2000 Q1 2003 Note: Quarterly data, volume figures Source: IMS/BW 46
Slide 47: European analogue conversion - NovoRapid
European analogue conversion - NovoRapid® Short-acting segment in Europe Share of short-acting segment Humalog market share 26.4% Short-acting human insulin NovoRapid® market share 15.8% 43% Short-acting insulin analogues Q1 2000 Q1 2003 Q1 2000 Q1 2003 Note: Quarterly data, volume figures Source: I
Slide 48: US analogue conversion - NovoLog
US analogue conversion - NovoLog® Short-acting segment in the US Share of short-acting segment Humalog market share 48.1% Short-acting human insulin 59% NovoLog® market Short-acting share 10.7% insulin analogues Q1 2000 Q1 2003 Q1 2000 Q1 2003 Note: Quarterly data, volume figures Source: IMS/BW 48
Slide 49: Market shares increasing - volume
Market shares increasing - volume Pen penetration Novo Nordisk market shares 80 Disposable 21% Novo Nordisk market share 75 Disposable 13% Durable Mega unit 70 28% Durable 32% 65 63% 60 Vial 55 59% 50 Q1 2000 Q1 2003 Q1 2000 Q1 2003 Note: Quarterly data, volume figures Source: IMS/BW 49
Slide 50: The insulin business case
The insulin business case • Epidemic growth in number Volume of people with diabetes drivers • One third are diagnosed • Trend towards earlier and 5% more intensive therapy • Conversion from human + insulin to insulin analogues Value drivers • Conversion from vials and syringes to devices 5% • Conve
Slide 51: NovoSeven haemostasis management: key observations
DKK million 0 100 200 300 400 500 600 700 800 900 1,000 Q1 Q3 2000 Q1 2001 Q3 Q1 Sales by quarter 2002 Q3 Q1 2003 +8% -NovoSeven® Haemostasis management Key observations • In local currencies growth was 24% in the second quarter. All regions contributed to the growth • Sales growth was driven by inc
Slide 52: NovoSeven - current business penetration
NovoSeven® - current business Spontaneous bleedings in congenital haemophilia Key observations • Penetration increases as confidence in NovoSeven® Penetration increases • Increased treatment intensity Elective surgery and earlier onset of treatment within haemophilia • Increased confidence in electi
Slide 53: HRT sales by quarter: key observations
DKK million 100 200 300 400 0 HRT Q1 2001 Q3 Q1 2002 Q3 Q1 Sales by quarter 2003 -16% Key observations • HRT sales decreased by 13% in local currencies • The decline is due to a declining market primarily impacted by the WHI study; however, the negative impact on the market is slowly abating • Novo
Slide 54: Growth hormone therapy: key observations
DKK million 100 200 300 400 500 600 0 700 Q1 2001 Q3 Q1 2002 Q3 Q1 Sales by quarter 2003 +1% Key observations • Growth in local currencies 12%. Growth hormone therapy North America and International Operations the main growth drivers • Norditropin® SimpleXx® is the primary growth driver. Continuing
Slide 55: Launch of NovoMix 30 - still in progress
Launch of NovoMix® 30 - still in progress Sales development in Share of segment in Europe (MU) Europe (volume) 1,200 18% 16% 1,000 14% 800 12% 10% 600 8% 400 6% NovoMix® 30 NovoMix® 30 NovoRapid® 4% NovoRapid® 200 2% LisproMix 25 LisproMix 25 0 0% 1 3 5 7 9 13 15 11 1 3 5 7 9 11 13 15 Quarters from
Slide 56: Insulin segmentation - Europe and the US
Insulin segmentation - Europe and the US Europe US 50 50 45 45 40 40 35 35 Volume share Volume share 30 30 25 25 20 20 Long-acting 15 15 Long-acting Premix 10 10 Premix Short-acting 5 5 Short-acting 0 0 Q1 1997 Q1 2003 Q1 1997 Q1 2003 Source: IMS/BW 56
Slide 57: Novo Nordisk market share since Lantus launch
Novo Nordisk market share since Lantus launch Total Month of insulin Lantus May 2003 Germany (MU) launch 55 50 USA 26% 32% Volume share 45 Europe 57% 58% 40 Germany 44% 45% Long-acting 35 Premix Short-acting UK 67% 66% 30 Jan 2002 May 2003 Source: IMS/BW 57
Slide 58: Novo Nordisk gaining strength in Germany
Novo Nordisk gaining strength in Germany Germany, volume Germany, value 50 45 Insulin volume share 45 Insulin value share 40 Novo Nordisk 40 Novo Nordisk Aventis Aventis 35 35 30 30 Jan 2002 May 2003 Jan 2002 May 2003 Source: IMS/BW 58
Slide 59: Lantus impact? - volume
Lantus impact? Index - Month of launch equals 100 - volume Novo Nordisk Indexed 130 market share Germany 125 Novo Nordisk Indexed market share UK 120 Novo Nordisk Indexed 115 market share US 110 105 100 95 90 1 6 11 16 21 26 31 36 Months since Lantus launch Source: IMS/BW 59
Slide 60: Lantus impact? - value
Lantus impact? - value Novo Nordisk Indexed market Index - Month of launch equals 100 130 share Germany 125 Novo Nordisk Indexed market share UK 120 Novo Nordisk Indexed market 115 share US 110 105 100 95 90 1 6 11 16 21 26 31 36 Months since Lantus launch Source: IMS/BW 60
Slide 61: Insulin secretion in normal people and 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 Source: O'MEARA et al. Am. J. Medicine, 1990; 89. 61
Slide 62: Low exposure to patent expiration
Low exposure to patent expiration Accumulated % of 2002 % of 2001 sales with patents 40 Novo Nordisk sales with 40 expiring in 2002-2006 35 patents expiring 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Novo Nordisk Novartis Bayer Takeda 2008 2009 2010 2011 2003 2004 2005 2006 2007 Aventis Pfizer Merck G
Slide 63: A strong trend within the short-acting segment
A strong trend within the short-acting segment Short-acting segment – the US Key observations: Pen penetration of segment • Pen penetration continues 16% 60% to increase Novo Nordisk pen market 14% share (right axis) 50% • Pen penetration within 12% short-acting analogues is 40% 10% 21% 8% 30% • Nov
Slide 64: Premix the most advanced segment
Premix the most advanced segment Premix segment – the US Key observations: Pen penetration of segment • Pen penetration more Novo Nordisk pen market 18% share (right axis) 60% than 15% 16% 14% 50% • Pen penetration with 12% 40% premixed analogues is 10% 43% 30% 8% 6% 20% • NovoLog® Mix in FlexPen® 4