Investor presentation First nine months of 2016 · 2020-03-17 · Slide 4 5,05 4,10 3,50 4,72 11,82...
Transcript of Investor presentation First nine months of 2016 · 2020-03-17 · Slide 4 5,05 4,10 3,50 4,72 11,82...
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Investor presentation
First nine months of 2016
Shanghai – part of Cities Changing Diabetes
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Agenda
Investor presentation First nine months of 2016
Highlights and key events
R&D update
Financials and outlook
Sales update
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Forward-looking statements
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including the company’s Annual Report 2015 and Form 20-F, which are both filed with the SEC in February 2016 in continuation of the publication of the Annual Report 2015, and presentations made, written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:
• Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
• Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
• Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and
• Statements regarding the assumptions underlying or relating to such statements.
These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this presentation, could cause actual results to differ materially from those contemplated in any forward-looking statements.
Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.
Please also refer to the overview of risk factors in ‘Managing risks’ on p 42-43 of the Annual Report 2015.
Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this presentation, whether as a result of new information, future events or otherwise.
Important drug information
• Victoza® (liraglutide 1.2 mg & 1.8 mg) is approved for the management of type 2 diabetes only
• Saxenda® (liraglutide 3 mg) is approved in the US and EU for the treatment of obesity only
Investor presentation First nine months of 2016
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Highlights – First nine months of 2016
1 Adjusted operating profit account for partial divestment of NNIT and out-licensing of assets for inflammatory disorders, both in 2015
Investor presentation First nine months of 2016
Research and Development • Semaglutide significantly reduced the risk of major cardiovascular events with 26% vs placebo in the SUSTAIN 6 trial • Updated R&D strategy including a raised innovation threshold for R&D projects specifically within diabetes
Sales development • Sales increased by 6% in local currencies and 4% in Danish kroner
• USA grew by 6% in local currencies and accounted for 44% share of growth in local currencies • International Operations and Region China grew by 13% and 11% in local currencies, respectively • Tresiba® increased by 187% in local currencies and accounted for 33% share of growth in local currencies
Financials • Adjusted1 operating profit increased by 7% in local currencies • Diluted earnings per share adjusted for the partial divestment of NNIT increased by 22% to 11.50 DKK per share • 2016 financial outlook:
• Sales growth is now expected to be 5-6% measured in local currencies (around 2% lower in reported currencies) • Adjusted1 operating profit growth is now expected to be 5-7% measured in local currencies (around 2% lower in reported
currencies) • 2017 preliminary financial outlook in local currencies:
• Sales growth is expected to be low single digit • Operating profit growth is expected to be flat to low single digit
• Updated long-term financial targets • A new target for operating profit growth has been set at 5% on average while the two other targets remain unchanged
Organisational • Lars Rebien Sørensen retires as CEO effective 1 January 2017; Lars Fruergaard Jørgensen appointed as successor • Global reduction of workforce by approximately 1,000 employees
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Growth analysis – first nine months of 2016
All regions contribute to sales growth measured in local currencies for the first nine months of 2016
Investor presentation First nine months of 2016
Sales as reported – first nine months of 2016
Sales of DKK 82,208 million (+4%)
Local currencies Growth Share of growth
USA 6% 44%
Europe 2% 6%
International Operations 13% 27%
Region China 11% 16%
Pacific 6% 7%
Total sales 6% 100%
51%
19%
12%
10%
8%
International Operations
0%
Region China +5%
Pacific +11%
USA +5%
Europe 0%
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Quarterly sales in the US Key factors impacting sales growth
Continued modest US sales growth in the third quarter of 2016
Investor presentation First nine months of 2016
Sales as reported
bDKK
Q3 2016
Q1 2014
MAT quarterly local currency growth %
Average local currency growth %
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
2
4
6
8
10
12
14
16
Th
ou
san
ds
• Sales growth primarily driven by Tresiba®, Victoza® and Saxenda®
• Declining sales of modern insulin driven by impact from: • NovoLog®/NovoLog® Mix 70/30 contract loss • Declining Levemir® sales following the launch of
Tresiba®
• Lower modern insulin prices
• Decline in NovoSeven® sales due to increasing competitive pressure
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Quarterly sales in China Key factors impacting sales growth
Sales growth rebounds in China in the first nine months of 2016
Investor presentation First nine months of 2016
Sales as reported
bDKK
Q3 2016
Q1 2014
MAT quarterly local currency growth %
Average local currency growth %
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.0
0.5
1.0
1.5
2.0
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3.5
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• Increasing modern insulin sales growth driven by: • Increased insulin market volume growth • Modern insulin volume market penetration
• The growth was partly offset by declining human insulin sales reflecting increased competitive pressure and negative price impact from provincial biddings
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Local currencies Growth Share of growth
New-generation insulin1 185% 36%
Modern insulin (1%) (7%)
Human insulin 0% 0%
Victoza® 13% 33%
Other diabetes and obesity care2 26% 18%
- Hereof Saxenda® 331% 16%
Diabetes and obesity care 6% 81%
Haemophilia3 (1%) (2%)
Norditropin® 16% 19%
Other biopharmaceuticals4 4% 2%
Biopharmaceuticals 6% 19%
Total 6% 100%
Sales growth is driven by new-generation insulin and Victoza®
Investor presentation First nine months of 2016
Sales as reported – first nine months of 2016 Growth analysis – first nine months of 2016
1 Comprises Tresiba®, Xultophy® and Ryzodeg® 2 Primarily NovoNorm®, needles and Saxenda®
3 Comprises NovoSeven®, NovoEight® and NovoThirteen®
4 Primarily Vagifem® and Activelle®
Other biopharmaceuticals +3%
7% Haemophilia (3%)
11%
Diabetes and obesity care
+4%
79%
3%
79%
9%
8% 3%
Norditropin®
+14%
Note: Norditropin® sales growth in the first nine months of 2016 is derived primarily from the USA reflecting a positive non-recurring adjustment to rebates in the Medicaid patient segment
Sales of DKK 82,208 million (+4%)
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Investor presentation First nine months of 2016
Victoza® maintains leadership in the faster growing US GLP-1 market
US GLP-1 market development
Source: IMS NPA monthly, August 2016
US GLP-1 market shares
Total TRx Growth rate
exenatide Victoza®
albiglutide dulaglutide
MAT GLP-1 TRx (million)
GLP-1 TRx market share
MAT volume growth rate
Aug 2016
Aug 2013
0%
5%
10%
15%
20%
25%
30%
35%
0
1
2
3
4
5
6
7
8
Mill
ions
51%
8%
22%
19%
0%
20%
40%
60%
80%
100%
Aug 2013
Aug 2016
US GLP-1 market TRx volume
0.00
0.10
0.20
0.30
0.40
GLP-1 TRx volume (million)
Aug 2013
Aug 2016
exenatide Victoza®
albiglutide dulaglutide
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40%
8%
13% 14% 15%
3%
17% 20%
28%
7%
0%
10%
20%
30%
40%
0 10 20 30 40
• Tresiba® launched in 47 countries with solid penetration in markets with similar reimbursement as insulin glargine
• Ryzodeg® launched in Mexico, India, Bangladesh, Japan,
Russia, Lebanon and now South Africa and Nepal
• Xultophy® launched in Switzerland, the United Kingdom, Sweden, Hungary, Greece and now Cyprus
Key launch observations Tresiba® value share of basal insulin segment
in selected countries, excluding the USA
Roll-out of new-generation insulin portfolio is progressing
Note: Limited IMS coverage in India Source: IMS Monthly value figures, August 2016
Investor presentation First nine months of 2016
Months from launch
Mexico
Switzerland Japan
Denmark
Netherlands Argentina Brazil
UK India Greece Italy
24%
28%
Spain
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Weekly US NBRx volume market shares
Steady uptake of Tresiba® in the USA
Source: IMS weekly data, 7 October 2016, excludes Medicaid
Investor presentation First nine months of 2016
Tresiba® launched in the USA
• Full commercial launch in January 2016 following specialist engagement in Q4 2015
• Tresiba® volume market share has reached 4.0%
• Tresiba® U200 accounts for nearly 80% of total Tresiba® volume
• Wide formulary access has been obtained with around 75% access for patients in commercial channels and Medicare part D combined
Levemir® NN Total Basal Tresiba®
glargine U100 glargine U300
Note: The graph does not show NPH, which accounts for the residual market share Source: IMS weekly data, 7 October 2016, excludes Medicaid NBRx: New-to-brand prescriptions; MS: Market share
Basal NBRx MS
12%
46%
19%
14%
31%
0%
10%
20%
30%
40%
50%
01-01-2016 01-05-2016 01-09-2016Jan
2016 Sep
2016
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Semaglutide demonstrated 26% reduction in composite CV outcome compared with placebo
Semaglutide significantly reduced the risk of major cardiovascular events with 26% vs placebo in SUSTAIN 6
Investor presentation First nine months of 2016
Note: p-value is two-sided, pooled data reported for both semaglutide and placebo MACE: Major adverse cardiovascular event; 3-point MACE comprises cardiovascular death, non-fatal myocardial infarction and non-fatal stroke; CI: Confidence interval * No adjustment for multiple tests
Patients with an event (%)
Weeks
Hazard ratio = 0.74 (95% CI: 0.58;0.95) Events: 108 semaglutide; 146 placebo
p<0.001 for non-inferiority p=0.02 for superiority*
semaglutide
0
5
10
15
0 8 16 24 32 40 48 56 64 72 80 88 96 104
placebo
Key results and next step
• Non-inferiority of semaglutide compared to placebo was confirmed for time to first MACE in people with type 2 diabetes
• Semaglutide reduced the risk of MACE by 26% driven by reductions of non-fatal stroke by 39%* and non-fatal MI by 26%
• Semaglutide significantly reduced the risk of nephropathy while increasing the risk of retinopathy complications
• Next step: Novo Nordisk expect to submit an NDA for semaglutide to regulatory authorities in Q4 2016
* P-value <0.001 NDA: New drug application
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Updated R&D strategy including a raised innovation threshold for R&D projects specifically within diabetes
Investor presentation First nine months of 2016
CV disease
T1D intervention
Haemophilia: Novel by-passing agents
Pre-diabetes
Core areas
Blood glucose regulation incl insulin resistance
Obesity treatment
Haemophilia: Coagulation factor therapy
Growth hormone treatment
Stem cells in T1D
NASH
Nephropathy
Utilisation of core protein capabilities to enter adjacent areas
• R&D strategy and priorities have been updated to reflect the increasingly challenging payer environment, particularly in the US market, by applying an even higher innovation threshold for starting and progressing R&D projects within diabetes
• Intensified focus on exploring current projects into adjacent disease areas of high unmet need including NASH, CVD and CKD
• Build research portfolios via strengthened activities related to in-licensing of early stage projects and enhanced external academic collaborations
• Discontinuation of oral insulin and combinations involving oral insulin, as well as a number of changes to the portfolio of early-stage projects will also be implemented, reflecting the required higher innovation threshold
Updated R&D strategy
T1D: Type 1 diabetes; NASH: Non-alcoholic steatohepatitis; CV: Cardiovascular NASH: Non-alcoholic steatohepatitis; CVD: Cardiovascular disease; CKD: Chronic kidney disease
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Key development milestones
Investor presentation First nine months of 2016
Supplemental application for the SWITCH hypoglycaemia trials submitted for Tresiba® (NN1250) in the US
FDA extended regulatory review period for IDegLira (NN9068) by three months
Complete Response Letter received in the US for faster-acting insulin aspart (NN1218)
Oral semaglutide (NN9924) phase 3a trial initiations progress as planned
Supplemental applications for the LEADER CV trial submitted for Victoza® (NN2211) in the US and EU
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R&D news flow with several regulatory decisions in the past six months
Investor presentation First nine months of 2016
Project Past 6-9 months Past 3-6 months Within 3 months In ~3-6 months
Tresiba®
Victoza®
Results available
Xultophy®
SUSTAIN 6
LEADER
FDA regulatory decision
Once-weekly semaglutide
SWITCH 1 DEVOTE
Note: Indicated timeline as of financial release of first nine months of 2016 on 28 October 2016; 1 Study conducted in adult growth hormone disorder
SUSTAIN 5
N9-GP USA submission
Diabetes Haemophilia Growth disorders
√
√
√
√
Variation application in the USA
Regulatory milestone
Variation applications in the USA and EU
Faster-acting FDA regulatory decision
FDA AdComm
USA and EU submission
√
√
EASD - Detailed results from SUSTAIN 6
CHMP opinion
EMA regulatory decision
√
√
√
√
Somapacitan Phase 3a1 √
CHMP opinion
Concizumab Phase 1 results
Variation application in EU
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DKK million 9M 2016 9M 2015 Change Sales 82,208 79,051 4% Gross profit 69,943 67,471 4% Gross margin 85.1% 85.4%
Sales and distribution costs (20,468) (20,273) 1% Percentage of sales 24.9% 25.6%
Research and development costs (10,093) (9,574) 5% Percentage of sales 12.3% 12.1%
Administration costs (2,796) (2,693) 4% Percentage of sales 3.4% 3.4%
Other operating income, net 640 3,388 N/A Non-recurring income1 - 2,825
Operating profit 37,226 38,319 (3%)
Operating profit adjusted for non-recurring income1 37,226 35,494 7%
Financial items (net) (370) (5,150) (93%)
Profit before income tax 36,856 33,169 11% Tax (7,630) (6,567) 16% Effective tax rate 20.7% 19.8%
Net profit 29,226 26,602 10% Diluted earnings per share (DKK) 11.50 10.28 12% Diluted earnings per share (DKK) adjusted for partial divestment of NNIT 11.50 9.40 22%
Financial results – first nine months of 2016
Investor presentation First nine months of 2016
1 Non-recurring income comprises the partial divestment of NNIT (DKK 2,376 million) and out-licensing of assets for inflammatory disorders (DKK 449 million), both in 2015
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40
60
80
100
120
140
Negative currency impact in 2016 driven by unfavourable development in both hedged and unhedged currencies
Investor presentation First nine months of 2016
Hedged c
urr
encie
s
Index (
1 J
an 2
015=
100)
CNY/DKK JPY/DKK USD/DKK
Non-h
edged c
urr
encie
s
Index (
1 J
an 2
015 =
100)
CAD/DKK GBP/DKK
1 DKK per 100; 2 As of 24 October 2016; 3 Operating profit in DKK million per annum; 4 Chinese Yuan traded offshore (CNH) Note: Operating profit impact of one of the non-hedged currencies appreciating 5% is in the range of DKK -15 to +30 million
Hedged Currencies
2015 average
2016 average2
Spot rate2
Impact of a 5% move3
Hedging (months)
USD1 673 668 683 2,000 12
CNY1 107.0 101.3 100.9 300 114
JPY1 5.56 6.20 6.57 190 12
GBP1 1,028 921 836 70 12
CAD1 526 506 512 75 11
Non-hedged Currencies
2015 average
2016 average2
Spot rate2
RUB1 11.06 9.89 10.97
INR1 10.49 9.95 10.22
ARS1 0.73 0.46 0.45
BRL1 205 191 217
TRY1 248 227 222
INR/DKK ARS/DKK RUB/DKK TRY/DKK BRL/DKK
3 1 2 4 1 2
2015 2016
80
90
100
110
120
130
140
3
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Financial outlook for 2016
The financial outlook is based on an assumption of a continuation of the current business environment and given the current scope of business activities and has been prepared assuming that currency exchange rates remain at the level as of 24 October 2016
Investor presentation First nine months of 2016
Sales growth - local currencies
Sales growth - reported
Operating profit growth - local currencies
Operating profit growth - reported
Financial items (net)
Effective tax rate
Capital expenditure
Free cash flow
Depreciation, amortisation and impairment losses
Expectations 28 Oct 2016
5-6%
Around 2 percentage points lower
5-7%
Loss of around DKK 600 million
20-22%
Around DKK 7.0 billion
Around DKK 3.0 billion
Around DKK 38-41 billion
Previous expectations 5 Aug 2016
5-7%
Around 2 percentage point lower
5-8%
Around 3 percentage point lower
Loss of around DKK 600 million
20-22%
Around DKK 7.0 billion
Around DKK 3.0 billion
Around DKK 38-41 billion
Around 2 percentage points lower
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Previous Target1
Updated Target
Operating profit growth 10% 5%
Operating profit after tax to net operating assets 125% 125%
Cash to earnings (three year average) 90% 90%
Updated operating profit growth target of 5% Challenging environment in the US leads to the
update of operating profit target
Note: The targets have been revised based on an assumption of a continuation of the current business environment 1 The long-term financial targets were last updated in connection with the 2015 annual results
Updated long-term financial targets
• Updated operating profit growth target of 5% on average primarily reflecting: • More challenging pricing environment in the US
especially within insulin and human growth hormone products
• Intensified competitive situation within diabetes care and haemophilia
• Targets for operating profit after tax to net operating assets
as well as cash to earnings remain unchanged
Investor presentation First nine months of 2016
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Source: IMS MAT August 2016 volume and value (DKK) figures
Solid market performance Promising pipeline
Closing remarks
Investor presentation First nine months of 2016
> > • The only company with a full portfolio of novel insulin and GLP-1 products
• Semaglutide portfolio offers expansion opportunity with both injectable and oral administration
• Xultophy® supports promising outlook for insulin and GLP-1 combination therapy
• Saxenda® and multiple early stage development projects hold potential within obesity
• Broad pipeline within haemophilia and growth hormone disorders
• 27% value market share in diabetes care and solid leadership position
• ~4% annual insulin volume growth
• 46% insulin volume market share with leadership position across all regions
• >20% annual GLP-1 volume growth
• 53% GLP-1 volume market share with strong global leadership position
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Share information Investor Relations contacts
Investor contact information
Investor presentation First nine months of 2016
Novo Nordisk’s B shares are listed on the stock exchange in Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For further company information, visit Novo Nordisk on the internet at: novonordisk.com
Peter Hugreffe Ankersen +45 3075 9085 [email protected]
Melanie Raouzeos +45 3075 3479 [email protected]
Hanna Ögren +45 3079 8519 [email protected]
Anders Mikkelsen +45 3079 4461 [email protected]
In North America:
Kasper Veje +1 609 235 8567 [email protected]
Novo Nordisk A/S Investor Relations Novo Allé, DK-2880 Bagsværd
Upcoming events
02 Feb 2017 Financial statement for 2016
23 Mar 2017 Annual General Meeting 2017
03 May 2017 Financial statement for the first three months of 2017
09 Aug 2017 Financial statement for the first half of 2017
01 Nov 2017 Financial statement for the first nine months of 2017