Novo Nordisk's Q1 Profit Up 28 Percent
Novo Nordisk announced Wednesday that first-quarter profit jumped 28 percent versus the year-ago period to 6 billion Danish kroner ($1.1 billion), boosted by higher sales of insulins and Victoza, beating analyst estimates of 5.8 billion kroner ($1 billion). Overall revenue in the three-month period increased 13 percent to just under 20 billion kroner ($3.5 billion), topping analyst predictions of 19.8 billion kroner ($3.5 billion).
CEO Lars Rebien Sørensen remarked "we are pleased with the strong sales in the first quarter...driven by our portfolio of modern insulins and Victoza." Quarterly revenue from modern insulins jumped 14 percent year-over-year to 9 billion kroner ($1.6 billion), including sales of NovoRapid, which rose 14 percent to 4 billion kroner ($707 million). Meanwhile, revenue from Levemir was up 17 percent to 2.6 billion kroner ($460 million), with sales of NovoMix rising 12 percent to 2.4 billion kroner ($425 million).
The company noted that three-monthly sales of Victoza surged 35 percent compared to the same period of last year to 2.7 billion kroner ($477 million). Novo Nordisk said that Victoza benefited from a "robust sales performance" in North America, Europe and international markets, with the product now holding a 68 percent value market share in the GLP-1 segment. For other products, the drugmaker posted human insulin sales of 2.8 billion kroner ($495 million), up 4 percent. In addition, revenue from NovoSeven grew by 6 percent to 2 billion kroner ($354 million), while those of Norditropin climbed 14 percent to 1.5 billion kroner ($265 million).
Sørensen noted that Novo Nordisk has been "encouraged by the early feedback from patients and doctors" following the recent launch of Tresiba (insulin degludec). The company indicated that the once-daily, long-acting insulin was launched in the UK and Denmark on March 4, following European approval in January, and in Japan on March 7 after clearance last year. According to the drugmaker, reimbursement of Tresiba is restricted in the UK (for related analysis, read ViewPoints: Novo Nordisk banks on higher price for Tresiba in Europe, despite FDA setback) and Denmark, while the drug is "broadly reimbursed in Japan."
In the US, the FDA issued a complete response letter to Novo Nordisk's filing for Tresiba and the combination therapy Ryzodeg (insulin degludec/insulin aspart) in February, asking the company for further cardiovascular data from a dedicated cardiovascular outcomes trial. Sørensen suggested that the drugmaker is "in a constructive dialogue with the FDA." The drugmaker indicated that it expects to start the required cardiovascular outcomes study within a year and data to support an interim analysis would be available after two to three years.
"Assuming that you will have a response from the FDA of the refiling within about half a year, then [the launch] should be more in the three, maybe five year [timeframe] in the worst case scenario," remarked chief financial officer Jesper Brandgaard. "This points to a potential approval in 2017 at the absolute earliest, with 2021 on a worst-case scenario," analysts at Jefferies said. Before the FDA's decision on Tresiba and Ryzodeg, analysts predicted that the products would generate combined annual sales of around $2.8 billion by 2017, with more than half of the forecast coming from the US.
For 2013, the company said it now expects sales growth in local currencies of between 9 percent and 11 percent, from earlier guidance of between 8 percent and 11 percent. Operating profit is still forecast to increase by around 10 percent. "Seen in the light of the strong performance in the first quarter, full-year expectations look conservative and might disappoint some investors," said Nordea analysts.