Novo Nordisk CEO Discusses Q3 2010 Results – Earnings Call Transcript
Novo Nordisk A/S (
)
Q3 2010 Conference Call
October 27, 2010 7:00 AM ET
Executives
Lars Rebein Sorenson – President and CEO
Mads Krogsgaard Thomsen – EVP and Chief Science Officer
Jasper Brandgaard – EVP and CFO
Analysts
Peter Hugreffe – ABG
Henrik Simonsen – SEB Enskilda
Keyur Parekh – Goldman Sachs
Richard Vosser – JPMorgan
Eric Le Berrigaud – Raymond James
Martin Parkhoi – Danske Bank
Carsten Madsen – Carnegie Bank
Mark Dainty – Citi
Jacob Thrane – Standard and Poor’s
Presentation
Operator
Compare to:
Previous Statements by NVO
»
Novo Nordisk A/S Q2 2010 Earnings Call Transcript
»
Novo Nordisk A/S Q1 2010 Earnings Conference Call
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Novo Nordisk A/S Investor presentation on Victoza® launch and International Operation Transcript
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Novo Nordisk A/S Q4 2009 Earnings Call Transcript
Good day ladies and gentlemen and welcome to the Novo Nordisk investor earnings conference call for the first nine months of 2010. For your information, this conference is being recorded. At this time I’d like to turn the conference over to your host today, Mr. Lars Rebein Sorenson. Please go ahead.
Lars Rebein Sorenson
Thank you very much and welcome ladies and gentlemen to today’s Novo conference call regarding our performance for the first nine months of 2010, the outlook for the year and a preliminary outlook for 2011.
I’m Lars Rebein Sorenson, the CEO of Novo Nordisk and as usual, with me I have our Chief Financial Officer Mr. Brandgaard, Mr. Krogsgaard, our Chief Science Officer and present also are our investor relations officers.
Today’s earnings release is available on our homepage novonordisk.com along with the slides that we’re using for the conference call. The conference is scheduled to last approximately one hour. As usual, we’ll start with the presentation as outlined on slide number two. The Q&A will begin in about 25 minutes. Please turn to slide number three.
As always, I need to advise you that this call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause the actual results to differ materially from expectations. For further information on the risk factors, please see the earnings release and the slides prepared for this presentation.
Also note that mentioned, this conference call is being broadcast live and a reply will be made available on Novo Nordisk’s website after the call.
Please turn to slide number four. We’re very satisfied with the performance in the first nine months of this year. Sales growth in the first nine months was 17 percent reported and 12 percent in local currencies.
The global sales growth is driven by the continued penetration of our modern insulin’s NovoRapid, Levemir and Victoza and a solid Victoza launch performance. From a regional perspective, the key grown drivers have been North American and international operations. With Victoza launch in Europe, North American and Japan, we are encouraged by the ongoing expansion of the GLO-1 product.
Within R&D, we are happy to announce the results for trials for Degludec and DegludecPlus. The second if five 3a trials with DegludecPlus and new ultra long basal insulin with bonus component has now been completed. This trial confirms that DegludecPlus improves long term glycemic control and reduces hypoglycemic in people with Type II Diabetes with compared to NovoMix 30.
The first of 12 phase three trials with Degludec ultra long acting basal insulin has also been completed. The trial results shows that Degludec has the potential to offer dosing flexibility without compromising its glycemic control or safety profile.
For liraglutide markets under the brand name Victoza we have two diabetes in early phase three of weight maintenance studies showed that people treated with liraglutide following an initial run in period of four to 12 months each, actually lost an additional six kilos compared to the placebo group.
In hemophilia, we have completed a phase one study with an ultra-long acting recombinant set of non-derivative that potentially allows once weekly or less frequent dosing. In addition, we have initiated a phase one study with a long acting recombinant set of eight derivatives.
Turning to financials, our gross margin improved 130 basis points to 80.8% during the first nine months of 2010. Operating profit grew 24% reported and around 15% local currencies.
We now expect sales growth in the range of 11% to 12% in local currencies compared to previously 9% to 10% and operating profit growth in local currency is not expected to be more than 15% compared to previous guidance of 12% to 15%.
And our preliminary plans for 2011 indicated close to 10% sales growth and a 10% to 15% operating profit growth, both in local currencies.
Turn to slide number five. Our portfolio of modern insulin’s continue to show strong performance overall. In the first nine months the portfolio of modern insulin were the main growth driver accounting for more than 60% of total sales growth in local currencies. Sales performance reflects the steady and durable penetration of our modern insulin in an expanding market.
Victoza sales reached $1.366 million Danish Kroner in the first nine months, representing 27% of the sales growth this year local currencies. Victoza sales grew 13% recorded and 9% in local currencies. Sales of our growth hormone therapy product, Norditropin, increased 6% local currencies, with all regions contributing to growth.
Novo Nordisk is the second largest company in the global growth hormone market with a 25% margin measured by volume.
Please turn to the next slide for an update on the regional spread. In the first nine months all regions contributed to growth measured in local currencies. North American contributed 60% share of growth measured in local currencies followed by international operations and Europe, and local currencies sales in North America increased 21%. Sales growth was driven by strong performance of the modern insulin’s and Victoza.
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