Novo ups profit forecast as earnings jump

The world's largest insulin maker, Novo Nordisk, raised its annual profit guidance on Thursday after net profit jumped by 29 percent in the third quarter.

Novo ups profit forecast as earnings jump
Photo: Linda Kastrup/Scanpix
The Danish group said it expects operating profit to grow 20 percent this year rather than a previous forecast of 19 percent after net profit reached 8.38 billion kroner ($1.23 billion, 1.12 billion euros) in July through September, beating a Bloomberg analyst consensus of 8.1 billion kroner.
Revenue climbed 20 percent to 26.79 billion kroner.
In 2016, the group expects to see “mid to high single-digit growth” in sales and operating profit in local currencies after adjusting for the partial divestment of its IT services business and income from the licensing of assets for inflammatory disorders.
Sales were driven by Victoza, which controls blood sugar levels by mimicking an intestinal hormone called GLP-1.
The group said once-daily insulin Tresiba, already sold in 36 countries, would be launched in the United States early next year.
Novo Nordisk has a 47 percent market share of the global insulin market, which has grown on the rising prevalence of diabetes, which now affects nine percent of the world's population.
The sales outlook, coupled with a weak sales forecast from French rival Sanofi on Thursday, disappointed some investors, and in late afternoon trading shares in Novo Nordisk were down 5.3 percent on the Copenhagen bourse.

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Novo Nordisk sees increased profits despite pandemic

Denmark's Novo Nordisk, the world's number one producer of insulin, on Wednesday reported an eight percent bump to net profits in 2020 despite the pandemic leading to a drop in new patients.

Novo Nordisk sees increased profits despite pandemic
Photo: Mads Claus Rasmussen/Ritzau Scanpix

In line with analysts' expectations, the company recorded an annual net profit of 42.1 billion Danish kroner (5.6 billion euros).

Revenue came in at 126.9 billion kroner, up four percent compared to a year earlier, not counting currency effects, driven by sales of GLP-1 products for treating diabetes.

According to Novo Nordisk, the company claimed 47.2 percent of the global market for insulin in November 2020, and 39.4 percent of the US market, which is the drugmaker's single largest market.

The International Diabetes Federation (IDF) estimates that there are over 425 million diabetics in the world, a number expected to top 629 million by 2045 as changing diets and lifestyles provoke the condition whereby the effectiveness of naturally produced insulin is reduced and people cannot convert sugar in their bloodstream for use as energy, causing health problems such as heart disease, vision loss and kidney disease.

However, only half of people with diabetes are currently diagnosed and of those only half are receiving treatment, according to the IDF, which says an estimated four million people die from the disease and the health complications it causes every year.

The Covid-19 pandemic cut into the number of people receiving help, according to Novo Nordisk.

“During the period of social distancing implemented in many markets, fewer new patients are initiating treatment,” said the company.

Novo Nordisk also develops and markets treatments for haemophilia and growth disorders, where sales fell by four percent and increased by six percent respectively, not counting currency effects.

Sales of its anti-obesity medicines, mainly Saxenda, increased by three percent.

In 2021, Novo Nordisk expects sales to grow by five to nine percent and operating profit to increase by four to eight percent.

In the early hours of trading on the Copenhagen stock exchange, shares in Novo Nordisk were up 4.6 percent.

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