Insulin leader Novo Nordisk profits up, but outlook down

Good news, bad news for the world's largest insulin maker ahead of its biggest ever product launch.

Insulin leader Novo Nordisk profits up, but outlook down
Scientists at Novo's Måløv location. Photo: Claus Bech/Scanpix
The world's largest insulin maker, Novo Nordisk of Denmark, on Wednesday posted Wednesday its highest ever annual profit but its stock plunged as the company slashed its long-term outlook.
Net profit for 2015 soared by 32 percent to 34.8 billion kroner (€4.67 billion, $5.0 billion).
The group said it expected its 2016 operating profit to rise by between five and nine percent, excluding currency effects and exceptional items, as it prepares to launch its ultraslow-acting insulin Tresiba in the United States in the first quarter, in what is expected to be its biggest launch to date.
But investors were disappointed by the company's long-term forecast for its operating profit, which it cut by half to 10 percent, from the 20 percent it has maintained for the past two decades.
At 10.15 GMT, the share was down by 4.77 percent, after shedding 7 percent at opening, in an overall market down by 1.36 percent. Over the past 12 months, the share had gained 29 percent as sales surged by 22 percent to 107.9 billion kroner.
Novo Nordisk posted record margins for a group its size: an operating margin of 45.8 percent, up 7.0 percentage points from a year earlier, and a net margin of 32.3 percent, up by 2.5 points.
But the group said it didn't expect to increase its operating margin, which it saw stable around 44 percent in the medium-term. Between 2011 and 2014 it remained between 33 and 39 percent.
The company, which holds 47 percent of the world insulin market, has benefitted from the steady rise of diabetes around the world. Nine percent of adults worldwide have been diagnosed with the disease that causes 1.5 million deaths per year, according to the World Health Organisation.
“We are very pleased with Novo Nordisk's performance in 2015 and the achievement of our four long-term financial targets. In 2016 we will continue to focus on the global launch of Tresiba,” chief executive Lars Rebien Sørensen — named the best CEO in the world by the Harvard Business Review in October — said in a statement.
The company proposed a 28 percent increase in the dividend paid out to shareholders.
Earnings in the fourth quarter alone were the weakest of the year, with a 26 percent rise in net profit to 8.26 billion kroner.
Novo Nordisk also develops biopharmaceuticals, for hemophilia and growth hormones, a division which saw sales rise by 19 percent.

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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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