Novo Nordisk to cut 500 jobs in Denmark, 1,000 overall

The world's largest maker of diabetes treatments, Novo Nordisk, said on Thursday it was cutting 1,000 jobs worldwide to cut costs as it faces price pressure in the United States.

Novo Nordisk to cut 500 jobs in Denmark, 1,000 overall
Around half of the cuts will be in Denmark. Photo: Søren Bidstrup/Scanpix
Around 500 of the cut positions will be in Denmark, the Bagsværd-based company said. 
“This is one of several actions taken to reduce operating costs as the company faces a challenging competitive environment in 2017, especially in its large US market,” Novo Nordisk said in a statement.
Novo Nordisk's shares plunged last month when the firm, which controls nearly half of the global insulin market, announced it was facing intense pressure from firms that manage prescription drug services between health insurers and insured patients in the United States and lowered its growth forecast.
The company's shares have fallen by more than 20 percent since the start of August.
On Thursday, the firm said it was sticking to its August forecast of sales growth between five and seven percent this year in local currencies, and an increase in operating profit of between five and eight percent.
The firm said the job cuts, about 2.4 percent of its current staff of 42,300, are expected to fall in research and development and headquarter staff functions, as well as positions in the global commercial organisation. 
Chief executive Lars Rebien Sorensen expressed regret at having to take the difficult decision of letting staff go.
“However, we have concluded that it is needed in order for us to have a sustainable balance between income and costs,” he was quoted as saying in the statement.

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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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