- Novo Nordisk shares opened about 2.5% lower on Friday following a report that the company is ironing out plans to cut thousands of jobs.
- Børsen, a Danish financial newspaper that also publishes on a paywalled website, ran a story Thursday that said Novo management is mulling up to 3,000 layoffs, citing unnamed sources, according to Reuters. The pharma may chop long-term financial guidance as well, according to Reuters via Børsen.
- "We will not comment on speculations raised in an anonymous mail. Lars Fruergaard has previously stated in the media ... that we as part of our plans for 2019 will determine how to make up for the effect of the increased Part D rebates through, for example, increased sales and cost savings," a Novo spokesperson wrote in an email to BioPharma Dive.
Novo has traditionally relied on its diabetes portfolio to drive revenue, but that's not so easy anymore. In 2017, the Danish drugmaker saw net sales dip for the first time in at least 15 years, driven in no small part by pricing pressures from increased competition in the diabetes market.
Hemophilia, another profitable therapeutic area for Novo, is also becoming less reliable as longer-acting treatments threaten to snag sales from the company's key brands like NovoSeven (coagulation factor VIIa [recombinant]).
Novo's carved out a couple strategies to handle the headwinds.
Pipeline revitalization is one. The company put up $400 million to license an investigational blood disorder drug from EpiDestiny — a deal that followed a failed acquisition attempt for Ablynx and its suite of clinical hematology assets.
Those cuts came about a year after the drugmaker announced plans to lay off 1,000 staff due to a "challenging competitive market" brought about, in part, by pricing pressures in diabetes.
Hanging over each of these decisions, though, is a shifting healthcare landscape. During its most recent quarterly earnings presentation, Novo highlighted that new legislation in the U.S. requires pharmaceutical companies to cover a greater portion — 70% versus the previous 50% — of certain annual prescription drug costs for patients in the coverage gap commonly referred to as the donut hole.
The change is likely to push down group sales 1-2%, according to the company.
"It’s premature to discuss what these plans may look like, because the Part D rebate is only one of many factors that we need to take into account when planning for the future," the Novo spokesperson wrote in the email to BioPharma Dive. "We are operating in a dynamic environment that brings new challenges and opportunities every day, which means we continually assess and adjust plans as needed. And whenever we make important decisions, we will communicate them at the appropriate time."
While investors may not be sold on Novo's recent trajectory (company shares were down 16% year to date by June 8), the company's actions indicate it sees untapped value. Novo is in the midst of a share buyback spree that began in February and is expected to total DKK 14 billion ($2.21 billion). By June 1, it had repurchased around 17.2 million B shares for DKK 5.23 billion ($830 million).