Novo Nordisk waffles due to US political uncertainty
- Novo Nordisk expect "modest sales growth" over the next year, predicting during a fourth quarter call that operating profit growth will be between a 2% decline and a 3% increase.
- "We just know that we are operating in a more uncertain environment and in that environment with thought it prudent to switch from a four percentage point range to a five percentage point range," said new CEO Lars Fruergaard Jorgensen.
- The company said it attributes those uncertainties to "market uncertainty and political uncertainty" in the U.S., which accounts for nearly 40% of Novo Nordisk sales.
Novo Nordisk has been the embodiment of pricing pressures in the U.S. over the last year. The company has been hit hard by payer pressures, forcing the Danish diabetes drug maker to trim guidance, cut employees and change out its CEO.
While full-year sales grew about 4% in local currencies to DKK 111,780 million ($16.25 billion), Novo Nordisk trimmed its sales forecast for 2017, widened operating profit growth and expressed concerns that insulin prices would continue to fall. Category sales for its diabetes franchise and other franchises this year were in-line with analyst estimates.
In light of the new presidential administration in the U.S. and President Donald Trump’s meeting with pharma executives earlier this week, the diabetes drugmaker’s earnings call on Feb. 2 was dominated by uncertainty.
The company expects there to be healthcare reform in the U.S., but doesn’t expect an immediate impact. Novo Nordisk said this will impact its ability to predict long-term financials, but sees no short-term consequences.
Novo is depending on its GLP-1 Victoza and its ultra long-acting insulin Tresiba (insulin degludec) to produce growth over the coming year. Victoza and next-gen insulins accounted for 81% of the company's sales.
While Victoza’s share of the U.S. GLP-1 market has declined to about 50% due to increased competition, it is still the market leader in the category. The drug brought in DKK 20 billion ($2.9 billion) in 2016, up 12%.
Sales of the next generation insulin Tresiba, which launched at the beginning of 2016, grew 221% to DKK 4.1 billion ($596 million).
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