Novo Nordisk's second-quarter profit flat; lifts annual guidance

Novo Nordisk announced Wednesday that second-quarter profit was flat at just under 10 billion Danish kroner ($1.6 billion), as sales rose 4 percent year-over-year to 28.6 billion kroner ($4.5 billion). The company reported that revenue from modern insulins declined 4 percent in the three-month period to 11.3 billion kroner ($1.8 billion) compared to the year-ago period, as sales of Victoza jumped 17 percent to 5.8 billion kroner ($913 million).

Quarterly sales were boosted by the performance of Saxenda, with revenue from the obesity drug surging 82 percent to 686 million kroner ($108.1 million). However, 4-percent growth in North America to 15.1 billion kroner ($2.4 billion) was held back by adjustments to rebates and competition from generic drugs. 

CEO Lars Fruergaard Jørgensen said "we are well on track to deliver on our targets for 2017 based on sales growth driven by our new, innovative products within diabetes and obesity care and a continued focus on cost control." For the current year, Novo Nordisk indicated that it now expects sales growth measured in local currencies to be in the range of 1 percent to 3 percent compared with a previous forecast of flat to growing 3 percent. Meanwhile, operating profit growth as measured in local currencies is now expected to be between 1 percent and 5 percent, up from a prior range of declining by 1 percent to growing by 3 percent.

Novo Nordisk noted that the raised guidance "reflects expectations for continued robust performance for Victoza and Tresiba as well as a contribution from Saxenda and Xultophy." The drugmaker said this will "be partly countered by an impact from lower realised prices" in the US, especially in the basal insulin and growth hormone segments. "Although the formulary negotiations in the [US] reflect the tough competitive environment, we remain confident that our long-term financial growth targets are achievable," commented Jørgensen.

FirstWord Reports: Providing insight, analysis and expert opinion on important Pharma trends and challenging issues <Click here>

Looking towards next year, Novo Nordisk indicated that formulary negotiations with pharmacy benefit managers and managed care organisations in the US are progressing, although the company warned that "average prices after rebates are expected to be lower compared with the levels in 2017, predominantly driven by the basal insulin segment." The drugmaker added that "the market access for [its] key products is, however, expected to remain broadly unchanged compared to 2017."

For related analysis, see ViewPoints: Express Scripts' light touch on 2018 exclusions suggests the strategy is working.

To read more Top Story articles, click here.