#3: Novo Nordisk
Headcount 29,423
Year Established 1989
Pharma Revenues $10,835 13%/19%*
Total Revenues $10,835 13%/19%*
Net Income $2,568 27%/34%*
R&D Budget $1,712 16%/22%*
* Converted at avg. exch. rate / based on reported currency (CHF)
Top-Selling Drugs in 2010
Drug |
Indication |
$ |
(+/- %) |
NovoRapid |
modern insulins |
$2,122 |
16% |
human insulins |
diabetes |
$2,109 |
-1% |
NovoSeven |
hemostasis mangement |
$1,432 | 8% |
NovoMix |
modern insulins |
$1,394 |
15% |
Levemir |
modern insulins |
$1,227 |
25% |
Norditropin |
HGH deficiency |
$856 |
4% |
Victoza |
diabetes |
$413 |
n/a |
Account for 88% of total biopharma sales, up from 87% in 2009.
PROFILE
Diabetes continues to pay off for Novo Nordisk. The Danish company posted 19% growth in its own currency (a weaker Kroner looks 6-7% worse in dollars), fueled by its modern insulin franchise. Human insulins revenues were flat, but a new product is more than ready to pick up the slack.
In its first full year in the U.S. market, Victoza posted sales of $413 million. The once-a-day competitor of Lilly/Amylin’s twice-a-day GLP-1 analog Byetta continued to add market share in 1Q11, posting sales of $201 million. By the end of the quarter, it had 39% of the global value market share (IMS’ terms, not mine) for GLP-1 drugs, and it’s on a pace to surpass Byetta’s revenues this year. (If you check out last year’s Novo profile, you’ll find that the company’s CFO predicted it would exceed $186 million in 2010 sales (a billion DKK); glad to see his estimates were conservative.)
Novo needs to make inroads quickly with Victoza; the company is looking over its figurative shoulder at Sanofi, which is developing an in-licensed GLP-1 analog, lixisenatide. In June 2010, the company announced plans to recommence a Phase III trial of Victoza as an obesity treatment, and the company is also continuing work on a weekly version of the drug (Who knows? It may get approved before Lilly/Amylin’s Bydureon). If the obesity indication pans out — and really, what are the chances of that, given the horrific track record of obesity treatments? — Victoza could hit peak sales of $5 billion or so.
But that’s putting the cart before the horse. For the moment, NN is projecting slower growth for 2011, due to competition, government pricing pressures in western markets, and generic exposure. In January 2011, NN lost a patent infringement suit against Caraco, which is applying to market a generic of oral diabetes treatment Prandin and its metformin combo, Prandimet. That case is in appeal and one aspect of it has a shot at a Supreme Court ruling around the time this issue goes to press. Prandin already has generic competition in Europe, pinching revenues in NN’s Oral Antidia-betic Products segment.
Good thing Novo looked east a long time ago. Novo began R&D operations in China in 1997 and, in September 2010, announced that it will double the size of its R&D center in Beijing, adding 100 employees by 2015. The expansion will be dedicated to diabetes research. NN is also working on an insulin fill/finish plant in Tianjin (as well as a prefilled device production facility back home in Denmark).
The company continues to make China a major priority and kicked off 2011 by making “Region China” its own sales region, carving it out of “International Operations.” The new region includes China, Taiwan and Hong Kong. NN reported that it has 63% of the total insulin market and 70% of the modern insulin market in China, a country that has
- 1.2 billion people
- a 10% diabetes rate (according to one study)
Which is to say, it’s a huge potential market for them. In 2010, Region China revenues rose 27% in constant currency (21% in dollars) to $804 million. The company’s revenues in China rose 34% in 1Q11 to $252 million. In March 2011, China’s SFDA approved Victoza, so I think we can expect to see that upward trend keep going for a while, even as Novo battles Sanofi’s Lantus synthetic insulin, which made the first serious dent in Novo’s China stranglehold when it entered that market in 2004.
North America remains NN’s key market. Sales in the region grew 29% in 2010, and accounted for 39% of total revenues from NN (up from 36% in 2009). Sales in the region grew 16% in 1Q11. In May 2011, the company contended that it likely won’t be able to raise prices in the U.S. at the rate it had historically, as healthcare providers push for greater rebates. According to a Bloomberg report, “the company confirmed it recently lost three insulin contracts with U.S. health providers to Eli Lilly & Co., which offered lowered prices.”
Despite that news, Novo’s overall prospects look good. After all, no other company in either of our Top Companies ranks is looking at organic growth in double-digits. If NN can get its new modern insulin analog degludec filed this year and take it head-to-head with Sanofi’s Lantus juggernaut (it showed superiority in a Novo-run trial), it’ll be sitting pretty for years to come. —GYR
OUTSOURCING NEWS
Novo Nordisk is #3 in our Top Biopharmas list, but it ranked #1 in CenterWatch’s recent Global Site Survey. In June 2011, the company received the top score for overall relationship quality, as voted on by investigative sites.
More than 1,200 clinical research sites were polled by CenterWatch about 29 individual relationship attributes. NN received the highest “excellent” score, at 61%. According to a CenterWatch statement, “The Denmark-based pharmaceutical company reached the top spot by creating partnerships with its investigative sites, improving communication with site staff and focusing on making sure everyone involved in the clinical trial process understood the importance of his or her role in drug development.”
QUEST FOR THE ORAL GRAIL
No profile of Novo Nordisk would be complete without an update on the company’s ongoing quest to develop an oral formulation of insulin. No, they haven’t made one yet, but they have signed (another) partnership to try.
In December 2010, NN and Emisphere entered a licensing and development agreement to use Emisphere’s Eligen technology to develop and commercialize an oral insulin formulation. The companies have been working together since 2008 to develop an oral GLP-1 analog (a la Victoza).
Speaking of: In May 2010, cancelled the development program of an oral GLP-1 analog that used Merrion’s Pharmaceuticals’ GIPET technology.
In its 1Q11 R&D update, the company noted that, because a Phase I study of rapid-acting oral insulin analog NN1952 was too dependent on food-intake, it would shift focus to a long-acting oral insulin instead (NN1953).
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