Gil Roth07.18.12
03 Novo Nordisk
Novo Allé
2880 Bagsværd
Denmark
Tel: (45) 4444-8888
Fax: (45) 4449-0555
www.novonordisk.com
Headcount 31,499
Year Established 1989
Bio/Pharma Revenues $12,400 14%
Total Revenues $12,400 14%
Net Income $3,195 24%
R&D Budget $1,799 5%
PROFILE
Top-Selling Drugs
Drug | Indication | $ | (+/- %) |
NovoRapid | modern insulins | $2,393 | 13% |
human insulins | diabetes | $2,016 | -4% |
NovoSeven | hemostasis mangement | $1,560 | 9% |
NovoMix | modern insulins | $1,547 | 11% |
Levemir | modern insulins | $1,436 | 17% |
Victoza | diabetes | $1,120 | 171% |
Norditropin | HGH deficiency | $943 | 10% |
Account for 89% of total biopharma sales, up from 88% in 2010
PROFILE
Novo Nordisk may have made the biggest PR gaffe of any company in our Top Pharma and Biopharma ranks*, but the company still posted impressive revenue gains in 2011. That’s what you get when you stick with diabetes in an increasingly sugar-addled world.
Novo posted 9% growth in revenues and a 19% jump in earnings in 2011 (not including a 5% bump because of appreciation of the DKK against the dollar). In 1Q12, sales jumped 13% in DKK, which began to drop against the dollar. The bulk of its growth came from the rapid uptake of Victoza, a once-daily diabetes treatment that became a blockbuster in its second year on the market (it was approved in late January 2010, so it was not quite a full year of revenues to compare 2011 to).
It’s a rare drug that posts an 81% increase in a quarter and is considered a disappointment, but that’s what Novo faced with Victoza in 1Q12. Novo contended that the “slowdown” for Victoza was a result of rebates and some seasonality.
While Victoza slugs it out with competitors in the once-daily market, Novo filed with the FDA for approval of Degludec, its ultra-long-acting basal insulin product, and DegludecPlus, a combo of that and Novolog, in October 2011. These new products promise much longer intervals between injections, which will put them squarely up against Amylin’s Bydureon, a drug that the FDA rejected twice due to safety concerns. The Degludec products are projected to post around $1.4 billion in annual revenues by 2016, according to analysts. But, with diabetes treatments under heavy scrutiny by the FDA, Novo’s NDAs for the two products received three-month extensions from the agency in June 2012, pushing their action dates to late October.
North America remains far and away NN’s biggest market, comprising 40% of total revenues. Success in the U.S. (including a 21% boost in sales in 1Q12) and prospects for more growth led NN to boost its workforce in America by 15% (around 600 people) in 2012. In addition, Novo announced plans to open a type 1 diabetes R&D center in Seattle. The facility will “pursue a translational research approach characterized by combining basic research and early proof-of-concept trials under one umbrella,” according to a Novo Nordisk statement.
The company has also been reallocating resources toward Asia. In April 2012, Novo broke ground on a $100 million formulation and fill facility in Russia that will make Penfill cartridges and pack the FlexPen prefilled device for the local market. The site is projected to meet demand for more than 200,000 patients.
Novo’s problem spot has been Europe. The continent’s fiscal turmoil, various austerity programs, healthcare reforms and the slow-motion currency collapse have led Novo to de-emphasize Europe. In 2011, the company posted double-digit growth in every region of the world, except Europe, which came in at less than 3% growth. Meanwhile, growth was 10% in China, and Victoza wasn’t a factor in the slightest. Healthcare reforms in China may stifle’s Novo’s growth there, but it holds a 60% market share in insulin volume in that market.
Novo Nordisk is primarily a diabetes-focused company, but there’s still a “biopharma” division that brings in several billion dollars annually treating hemophilia and HGH deficiency. In August 2011, the company broke ground on a $185 million bio-manufacturing facility in Kalundborg, Denmark. The new site will perform formulation, freeze-drying, filling and packaging of some of Novo’s biopharma products, including NovoSeven, Norditropin, and GlucaGen. Packaging will be online in 2013, but manufacturing isn’t expected to be operational until 2015.
Novo has a commanding position in a field that may be shaken up in the years ahead. As mentioned, healthcare reform can put a lot of price pressure on insulin and its analogues. Diabetes is clearly the lifestyle disease of the future, but governments are going to be very focused on outcomes and savings, and if they can justify sticking with traditional insulin for reimbursement, it’s going to be rough on Novo (and Sanofi and Lilly).
* About that PR gaffe: in January 2012, Novo Nordisk signed up celebrity “chef” Paula Deen as a spokesperson. Ms. Deen, who “cooks” some truly diabetes-inducing meals, came out and admitted she has type 2 diabetes, which should have come as no surprise to anyone who paid attention to her recipes, including the “Lady’s Brunch Burger,” a hamburger with bacon and a fried egg, served with a donuts as buns. Which, we admit, sounds awesome.
Oral Insulin?
They’re still trying. According to a Bloomberg article in May 2012, Novo Nordisk “will be able to tell which oral insulin candidate is ready for mid-stage clinical development by the end of next year.” The same article reported, “So far, Novo’s experimental long-acting insulin pill has been tested on rats, beagle dogs and more than 100 human volunteers. One version of the medicine, dubbed NN1953, has ‘successfully completed’ a first round of clinical tests, in which people took the tablet once.” So there’s that.
Outsourcing News
Oral Insulin?
They’re still trying. According to a Bloomberg article in May 2012, Novo Nordisk “will be able to tell which oral insulin candidate is ready for mid-stage clinical development by the end of next year.” The same article reported, “So far, Novo’s experimental long-acting insulin pill has been tested on rats, beagle dogs and more than 100 human volunteers. One version of the medicine, dubbed NN1953, has ‘successfully completed’ a first round of clinical tests, in which people took the tablet once.” So there’s that.
Outsourcing News
In August 2011, Novo Nordisk began a research program with Adimab in which Adimab will use its proprietary discovery platform to identify fully human antibodies against two targets selected by Novo Nordisk. The agreement gives Novo Nordisk the option to commercialize antibodies generated from the collaboration. Financial terms weren’t disclosed, but Adimab will receive upfront payments and preclinical milestones, as well as potential clinical development milestones and royalties on product sales.
In May 2012, NN signed a development and licensing pact with Caisson Biotech for exclusive rights to use Caisson’s proprietary heparosan-based drug delivery technology to engineer and develop compounds within certain undisclosed therapeutic areas. Caisson will receive an upfront payment and contract research and manufacturing payments, while also being eligible for milestone payments and royalties. NN didn’t break out the terms of the pact, but noted that it “represent[s] a total deal value potentially in excess of $100 million.”