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Novo Nordisk announces strong Q2 results

Danish pharmaceutical company Novo Nordisk has reported a 39 per cent increase in operating profit for the first six months of 2009 to $1,529m

Danish pharmaceutical company Novo Nordisk has reported a 39 per cent increase in operating profit for the first six months of 2009 to $1,529m, compared to $1,098m during the same period last year. 

Sales increased by 17 per cent in Danish kroner and by 11 per cent in local currencies, driven primarily by modern insulins, which saw sales growth of 31 per cent. Other key products contributing to the DKK 25.5bn sales figures include NovoSeven, Norditropin and HRT, which were up by 19 per cent, 16 per cent and 9 per cent respectively. Diabetes care products reflected overall growth of 11 per cent, while biopharmaceuticals showed an increase of 10 per cent. 

In financial terms, the gross margin improved by 2.8 percentage points to 79.9 per cent, primarily reflecting continued productivity improvements and a positive currency impact of around 1.3 percentage points, while reported operating profit increased by 39 per cent to DKK7,900m. When adjusted for the impact from currencies and non-recurring costs in 2008 related to the discontinuation of all pulmonary delivery projects, underlying operating profits were shown to have increased by more than 15 per cent. Net profit increased by 22 per cent to DKK5,690m, and earnings per share (diluted) increased by 25 per cent to DKK9.32.

According to Lars Rebien Sørensen, president and CEO: "The performance in the first half of 2009 is encouraging and we raise our guidance for underlying operating profit growth. We are very pleased that Victoza is now launched in the United Kingdom, Germany and Denmark and we look forward to making Victoza available to more people with type 2 diabetes."

While North America was reported to be the largest sales region for the period, with growth of 34 per cent, the company still sees significant potential for improving market position on the US modern insulin market. 

While some analysts are disappointed that no concrete news was provided on the US approval process for the new diabetes drug, Victoza, the company did report that it was in constructive dialogue with the Food and Drug Administration (FDA) regarding Victoza and that it expected "formal feedback" from the FDA later in the quarter.

Expectations for full-year 2009 operating profit growth in local currencies have been raised to 12-14 percent from an earlier forecast of around 10 per cent.

6th August 2009

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