Novo Nordisk posts 9% rise in Q4 sales, boosted by "strong" launch for Ozempic

Headline results for the fourth quarter:

Revenue

DKK 32.4 billion ($4.8 billion; forecasts of DKK 32 billion)

+9%

Profit

DKK 8.7 billion ($1.3 billion; forecasts of DKK 9.2 billion)

+3%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"We are very satisfied with the financial performance in 2019," remarked CEO Lars Fruergaard Jørgensen, noting that "the results reflect an accelerated sales growth in international operations and a strong launch of Ozempic in particular in North America operations and…Europe." The executive indicated that "the Rybelsus launch in the [US] is off to a good start," following its approval by the FDA last September.

Other results:         

  • Diabetes segment: DKK 25.8 billion ($3.8 billion), up 9%, driven by "solid" GLP-1 growth, partly offset by declining insulin sales
    • Victoza: DKK 5.4 billion ($798 million), down 19% on a constant currency basis, reflecting the negative impact from changes in the channel and payer mix in the US, as well as the growth of the once-weekly GLP-1 product class
    • Ozempic: DKK 4.4 billion ($650 million), with the product now launched in 26 countries
    • Tresiba: DKK 2.3 billion ($340 million), up 3% on a constant currency basis
    • Levemir: DKK 2.2 billion ($325 million), down 24% on a constant currency basis
  • Saxenda: DKK 1.6 billion ($236 million), up 24% on a constant currency basis, boosted by growth in international markets and North America
  • Biopharmaceuticals: DKK 5.1 billion ($753 million), up 5%, with growth across both the haemophilia and growth disorder franchises
    • NovoSeven: DKK 2 billion ($295 million), down 2% on a constant currency basis
  • Full-year revenue: DKK 122 billion ($18 billion), up 9%
  • Full-year profit: DKK 39 billion ($5.6 billion), up 1%

Looking ahead:

Novo Nordisk expects sales growth this year of between 3% and 6%, on a constant currency basis, with operating profit forecast to grow in the range of 1% to 5% on a constant currency basis, leading to a net loss of around DKK 1.5 billion ($222 million).

The company noted that the revenue guidance reflects expectations of a "robust" performance for the GLP-1-based products Ozempic, Victoza and Rybelsus, as well as the obesity therapy Saxenda. Novo Nordisk added that the forecast also assumes "intensifying competition" for its diabetes products and within the haemophilia inhibitor segment, as well as continued pricing pressure, especially in the US.

"We see a tough environment in the US insulin market going into 2020," chief financial officer Karsten Munk Knudsen said, noting that the company is in the middle of a "major transformation" of its business in the country.

What analysts said:

"Today's result is in line with expectations and neither the figures nor guidance deviate from what was expected," commented Nordnet analyst Per Hansen.

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