By Hester Plumridge
Novo Nordisk A/S, the world's largest maker of insulin, cut its
sales guidance for the full year because of challenges to its U.S.
business, even as it reported a greater-than-expected rise in net
profit.
The Danish drug maker cut its sales-growth guidance in local
currencies for the full year to a range of 7% to 10%, from the
8%-to-11% range it gave in January, mainly because of a difficult
rebate and contract environment in the U.S. and intensifying
competition within the diabetes-treatment field.
The company maintained expectations of operating-profit growth
of around 10% for the full year.
When asked about industry consolidation and Pfizer Inc.'s
rebuffed takeover approach for AstraZeneca PLC, Novo's rival in
diabetes treatment, Chief Financial Officer Jesper Brandgaard said
Novo Nordisk was focused on organic growth rather than mergers and
acquisitions.
"Novo Nordisk has no intentions of participating in the current
consolidation in the industry," Mr. Brandgaard said on a conference
call Thursday. "We believe that the focus that Novo Nordisk has is
a key driver behind the success of the company."
Novo's sales in the first quarter grew 2% to 20.34 billion
Danish kroner ($3.78 billion), from 19.98 billion kroner in the
same quarter of the previous year. Analysts had been expecting
sales of 20.91 billion kroner. Mr. Brandgaard said it had been a
"challenging start to the year."
Sales were dented by the strength of the Danish krone, the
impact of generic competition to Novo's diabetes drug Prandin in
the U.S. and lower U.S. prescriptions of two of its diabetes
treatments, Victoza and NovoLog, after the large pharmacy-benefit
manager Express Scripts Holding Co. excluded them from coverage in
January.
Express Scripts--which negotiates drug prices on behalf of
employers and health insurers--took the treatments off its
"preferred drug" list in January, meaning patients must pay full
retail prices for them. It now recommends rival treatments,
including Eli Lilly & Co.'s insulin Humalog and AstraZeneca's
Byetta and Bydureon.
Sales growth was driven by Novo's portfolio of modern insulins,
including 21% growth for insulin Levemir. Excluding the impact of
currency effects, sales grew 7% in local currencies, Novo said.
First-quarter net profit rose 8% to 6.46 billion kroner, above
the 6.29 billion kroner analysts were expecting, driven by
increases of Novo's drug prices in the U.S., productivity gains, a
shift toward sales of higher-margin products such as Victoza and
lower spending on drug promotion.
Novo Nordisk said the launch of its new insulin Tresiba was
going well, with sales growing to 80 million kroner from 9 million
kroner in the first quarter. Recruitment in a clinical trial to
look at cardiovascular outcomes of Tresiba is progressing ahead of
plans, the company said.
Novo Nordisk shares were down by just over 3% in morning trading
Thursday.
Write to Hester Plumridge at Hester.Plumridge@wsj.com
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