Investor conference call Full year 2015 - Novo Nordisk · 2016. 2. 3. · Slide 3 5,05 4,10 3,50 4,72 11,82 11,82 Investor conference call Full year 2015 Forward-looking statements

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Investor conference call

Full year 2015

Shanghai – part of Cities Changing Diabetes

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Agenda

Investor conference call Full year 2015

Highlights and key events By Lars Rebien Sørensen, president and CEO

R&D update By Mads Krogsgaard Thomsen, CSO

Financials and outlook By Jesper Brandgaard, CFO

Sales update By Lars Rebien Sørensen, president and CEO

Questions and answers session

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Forward-looking statements

Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including the company’s Annual Report 2015 and Form 20-F, which are both filed with the SEC in February 2016 in continuation of the publication of the Annual Report 2015, and presentations made, written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:

• Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto

• Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures

• Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and

• Statements regarding the assumptions underlying or relating to such statements.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this presentation, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.

Please also refer to the overview of risk factors in ‘Managing risks’ on p 42-43 of the Annual Report 2015.

Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this presentation, whether as a result of new information, future events or otherwise.

Important drug information

• Victoza® (liraglutide 1.2 mg & 1.8 mg) is approved for the management of type 2 diabetes only

• Saxenda® (liraglutide 3 mg) is approved in the US and EU for the treatment of obesity only

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Highlights – Full year 2015


Research and Development • Tresiba® shows lower rate of hypoglycaemia than insulin glargine in SWITCH 2 trial in people with type 2 diabetes • SUSTAIN 2 trial, comparing semaglutide vs sitagliptin in people with type 2 diabetes, successfully completed • SUSTAIN 4 trial, comparing semaglutide vs insulin glargine in people with type 2 diabetes, successfully completed

Sales development • Sales increased by 22% in Danish kroner and 8% in local currencies

• North America and International Operations grew by 32% and 19% in Danish kroner, respectively • Victoza® increased by 34% in Danish kroner and continues to drive the growth of the GLP-1 market • Levemir® increased by 29% in Danish kroner and gains market share in the US despite increased competition

• Tresiba® launched in the US and continues to perform well in countries with similar reimbursement as insulin glargine

Financials • Operating profit growth of 43% in Danish kroner; adjusted for partial NNIT divestment, growth was 14% in local currencies • Diluted earnings per share increased 34% to 13.52 DKK per share • 2016 financial outlook:

• Sales growth is expected to be 5-9% measured in local currencies • Operating profit growth is also expected to be 5-9% measured in local currencies, adjusted for the partial divestment

of NNIT and out-licensing income from the divestment of inflammation assets, both in 2015 • Updated long-term financial targets

• The target for operating profit growth has been set at 10% • A new operating margin target has not been established, as operating margin is expected to remain around 44% • The targets for operating profit after tax to net operating assets and cash-to-earnings ratio remain unchanged

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Growth analysis – Full year 2015

North America is the main contributor to growth

Sales as reported – Full year 2015

Local currencies Growth Share of growth

North America 11% 62%

Europe 2% 4%

International Operations 15% 26%

Region China 4% 4%

Japan & Korea 5% 4%

Total sales 8% 100%

International Operations

+19%

Region China +22%

Japan & Korea +11%

North America +32%

Europe +3%

53%

19%

14%

9%

5%

Sales of DKK 107.9 billion (+22%)


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Local currencies Growth Share of growth

New-generation insulin1 109% 10%

Modern insulin 7% 41%

Human insulin (1%) (1%)

Victoza® 18% 32%

Other diabetes and obesity care2 5% 2%

Diabetes and obesity care 9% 84%

Haemophilia3 3% 4%

Norditropin® 8% 7%

Other biopharmaceuticals4 13% 5%

Biopharmaceuticals 6% 16%

Total 8% 100%

Growth is driven by modern insulin and Victoza®

Sales as reported – Full year 2015 Growth analysis – Full year 2015

1 Comprises Tresiba®, Ryzodeg® and Xultophy®

2 Predominantly oral antidiabetic products, needles and Saxenda®

3 Comprised NovoSeven®, NovoEight® and NovoThirteen®

4 Predominantly hormone replacement therapy

Other +28%

7% Haemophilia

+14% 11%

Diabetes and obesity care

+22%

79%

3%

79%

10%

7% 4%

Norditropin®

+20%

Sales of DKK 107.9 billion (+22%)


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56%

8%

11%

24%

0%

20%

40%

60%

80%

100%

Source: IMS NPA MAT, December 2015

US GLP-1 market development

Source: IMS NPA MAT, December 2015

Total TRx Growth rate

0%

5%

10%

15%

20%

25%

30%

0

1,000

2,000

3,000

4,000

5,000

6,000

Thousands

US GLP-1 market shares

exenatide Victoza®

albiglutide dulaglutide MAT GLP-1 TRx (000)

GLP-1 TRx market share

MAT volume growth rate

Victoza® maintains leadership in the faster growing US GLP-1 market

Dec 2015

Dec 2012

Dec 2012

Dec 2015


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Levemir® has gained US market share despite introduction of glargine U300

0

2

4

6

8

10

12

14

Note: Reported sales full year 2015

Levemir® sales growth driven by strong performance in North America

North America drives strong Levemir® growth despite increased competition

68%

North America

Europe IO China Japan & Korea

DKK billion

19%

Growth in local currency

-2%

11% 5% -15%


0%

20%

40%

60%

80%

Source: IMS MAT volume figures, November 2015

glargine U100

Levemir® NPH

Nov 2012

Nov 2015

glargine U300

65%

24%

10%

1%

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Key launch observations Tresiba® value share of basal insulin segment

in selected countries

Roll-out of Tresiba® is progressing and Tresiba® is now launched in the US

Note: Limited IMS coverage in India Source: IMS Monthly value figures, November 2015

Months from launch

• Tresiba® launched in 39 countries

• Tresiba® has shown solid penetration in markets with similar reimbursement as insulin glargine

• Penetration of Tresiba® remains modest in markets with restricted market access compared to insulin glargine

• Tresiba® distribution in Germany ceased in January 2016

• Tresiba® launched in Spain in January 2016

• Tresiba® launched in the US in January 2016

• Dialogue with payers regarding formulary access is ongoing and coverage is increasing

33%

7%

12%

4% 4%

3%

12%

14% 15%

27%

0%

5%

10%

15%

20%

25%

30%

35%

0 4 8 12 16 20 24 28 32

Mexico

Switzerland Japan Sweden

Denmark

Netherlands Argentina Brazil

UK


India Greece Italy

24% 22%

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0

10

20

30

40

50

60

70

0 1 2 3 4 5 6 7 8

• Encouraging Saxenda® uptake continues in Q4 2015 despite market seasonality with lower anti-obesity prescription volumes in the second half compared to the first half of the year

• Saxenda® is now the leader in value market share1 at ~31% among branded AOM, and the only branded product significantly growing value in Q4 2015

• Saxenda® has contracted coverage with multiple large pharmacy benefit managers, and is currently growing share in each account2

• Saxenda® has been launched in the US, Canada, Denmark and Italy

Prescription volume uptake of anti-obesity medications (AOM) recently launched in the US Key observations

Steady prescription uptake for Saxenda®


TRx Volume(000) Saxenda®

Belviq®

Qsymia®

Contrave®

Months from launch

11

63

44

42

Note: IMS reporting for new launches may reflect data instability due to small volume and/or supplier reporting Source: IMS NPA TRx, weekly data, 8 January 2016

1 IMS NSP, Monthly data, November 2015 2 IMS Xponent PlanTrak

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Event rate per 100 patient years exposed in maintenance period

Tresiba® IGlar Tresiba® reduction vs IGlar

Severe or BG confirmed symptomatic hypoglycemia

186 265 30%*

Severe or BG symptomatic nocturnal confirmed hypoglycemia

55 94 42%*

Severe hypoglycaemia 5 9 46%

Severe hypoglycaemia (Full treatment period)

4 9 51%*

SWITCH 2 Trial design Headline results

Tresiba® shows lower rate of hypoglycaemia than insulin glargine in SWITCH 2 trial

1 After 20% dose reduction if coming from previous twice-daily treatment Note: Daily injections of both Tresiba® and insulin glargine evenly split between morning and evening IGlar: insulin glargine; OAD: oral anti-diabetic

* p < 0.001; BG: blood glucose; Note: The confirmatory secondary endpoint of proportions of subjects experiencing severe hypoglycaemia during the maintenance period did not reach statistical significance.


Randomised 1:1 Double-blinded

721 people with type 2 diabetes

16 week titration

16 week HbA1c stable

16 week titration1

16 week HbA1c stable

Tresiba® once daily ± OAD

IGlar once daily ± OAD

IGlar once daily ± OAD

Tresiba® once daily ± OAD

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In phase 3a trials semaglutide shows best in-class potential on HbA1c reduction across treatment cascade

Comparison of HbA1c lowering effect in SUSTAIN 1, 2, 3 and 4 trials

* p < 0.001; QD: once daily; QW: once weekly; sema: semaglutide Source: Novo Nordisk on file (NN9535-3623, NN9535-3624, NN9535-3625, NN9535-3626)

Sema 1 mg Sema 0.5 mg

-1.6 -1.6 -1.5

-1.6 -1.5

-1.3

-0.9

-1.2

-0.5

-0.8

-2.0

-1.6

-1.2

-0.8

-0.4

0.0

SUSTAIN 1 SUSTAIN 3 SUSTAIN 4 Baseline 8.1% 8.4% 8.2%

72% 74% 25% 67% 40% 73% 58%

% patients HbA1c ≤7%

38%

*

*

*

SUSTAIN 2

8.1%

* *

*

Sitagliptin 100 mg

78% 69% 36%

Ch

an

ge i

n H

bA

1c (

%)

*


Placebo Exenatide QW Insulin glargine QD

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In phase 3a trials semaglutide shows best in-class weight lowering potential across treatment cascade

Comparison of weight lowering effect in SUSTAIN 1, 2, 3 and 4 trials

* p < 0.001; QD: once daily; QW: once weekly; sema: semaglutide Source: Novo Nordisk on file (NN9535-3623, NN9535-3624, NN9535-3625, NN9535-3626)

Sema 1 mg Sema 0.5 mg Exenatide QW Insulin glargine QD Sitagliptin 100 mg

-4.5

-5.6 -5.2

-3.7

-4.3

-1.9

-3.5

-1.0

1.2

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

*

*

SUSTAIN 1 SUSTAIN 3 SUSTAIN 4 Baseline 92kg 96kg 93kg

SUSTAIN 2

89kg

Ch

an

ge i

n w

eig

ht

(kg

)

*

-6.1

-1.9

*

* *

*


Placebo

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Key development milestones


• Phase 3b trial initiated comparing Xultophy® (IDegLira) (NN9068) with insulin glargine in 104-week study

• Faster-acting insulin aspart (NN1218) filed for regulatory approval in the EU and the US for the treatment of type 1 and 2 diabetes

• Phase 1 trial initiated with a liver-preferential prandial insulin (NN1406)

• LATIN T1D (NN9211) discontinued in phase 3 development

• Phase 2 trial iniated with Anti-IL 21 and liraglutide in people with recent onset type 1 diabetes (NN9828)

• OG987GT (NN9926) and OG987SC (NN9927) discontinued in phase 1 development following the decision to enter phase 3a with oral semaglutide

Diabetes

Obesity

• Novo Nordisk plans to initiate a phase 2 clinical programme in 2H 2016 to investigate semaglutide for the treatment of non-alcoholic steatohepatitis (NASH)

Other

• Novo Nordisk files for regulatory approval of long-acting factor IX, N9-GP (NN7999) in the EU for the treatment of haemophilia B

• Novo Nordisk completes 3b extension trial mentor 2 with rFXIII, NovoThirteen®

Haemophilia

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Strong R&D newsflow expected to continue in 2016


Project Past 3 months Within 3 months Within 6 months In ~6-9 months

Tresiba®

SWITCH 2

Victoza®

Amylin analogue

Results available

In ~9-12 months

Xultophy®

SUSTAIN 6

LEADER

Phase 1

FDA regulatory decision

Phase 1

Once-weekly semaglutide

SWITCH 1

DEVOTE

√

Glucagon 530L

SUSTAIN 2 √

SUSTAIN 4 √

Note: Indicated timeline as of financial release for full year 2015 on 3 February 2016

SUSTAIN 5

OI338GT Phase 2a

N9-GP US submission

Diabetes Obesity Haemophilia

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DKK million 2015 2014 Change Sales 107,927 88,806 22% Gross profit 91,739 74,244 24% Gross margin 85.0% 83.6%

Sales and distribution costs 28,312 23,223 22% Percentage of sales 26.2% 26.2%

Research and development costs 13,608 13,762 (1%) Percentage of sales 12.6% 15.5%

Administration costs 3,857 3,537 9% Percentage of sales 3.6% 4.0%

Other operating income, net 3,482 770 N/A Non-recurring income from the IPO of NNIT 2,376 -

Operating profit 49,444 34,492 43% Net financials (5,961) (396) N/A Profit before income tax 43,483 34,096 28% Tax 8,623 7,615 13% Effective tax rate 19.8% 22.3%

Net profit 34,860 26,481 32% Diluted earnings per share (DKK) 13.52 10.07 34% Diluted earnings per share (DKK) adjusted for partial divestment of NNIT 12.58 10.07 25%

Financial results – Full year 2015


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40

60

80

100

120

140

90

95

100

105

110

115

120

125

130

135

Appreciation of key currencies against the Danish krone drive significant positive currency impact in 2015


Hedged c

urr

encie

s

Index (

1 J

an 2

014 =

100)

CNY/DKK JPY/DKK USD/DKK

Non-h

edged c

urr

encie

s

Index (

1 J

an 2

014 =

100)

3 1 2 4

2014

CAD/DKK GBP/DKK

1 DKK per 100; 2 As of 01 February 2016; 3 Operating profit in DKK million per annum; 4 USD and Chinese Yuan traded offshore (CNH) used as proxy; 5 Operating profit impact of one of the non-hedged currencies fluctuating 5% is in the range of DKK -10 to +30 million

Hedged Currencies

2014 average

2015 average2

Spot rate2

Impact of a 5% move3

Hedging (months)

USD1 562 673 686 2,000 12

CNY1 91.2 107.0 104.2 300 114

JPY1 5.32 5.56 5.65 150 12

GBP1 925 1,028 981 85 11

CAD1 509 526 489 70 11

Non-hedged Currencies

2014 average

2015 average2

Spot rate2

RUB1 14.8 11.1 9.0

INR1 9.20 10.49 10.1

ARS1 0.69 0.73 0.49

BRL1 239 205 172

TRY1 257 248 231

INR/DKK ARS/DKK RUB/DKK TRY/DKK BRL/DKK

2015

3 1 2 4

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Financial outlook for 2016

The financial outlook is based on an assumption of a continuation of the current business environment and given the current scope of business activities and has been prepared assuming that currency exchange rates remain at the level as of 01 February 2016


Expectations 3 February 2016

Sales growth - local currencies

Sales growth - reported

Operating profit growth - local currencies

Operating profit growth - reported

Net financials

Effective tax rate

Capital expenditure

Free cash flow

Depreciation, amortisation and impairment losses

5-9%

Around 1 percentage point lower

5-9%

Around 1 percentage point lower

Loss of around DKK 1.3 billion

20-22%

Around DKK 7.0 billion

Around DKK 3.0 billion

DKK 36-39 billion

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0

20

40

60

80

100

1 2 3 4 5

Reported Novo Nordisk diabetes care sales by treatment class

Expected future growth drivers for Novo Nordisk’s diabetes care franchise

Long-term financial targets are based on the pursuit of double digit growth for the diabetes care franchise

1 CAGR in local currencies for 2011-2015

Other diabetes care Insulin

2011 2012 2013 2014 2015

CAGR1 11.2%

GLP-1

Volume growth

Market share gain

Value upgrade

GLP-1 franchise

DKK billion

Continued underlying growth of the global insulin market

Market share gains driven by best in-class insulin portfolio

Continued upgrade from older generations of insulin

Continued expansion of the GLP-1 market and launch of once-weekly GLP-1


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Average 2012-20151

Result

2015

Previous Target2

Updated Target

Operating profit growth

Operating profit growth in local currencies3

23%

15%

43%

14%

15% 10%

Operating margin 40% 46% 40% N/A4

Operating profit after tax to net operating assets 111% 149% 125% 125%

Cash to earnings (three year average) 97% 97% 90% 90%

Performance against long-term financial targets

Note: The targets have been revised based on an assumption of a continuation of the current business environment 1 Simple average of reported figures 2012-2015; 2 The long-term financial targets were last updated in connection with the 2012 annual results; 3 Adjusted for the partial divestment of NNIT in 2015; 4 A new target has not been established, as operating margin is expected to remain around 44%

Updated long-term financial targets


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8 10 12 13 16

12 14

15 18

14

0

5

10

15

20

25

30

35

40

2012 2013 2014 2015 2016E

Annual cash return to shareholders Proposed dividend and

introduction of interim dividend

Organic growth enables steady cash return to shareholders via dividends and share repurchase programmes

Note: Dividends are allocated to the year of dividend pay. For 2016 expected free cash flow is DKK 36-39 billion. Share repurchase programmes run for 12 months starting February until end January of the following year

DKK billion


Share repurchase Dividend Free cash flow • Board of Directors to propose 28.0% increase in dividend to DKK 6.40 per share of DKK 0.20 at Annual General Meeting on 18 March 2016

• Proposal corresponds to a payout ratio of 46.6%

• Adjusted for the partial divestment of NNIT the payout ratio is 50.0%

• Board of Directors to propose introduction of interim biannual dividends at the Annual General Meeting on 18 March 2016

• Subject to final approval, Novo Nordisk intends to introduce the first interim dividend in August 2016

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Source: IMS MAT November 2015 volume and value (DKK) figures

Solid market performance Promising pipeline

Closing remarks

> > • The only company with a full portfolio of novel insulin products

• Semaglutide portfolio offers expansion opportunity with both injectable and oral administration

• Xultophy® supports promising outlook for insulin and GLP-1 combination therapy

• Saxenda® and multiple early stage development projects hold potential within obesity

• Broad pipeline within haemophilia and growth hormone disorders

• ≥10% annual diabetes care market growth driven by diabetes prevalence

• 28% market share in diabetes care and solid leadership position

• 47% insulin volume market share with leadership position across all regions

• 45% modern and new-generation insulin volume c market share

• 67% GLP-1 value market share with strong global leadership position


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Share information Investor Relations contacts

Investor contact information

Novo Nordisk’s B shares are listed on the stock exchange in Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For further company information, visit Novo Nordisk on the internet at: novonordisk.com

Peter Hugreffe Ankersen +45 3075 9085 [email protected]

Daniel Bohsen +45 3079 6376 [email protected]

Melanie Raouzeos +45 3075 3479 [email protected]

Kasper Veje +45 3079 8519 [email protected]

Novo Nordisk A/S Investor Relations Novo Allé, DK-2880 Bagsværd

Upcoming events


18 Mar 2016 Annual General Meeting 2016

29 Apr 2016 Financial statement for the first three months of 2016

05 Aug 2016 Financial statement for the first six months of 2016

28 Oct 2016 Financial statement for the first nine months of 2016

mailto:[email protected]




Documents

Investor conference call Full year 2015 - Novo Nordisk · 2016. 2. 3. · Slide 3 5,05 4,10 3,50 4,72 11,82 11,82 Investor conference call Full year 2015 Forward-looking statements