Novo Nordisk: Consolidating Its Hold
Novo Allé, 2880
Bagsværd, Denmark
Telephone: +45 4444 8888
Website: novonordisk.com
Best-Selling Products
| PRODUCT | 2013 SALES | 2012 SALES |
|---|---|---|
| NovoLog/NovoRapid | $2,999 | $2,794 |
| Victoza | $2,071 | $1,690 |
| Levemir | $2,056 | $1,742 |
| Human insulins | $1,935 | $2,012 |
| NovoLog Mix/NovoMix | $1,737 | $1,663 |
| NovoSeven | $1,648 | $1,590 |
| Norditropin | $1,088 | $1,014 |
All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2013: DKK 5.617.
Financial Performance
| 2013 | 2012 | |
|---|---|---|
| Revenue | $14,878 | $13,891 |
| Net income | $4,484 | $3,816 |
| EPS | $1.66 | $1.38 |
| R&D | $2,089 | $1,940 |
| 1H14 | 1H13 | |
|---|---|---|
| Revenue | $7,472 | $7,364 |
| Net income | $2,395 | $2,264 |
| EPS | $0.91 | $0.83 |
| R&D | $1,111 | $956 |
All sales are in millions of dollars except EPS and were translated using the Federal Reserve Board’s average rate of exchange in 2013: DKK 5.617.
Novo Nordisk continues to celebrate its 90th year in diabetes treatment in 2014, but executives say 2013 was both a good year and a tough year for the company. Although revenue, net income, and earnings per share climbed, the company began 2013 with an FDA warning letter about an insulin-filling plant in Denmark. In the spring came a scientific debate about whether the incretin class of diabetes medicines, which includes Novo Nordisk’s Victoza, caused side effects in the pancreas.
In February 2013, FDA requested additional cardiovascular safety data before it could complete its review of the new drug application for Tresiba, a new-generation basal insulin with an ultra-long duration of action.
And in October 2013, Novo Nordisk had to recall a number of batches of NovoMix insulin in some European countries because a small percentage of the products in these batches did not meet the specifications for insulin strength.
“Not the kind of events we’d hoped for in our 90th anniversary year – or in any other year for that matter,” says CEO Lars Rebien Sorensen. “For Novo Nordisk’s employees, who take immense pride in the safety and efficacy of our products, such events are downright painful.
“They are, however, also a good opportunity for learning and reflection, and we have learned from these events and are still learning.”
In light of these events, Novo Nordisk is improving measures to ensure compliance with good manufacturing practice, and the company is collecting more data to rule out that its products are associated with unacceptable risks.
“I wish I could say that events such as the ones I’ve described will never happen again, but I’m not naive,” Sorensen says. “Bad things happen, even to good companies; however, I firmly believe we’re coming out of these events wiser and stronger.”
On the positive side for Novo Nordisk in 2013, sales of the company’s insulins grew, and Tresiba was launched in Japan as the first country in February 2013. By the end of the year, the drug had claimed 8.6 percent of the segment for long-acting insulin measured in value.
And in the latter part of 2013 and thus far in 2014, news for Novo Nordisk has been much more positive.
The cardiovascular outcomes trial to provide the data FDA requested for Tresiba was initiated during October 2013. The company filed the 3mg dose of liraglutide, for weight loss, in the United States and European Union. During September 2014, FDA’s Endocrinologic and Metabolic Drugs Advisory Committee recommended approval of Saxenda, the intended brand name of this dosage. Also in September, Mexico became the first country in the world to launch Ryzodeg, a combination of insulin degludec and insulin aspart, for people with type 2 diabetes. Ryzodeg is the first combination of a basal insulin with an ultra-long duration of action and a well-established mealtime insulin in one pen.
Xultophy, a fixed combination of liraglutide and insulin degludec for the treatment of type 2 diabetes, was filed for regulatory review in the European Union. In September, Novo Nordisk announced that the European Commission granted marketing authorization for Xultophy for the treatment of type 2 diabetes mellitus in adults. The authorization covers all 27 European Union member states.
“We are satisfied with the financial results achieved in a challenging first half of 2014,” Sorensen says. “Tresiba is doing well in key markets and the DEVOTE trial continues to progress ahead of plans. This has enabled us to shorten further the timeline towards the interim analysis and a potential U.S. launch of Tresiba. Furthermore, with the positive opinion for Xultophy from the EU regulatory authorities, we have passed a key milestone in bringing the first insulin and GLP-1 combination product to the market.”
The shadow hanging over the company due to events transpiring from the February 2013 Tresiba/Ryzodec regulatory announcement was erased in September, when Novo Nordisk accepted a DKK 500,000 ($89,015) fine imposed by the Public Prosecutor in a suit filed by the Danish Financial Supervisory Authority. In December 2013, the Danish Financial Supervisory Authority reported the company to the police for violating its obligation under Section 27 (1) of the Danish Securities Trading Act to disclose inside information as soon as possible. The reporting concerned the company’s receipt of a complete response letter from FDA in the evening of Feb. 8, 2013. In the letter, the FDA stated that approvals for the insulin products Tresiba and Ryzodeg could not be granted on the basis given.
Novo Nordisk published the FDA’s decision in a company announcement on Feb. 10, 2013, following an intensive investigation and evaluation of the implications and impact of the agency’s decision. In the opinion of the Danish Financial Supervisory Authority and the Public Prosecutor, Novo Nordisk should have issued a company announcement on Feb. 8.
Though Novo Nordisk executives believed that the announcement was issued in a timely manner, for resource reasons, the company chose to accept the fine to avoid a lengthy lawsuit and settle the case.
Company executives believe with the increasing numbers of people developing diabetes all over the world, Novo Nordisk will continue to grow. “At Novo Nordisk we have a critical role to play and are committed to playing our part in the fight against diabetes,” Sorensen says. “We’ve set ourselves the target that 40 million people will be using our products by 2020.”
Financial And Product Performance
According to executives, Novo Nordisk’s established key products did well in 2013. Sales of the company’s modern insulins grew 14 percent, Victoza sales grew 27 percent, NovoSeven 8 percent, and Norditropin 16 percent, all measured in local currencies.
“I think it’s fair to say that this is a solid performance in a global pharmaceutical market characterized by all forms of cost-containment measures,” Sorensen says. “To me it shows that there’s a large and growing need for our products.”
Among the regions, North America was again the main contributor to Novo Nordisk’s growth, followed by International Operations and Region China. These are the regions executives expect to see most of the growth in the coming years.
Breaking down the numbers, sales in 2013 were DKK 83.57 billion ($14.88 billion), 7 percent more than in 2012. Net income was DKK 25.19 billion ($4.48 billion), 17.5 percent more than the previous year. Earnings per share in 2013 grew 20.3 percent to DKK 9.35 ($1.66).
In the first half of 2014, sales were DKK 41.97 billion ($7.47 billion), 1.5 percent more than in the first half of 2013. Net income was DKK 13.45 billion ($2.39 billion), 5.8 percent more than in the same period last year. Earnings per share were DKK 5.09 (91 cents), 8.5 percent more than in first-half 2013.
Novo Nordisk executives say they were pleased with the sales performance of the company’s products in 2013 and the first half of 2014.
The company’s leading product in sales was the insulin NovoLog/NovoRapid. The product generated sales of DKK 16.85 billion ($3 billion), 7.4 percent more than in 2012. In the first half of 2014, sales were DKK 8.15 billion ($1.45 billion), 2 percent less than in the same period last year.
Victozawas the second best-seller for Novo Nordisk in 2013, with sales of DKK 11.63 billion ($2.07 billion), 22.5 percent more than in 2012. During first-half 2014, sales were DKK 5.98 billion ($1.06 billion), 8 percent more than in first-half 2013.
The company’s third best-selling product in 2013 was Levemir, which generated DKK 11.55 billion ($2.06 billion), 18 percent more than in 2012. In the first half of 2014, Levemir sales were DKK 6.74 billion ($1.2 billion), 24 percent more than in the first half of 2013.
NovoLog Mix/NovoMix was the company’s fourth best selling product in 2013. Sales were DKK 9.76 billion ($1.74 billion), 4.5 percent more than the previous year. In first-half 2014, sales were DKK 4.84 billion ($862 million), 1 percent more than in the same period last year.
The fifth best-selling product was the hemophilia drug NovoSeven, with 2013 sales of DKK 9.26 billion ($1.65 billion), 3.6 percent more than in 2012. First-half 2014 sales were DKK 4.54 billion ($808 million), 1 percent more than in first-half 2013.
The sixth best-selling product in 2013 was the growth hormone Norditropin, which posted sales of DKK 6.11 billion ($1.09 billion), 7.3 percent more than in 2012. In the first half of 2014, the product had sales of DKK 3.01 billion ($536 million), about the same as in the first half of 2013.
Novo Nordisk operates in five regions: North America, comprising the United States and Canada; Europe, including the EU, EFTA, Albania, Bosnia-Hercegovina, Macedonia, Serbia, Montenegro and Kosovo; Japan & Korea, which is Japan and Korea; Region China, which includes China, Hong Kong and Taiwan; and International Operations, which is all other countries.
In the first half of 2014, North America was the main contributor with 61 percent share of growth measured in local currencies, followed by International Operations and Region China.
Exit From Inflammatory Therapies
In early September 2014, Novo Nordisk announced a decision to discontinue all its research and development activities within inflammatory disorders while increasing its efforts within diabetes prevention and treatment, obesity and diabetes complications. Executives say the decision to discontinue all R&D within inflammatory disorders follows a review of Novo Nordisk’s strategic position in the therapeutic area after the discontinuation of the company’s most advanced compound, anti-IL-20 for the treatment of rheumatoid arthritis.
“The discontinuation of anti-IL-20 delays our earliest possible entrance into the market for anti-inflammatory therapeutics to the late 2020s,” says MadsKrogsgaard Thomsen, executive VP and chief science officer of Novo Nordisk. “Significant unmet opportunities remain within diabetes, including prevention, obesity and diabetes complications. We have therefore decided to further increase our R&D efforts within diabetes which is our main business area.”
The decision will directly affect about 400 employees. Novo Nordisk estimates that it will be possible to offer other positions within the company to more than half of the affected employees. The company has initiated negotiations with the relevant local unions regarding redundancy plans.
Novo Nordisk expects that all ongoing clinical activities within inflammatory disorders will be finalized within six months from the announcement date. After closure of the clinical trials, patients will be followed in accordance with the protocol and further treatment will be the responsibility of their doctors and according to local practices.
As a consequence of the discontinuation of all R&D activities within inflammatory disorders, the company expects to incur a non-recurring cost of around DKK 700 million ($125 million) in 2014. Of this, around DKK 400 million ($71 million) relates to impairment of intangible assets, and around DKK 300 million ($53 million) relates to other exit costs such as project closures and severance payments.
Novo Nordisk earlier in the year made a deal in oncology, but is not going to conduct the research itself. In February 2014, Innate Pharma SA acquired full development and commercialization rights to the anti-NKG2A antibody, a first-in-class immune checkpoint inhibitor ready for Phase II development in oncology.
Novo Nordisk conducted a large Phase I safety trial with anti-NKG2A in patients with rheumatoid arthritis, demonstrating a good safety profile for both iv and sc routes at single and multiple administrations. Novo Nordisk has decided to advance other compounds for further development in inflammation, including anti-NKG2D, in Phase II development and generated within the collaboration between Innate Pharma and Novo Nordisk. Novo Nordisk will receive €2 million in cash and 600,000 shares for licensing anti-NKG2A to Innate and be eligible to a total of €20 million ($27 million) in potential registration milestones and single-digit tiered royalties on future sales.
“The new field of innate immunity pharmacology opened by Innate Pharma has proven highly productive, as exemplified by anti-KIR and anti-NKG2D now in Phase II clinical trials,” says Per Falk, senior VP, Biopharmaceutical Research, Novo Nordisk. “In view of recent successes with this type of drug candidate in cancer patients, we believe that anti-NKG2A has its greatest potential in oncology and that Innate Pharma is in the best position to pursue its development.”
Before the company announced that it plans to concentrate on its diabetes and biopharmaceuticals sectors, Novo Nordisk in August announced the acquisition of a manufacturing facility in West Lebanon, N.H., from Olympus Biotech. The facility was established in 1989, expanded in 2003-2006, and acquired by Olympus Biotech in 2011. It has been used primarily for mammalian cell manufacturing until production was phased out earlier this year. Novo Nordisk intends to use the facility for production of active pharmaceutical ingredients primarily for its portfolio of biopharmaceuticals.
Pipeline Development
During 2013, semaglutide, a once-weekly GLP-1 analogue, started Phase III trials. FDA approved Novo Nordisk’s insulin injection pens FlexTouch and NovoPen Echo for use with certain insulin products.
Within hemophilia, turoctocogalfa, the company’s new factor VIII product for people with hemophilia A, was approved in the United States, the European Union and Japan. Turoctocogalfa will be marketed under the brand name NovoEight in most countries.
In September 2014, Novo Nordisk released data that Ryzodeghas proved effective in providing good blood sugar control with fewer injections than a so-called basal-bolus treatment, according to new data from a late-stage study.
Ryzodeg combines Tresiba, Novo Nordisk’s great hope for future growth, with insulin aspart, a man-made form of insulin, also known as Novo-
Rapid, in a single pen injector.
The study, unveiled at a meeting of the European Association for the Study of Diabetes (EASD) in Vienna, compared Ryzodeg with basal-bolus treatment – Tresiba – and two to four injections of NovoRapid. After 26 weeks, both patient groups achieved good blood sugar control but the group taking Ryzodeg needed fewer injections and had fewer incidents of dangerously low sugar levels.
Also in September, Novo Nordisk released data about Tresiba from the BEGIN YOUNG 1 trial. The study investigates once-daily Tresiba versus insulin detemir (the active chemical in Levemir), both in combination with bolus insulin aspart, in a 52-week trial in children and adolescents with type 1 diabetes. This trial is the first to look into the long-term safety of Tresiba in children and adolescents (from age 1 to less than 18 years). The results show that Tresiba in combination with insulin aspart effectively improved long-term glycemic control.
The BEGIN YOUNG 1 trial was a randomized controlled, 26 week open-label, treat-to-target study (with a 26-week extension) investigating the efficacy and safety of Tresiba, given once daily, and insulin detemir, administered once or twice daily, both in combination with bolus insulin aspart in children and adolescents with type 1 diabetes.
In other positive September news, FDA’s Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) voted 14-1 that the overall benefit-risk assessment for Saxenda was favorable and supports approval for chronic weight management in individuals with a BMI 30 kg/m2 or greater, or 27 kg/m2 or greater in the presence of at least one weight-related comorbidity.
“We are pleased with the clear recommendation from the Advisory Committee,” Thomsen says. “We look forward to working with the FDA as they complete their review of Saxenda. Obesity is a serious public health issue in the US and we are committed to making Saxenda a new treatment option for adults with obesity.”
The recommendation was based on data from clinical trials of Saxenda, including the Phase III SCALE clinical trial program, which involved more than 5,000 people with obesity (BMI ≥30 kg/m2), or who were overweight (BMI ≥27 kg/m2) with comorbidities. The new drug application was submitted to the FDA in December 2013. The Prescription Drug User Fee Act (PDUFA) date for completion of the FDA review of the Saxenda NDA is in October 2014.
Novo Nordisk reported in September 2014 that the European Commission granted marketing authorization for Xultophy for the treatment of type 2 diabetes mellitus in adults. The authorization covers all 27 European Union member states. Xultophy is the brand name for IDegLira, the first once-daily single injection combination of insulin degludec and liraglutide. Xultophy is indicated for the treatment of adults with type 2 diabetes mellitus to improve glycemic control in combination with oral glucose-lowering medicinal products when these alone or combined with basal insulin do not provide adequate glycemic control. Xultophy was approved in Switzerland Sept. 12, 2014. Novo Nordisk expects to launch Xultophy in the first European countries in the first half of 2015.
In June 2014, Novo Nordisk announced data from a new Phase III study that demonstrated once-daily Victoza provided greater glycemic control versus placebo with no worsening of renal function in adults with type 2 diabetes and moderate renal impairment. The data were presented at the 74th Annual Scientific Sessions of the American Diabetes Association (ADA) in San Francisco. Renal impairment is one of the more challenging and common long-term complications of diabetes and limits the use of available antidiabetic treatment options.
The 26-week, double-blind, randomized, controlled study investigated the efficacy and safety of Victoza compared with placebo when added to pre-existing oral antidiabetic treatment, insulin or a combination thereof. The study showed that adults with type 2 diabetes and moderate renal impairment, defined as those with stage 3 chronic kidney disease (estimated glomerular filtration rate [eGFR] 30–59 ml/min/1.73 m2; Modification of Diet in Renal Disease [MDRD]), treated with Victoza had significantly greater improvements in mean HbA1c, were more likely to achieve the target level of HbA1c <7%, and experienced significantly greater weight loss from baseline (-2.41 kg/5.31 lbsvs -1.09 kg/2.40 lbs; ETD -1.32 kg [-2.24;-0.40] p=0.0052) versus placebo. No worsening of renal function and a lower incidence of hypoglycemia with treatment of Victoza compared with placebo were observed in the study.
“Renal impairment is very common in patients with type 2 diabetes, especially in adults over 65 years of age”, says Melanie Davies, professor of Diabetes Medicine and honorary consultant, Diabetes Research Centre, University of Leicester, UK. “Of the therapies available for type 2 diabetes, it is essential we have treatment options specifically for patients with associated renal impairment.”
Also in June, the company released new Phase IIIa findings that show IDegLira maintained its glucose-lowering effect and confirmed safety evaluations for up to one year.
The DUAL I extension trial compared the efficacy and safety of IDegLira with insulin degludec and liraglutide 1.8 mg alone in insulin-naïve adults with type 2 diabetes uncontrolled on metformin with or without pioglitazone. At 52 weeks, IDegLira demonstrated a statistically significant and sustained HbA1c (blood glucose) reduction of 1.8% from baseline versus 1.4 percent for insulin degludec and 1.2 percent for liraglutide (p<0.0001). The average HbA1c at the end of the trial was 6.4 percent for IDegLira, 6.9 percent with insulin degludec and 7.1 percent with liraglutide. Of the patients on IDegLira, 78 percent achieved an HbA1c goal of <7 percent versus 63 percent for insulin degludec and 57 percent for liraglutide. Mean fasting plasma glucose (FPG) was similar for IDegLira (103 mg/dl) and insulin degludec (108 mg/dl) and higher for liraglutide (132 mg/dl).1
“Maintaining glycemic control as diabetes progresses is an ongoing problem as patients fear initiating new therapies that may increase the risk of side effects such as weight gain and hypoglycemia,” says Professor John Buse, University of North Carolina School of Medicine, Chapel Hill, North Carolina. “All of the IDegLira data presented here at ADA indicate that this treatment can truly address these patient concerns.”
In May, Novo Nordisk announced new Phase III interim data from its guardian2 trial for its recombinant coagulation factor VIII product NovoEight, the first new rFVIII molecule in more than a decade. The data show that the drug provides long-term reduction from bleeding in people with hemophilia A when used as a preventative treatment. The results were presented at the World Federation of Hemophilia (WFH) World Congress and support findings from other studies within the guardian clinical program that found NovoEightdemonstrated good efficacy in preventing and treating bleeds without inhibitor development in previously treated patients.
Guardian2 is the extension of the pivotal guardian clinical program, one of the largest and most comprehensive pre-registration clinical trial programs in hemophilia, with more than 210 severe hemophilia A patients treated. Guardian2 is an open-label, multinational, single-arm extension trial involving 188 hemophilia A patients from 18 countries who had been previously enrolled in the guardian1 and guardian3 trials. Patients received NovoEight in a preventative regimen and to treat breakthrough bleeds. Interim results found: that the overall estimated annual bleeding rate (ABR) achieved during preventative regimen with NovoEight was 3.1 (median 1.7) bleeds/patient/year, ranging from 1.4 (children aged 0-5) to 1.9 for adults (median number of bleeds/patient/year); and a preventative regimen with NovoEight led to a decrease in ABR, followed by stabilization at a lower level over the time period assessed.
NovoEight was approved by FDA in October 2013 and by EMA in November 2013 for the treatment and prophylaxis of bleeding in patients with hemophilia A. NovoEight also was approved in Japan and Australia during January 2014 and in Switzerland during February 2014. Applications for regulatory approvals have been submitted in a range of other countries.
Tackling Diabetes, One City At A Time
In March 2014, Novo Nordisk launched “Cities Changing Diabetes,” a new partnership program to fight the urban diabetes challenge. The program was first launched in Mexico City with other cities in North America, Europe, and Asia following.
“The global diabetes epidemic is an emergency in slow motion,” Sorensen says. “While there are many factors fueling the growth trajectory of diabetes, the most striking contributor is urbanization and the growth of cities. The ‘Cities Changing Diabetes’ program is our call to arms for people around the world to work together to tackle this for the long-term.”
The aim of the program is to map the problem, share solutions and drive concrete action to fight the diabetes challenge in the big cities around the world. The program will be developed in partnership with University College London (UCL) and supported by Steno Diabetes Center, Denmark, as well as a range of local partners including healthcare professionals, city authorities, urban planners, businesses, academics and community leaders amongst others. During 2014, the partners are working together to better understand the diabetes challenge in cities and identify the actions needed to tackle it. Following the initial discovery phase, Novo Nordisk and its partners – with the help of policymakers, health authorities, the private sector and the volunteer sector – will announce action plans for each of the cities in the program.
In August, the city of Copenhagen and Novo Nordisk announced an ambitious partnership to fight the diabetes challenge in Copenhagen, as part of the global ‘Cities Changing Diabetes’ program. Copenhagen is the second city to join the program.
“The City of Copenhagen is proud to be a part of a global program that will give access to detailed knowledge about the treatment of diabetes from other participating cities around the world,” says Lord Mayor Frank Jensen. “I am convinced that ‘Cities Changing Diabetes’ will be a catalyst to learning a lot about diabetes in an urban context, while at the same time other cities will be able to learn from our experiences.”
Other partners in Denmark are the University of Copenhagen, the Danish Diabetes Association and Steno Diabetes Center.
Diabetes is the only major chronic disease that is increasing in prevalence in Copenhagen. During the period 2007–2011, the number of new cases of diabetes per 1,000 inhabitants increased from 2.9 to 3.7 per year. Around 21,000 people are living with diabetes in Copenhagen, or four out of a hundred Copenhageners.
