Drugmaker Novo Nordisk warns of U.S. legislation, cautious on 2018
COPENHAGEN (Reuters) – Drugmaker Novo Nordisk forecast only muted growth in 2018 and warned that draft legislation in some U.S. states to make pricing more transparent could impact business in its largest market.
The warning over U.S. state legislation comes after fears that President Donald Trump’s healthcare policies could hurt the industry have diminished somewhat during the year.
“Trump has repeated a number of times that he believes the industry gets away with murder, obviously we don’t agree,” said Lars Fruergaard Jorgensen, chief executive of the Danish company.
But at the state level, more and more legislation was being prepared to increase clarity around prices, he said.
“If the transparency bills lead to a disclosure level that is too excessive, it becomes difficult to do business, for instance, if we have to publicly share what is in our contracts,” Jorgensen said.
The comments came after the world’s top maker of diabetes drugs nudged up its forecasts for the full year after reporting better than expected third-quarter operating profit.
However, its shares slipped 2.9 percent by 0935 GMT on the back of more cautious than expected guidance for next year and weaker third-quarter sales, especially for its Tresiba and Levemir diabetes drugs.
Novo Nordisk said it expected only low to mid single-digit sales and operating profit growth next year.
It narrowed its 2017 sales growth forecast to 2-3 percent from 1-3 percent and lifted the range of its operating profit growth outlook to 3-6 percent from 1-5 percent, all measured in local currencies.
NEW GROWTH HOPES
With its established diabetes treatments in the firing line especially due to U.S. price pressures, Novo Nordisk is pinning hopes for growth on new obesity drugs and a once-weekly injection and tablet version of its semaglutide diabetes drug.
Novo makes most of its money from its daily Victoza drug, but its bestseller is still losing market share to rival Eli Lilly’s once-weekly Trulicity.
In the short term, Novo Nordisk hopes to reverse this trend as it has now updated Victoza’s label with the claim that the drug reduces the risk of cardiovascular events.
Such a label is a first for so-called GLP-1 drugs. These drugs are not insulins but an imitation of an intestinal hormone that stimulates the production of insulin.
In the longer term, Novo Nordisk is taking aim at Eli Lilly with its own weekly injection semaglutide, which is expected to be approved in the U.S in December with launch early next year.
“We believe we have the ammunition needed to turn this around,” Jorgensen said.
The firm posted a quarterly operating profit of 12.04 billion Danish crowns ($1.88 billion) compared with an average 11.95 billion crowns forecast in a Reuters poll of analysts.
Reporting by Stine Jacobsen; editing by Louise Heavens and Keith Weir