|Novo Nordisk CEO Lars Sørensen|
Novo Nordisk ($NVO) CEO Lars Sørensen today told investors that 2014 had been a more challenging year than most, then rolled off a series of results that showed significant leaps in sales both in the U.S. and worldwide. He then waved off any worries about a price war in the U.S. being a significant issue for the world's largest maker of insulin products this year.
The company said it expects sales to go up 6% to 9% in 2015 and operating profit to grow 10%. "Where we saw significant positive movements on price, net for our business in 2014, we only see flat to slightly positive development to our pricing in the U.S. this year," Sørensen said in a conference call, Reuters reports.
That is in contrast to Sanofi ($SNY), whose long-acting Lantus is the best-selling insulin drug in the world. Last year, shortly before the Sanofi board relieved CEO Chris Viehbacher of his duties, the CEO warned that price negotiations with payers would take a bite out of earnings in 2015, a position the board reiterated after his dismissal.
That is not to say Novo will not face some challenges this year. It said that it expected its blockbuster Victoza (liraglutide), which led sales growth in 2014, to lose some market share. It currently dominates the GLP-1 category with 72% of the market share, but the FDA last year approved Eli Lilly's ($LLY) Trulicity, which is expected to come on fast. Analysts have predicted, however, that Trucility will spark growth in the category, and Sørensen and Novo are buying into that argument. Sales of Victoza were about $2 billion last year, up 15%.
"Our expectation is we are likely to see a slight decline in our market share (for Victoza) in 2015," Reuters reports Sørensen saying in the conference call. "But the total market is to expand such that we continue to see double-digit growth for Victoza in 2015."
Novo reported global sales of 88.8 billion Danish kroner ($13.5 billion) up 8% and sales in the U.S., which account for nearly half of its revenues. Its operating profit was up 13% to 34.5 billion kroner ($5.24 billion).
The drugmaker expects to see a boost this year from its new obesity treatment Saxenda, which the FDA approved in December. It is hoping to attain $1 billion in sales from the reformulated version of its blockbuster diabetes remedy Victoza, and says it will devote 500 sales reps to the effort.
Novo also said it will decide in H1 whether to resubmit its long-acting insulin Tresiba to the FDA based on interim results for an earlier consideration or wait until the full trial is complete next year. The FDA in 2013 stunned Novo by turning down the potential blockbuster based on heart risks, asking for further study. Europe and Japan have both approved the drug, and Novo said it continues to grow in those markets, but it will be in the U.S. where the real money will be made.
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