Struggling Novo Nordisk isn’t getting any help from the U.K.’s currency. The weakened pound is hurting the Danish drugmaker—in more ways than one.
A less valuable pound post-Brexit vote means that Novo, like other drugmakers, is netting less from its U.K. sales. But other European countries are also using those U.K. prices as reference points, making the problem more widespread.
“The lower value of the pound can have a negative impact on our pricing in other markets,” company CFO told Jesper Brandgaard said, as quoted by The Wall Street Journal.
And raising U.K. prices to offset the currency slide? Not an option for the diabetes specialist, which has already negotiated those prices with the government.
“This is a challenge that we haven’t yet found a solution for,” Brandgaard said.
Novo is already feeling the heat, according to Brandgaard, who said the declining pound would cost the company about DKK 200 million ($28.5 million). It will, however, be able to defer that impact for a year, realizing it in the summer of 2017.
Meanwhile, the U.K. struggles add to a world of trouble the company is experiencing in the U.S., which represents its biggest market. Payer pressure—in the form of formulary exclusions and mandatory discounts on Novo’s diabetes products—have stunted the company’s growth, forcing it to cut sales and earnings guidance for the year and give 1,000 workers the ax.