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0 Novo Nordisk A focused healthcare company CIBC World Markets Frontenac Institutional Investor Conference September 2002 Director of Investor Relations.

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Presentation on theme: "0 Novo Nordisk A focused healthcare company CIBC World Markets Frontenac Institutional Investor Conference September 2002 Director of Investor Relations."— Presentation transcript:

1 0 Novo Nordisk A focused healthcare company CIBC World Markets Frontenac Institutional Investor Conference September 2002 Director of Investor Relations Rasmus Jorgensen

2 1 Forward-looking statements Forward-looking statements This presentation contains forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions. This may cause actual results to differ materially from expectations. Factors that may affect future results include interest rate and currency exchange rate fluctuations, delay or failure of development projects, production problems, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk's products, introduction of competing products, Novo Nordisk's ability to successfully market both new and existing products, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws and related interpretation thereof, unexpected growth in costs and expenses. Risks and uncertainties are further described in reports filed by Novo Nordisk with the US Securities and Exchange Commission (SEC) including the company's Form 20-F, which was filed on 26 April Novo Nordisk is under no duty to update any of the forward-looking statements after the date of this report or to conform such statements to actual results, unless required by law. Novo Nordisk has the copyright to the information contained in this presentation. © 2002 Novo Nordisk A/S.

3 2 Core competencies of Novo Nordisk Diabetes Proteins Drug delivery Insulin

4 3 Novo Nordisk sales Diabetes care 70% Haemostasis management 14% 8% hGH HRT 6% Note: No significant patent expirations on this side of 2010.

5 4 HRT HRT Growth hormone therapy Intellectual property Diabetes care Haemostasis management Primary growth drivers Novo Nordisk – future key drivers Diabetes care Secondary value drivers

6 5 Diabetes is a growth market Number of diabetics estimated to grow 4% p.a. Diagnosis rate will increase Some 75 million people today have diabetes without knowing it Medicine use per diagnosed patient will increase Treating more assertively reduces burden of late stage complications Volume growth of at least 5% p.a. sustainable Current insulin market volume growth is 6-7%

7 6 Insulin – the ultimate diabetes therapy  -Cell function Diet and exercise alone Oral therapy (66%) Insulin therapy (27%) Oral/insulin (approx 7%) Time from diagnosis Type 2 - slope Type 1 - Immediate need for Insulin

8 7 Insulin market overview (MATQ Volumes) Notes: Industrialised world only. Based on IMS data. Monthly data used for Canada. Wal*Mart figures not included. Growth in Europe effected by conversion of formulation. Novo Nordisk market share 26%26%26%26% 58%58%58%58% 78% 60% 46%46%46%46% World Rest of IMS world Japan Europe USA Market growth 43% 48% 4% 4% 6%6%6%6% % market size 100% 3.6% 7.9% 7.0% 7.8% 6.1%

9 8 Novo Nordisk leadership in insulin therapy Innovation within insulin therapy will continue to drive the insulin market by providing more efficacious, reproducible and convenient treatment modalities Novo Nordisk will expand its leadership by maintaining the world’s richest insulin portfolio including new insulin analogues, new insulin formulations and new insulin delivery systems

10 9 The insulin business case Volume Number of people with diabetes expected to double by 2025 Less than half of those affected are diagnosed Ageing population and a move towards affluent lifestyle leading to increased prevalence A drive towards intensified therapy and earlier diagnosis 5% annual growth + Product upgrades Conversion from human insulin to insulin analogues Conversion from vials and syringes to delivery systems

11 10 Strong portfolio of new injection devices New

12 11 Analogues is replacing human insulin Strong insulin analogue penetration continues NovoRapid ® /NovoLog ® continues to increase share in the short-acting segment NovoMix ® 30 is being rolled out in Europe and will soon be launched in the US Insulin analogues’ share of insulin market worldwide Notes:Volumes in industrialised world IMS %

13 12 US analogue conversion - NovoLog ® Key observations: Market share increase backed by continued penetration of NovoLog ® NovoLog ® launched September pump indication added in December 2001 Launch of NovoLog ® Mix 70/30 to follow this year Novo Nordisk total market share (vol) in the US NovoLog® share 0% 5% 10% 15% 20% 25% 30% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Novo Nordisk share of the US short-acting market

14 13 OAD NPH 1-2x ® NovoLog ® Mix 70/30 Human Premix ® NovoLog ® Mix 50/50 Basal- Bolus Pumps NovoLog ® Mix 70/30 – simple control Blood glucose control Convenience of therapy

15 14 Diabetes pipeline NN2211 (GLP-1 analogue) NN344 (Basal analogue) NN344 (Basal analogue) NN1998 (AERx®iDMS) NN304 (Insulin detemir) NN414 (Beta cell rest) Phase 1 Phase 2 Phase 3 NN2344 (Insulin sensitiser) NovoMix ® 50 (Premixed analogue)

16 15 Novo Nordisk – future key drivers Diabetes care Haemostasis management Primary growth drivers HRT HRT Growth hormone therapy Intellectual property Secondary value drivers

17 16 Advantages of NovoSeven ® A bleeding episode ® FVIIa/NovoSeven ® Tissue factor Faster haemostasis leads to Fewer transfusions/ transfusion- free surgery Reduced rebleeding Faster recovery Reduced morbidity and mortality Improved quality of life

18 17 Haemophilia & congenital bleeding disorders NovoSeven® expansion project Haemophilia with inhibitors Acquired haemophilia FVII and FXI deficiency GlanzmannBernard-Soulier Other coagulation factor defects Surgery & Intensive care *) = Patients with chronic liver disease Upper gastro- intestinal bleeding *) Orthotopic liver transplantation *) Liver resection *) Reversal of anti- coagulation therapy Stem cell transplantation Intra-cerebral bleedings Liver resection Trauma

19 18 Financial results Net turnover12,034 11,351 66,5536,0019 Operating profit 2,856 2,740 41,6061,38216 Net financials (59)824- Profit before tax2,9552,981 (1)1,6881,38622 Net profit1,925 1,908 11, EPS (DKK)* * Earnings per share on a diluted basis, ie million shares in H and million Q DKK million First half year Second quarter % chg % chg

20 19 Outlook for 2002 As of August 6 th, 2002 Expected sales growth between 6-8% Growth in operating profit of 5-10% is reaffirmed Net financial income now expected to be approximately DKK 250 million Tax rate still expected at the level of 35% Investments still expected at DKK 4.5 billion Share repurchasing programme of DKK 2 billion initiated Above outlook is based on the assumption that exchange and interest rates remain at the current level (6 August 2002).

21 20 Novo Nordisk A focused healthcare company CIBC World Markets Frontenac Institutional Investor Conference September 2002 Director of Investor Relations Rasmus Jorgensen

22 21 Investor Information Investor Relations contacts: Novo Nordisk A/S Investor Relations Novo Allé DK­2880 Bagsværd Denmark Fax (+45) Peter Haahr Phone (+45) Palle Holm Olesen Phone (+45) Rasmus Jorgensen Phone (+1) Share information Novo Nordisk’s B shares are listed on the stock exchanges in Copenhagen and London. 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

23 22 Sales by therapy first half year 2002 Insulin sales growth in International Operations (IO), Europe and North America. NovoNorm® growth in Europe and IO North America and Europe both drive growth Growth in Europe and the US, but Japan hit by depreciation of JPY, increased competition and low market growth Negatively affected by parallel trade within Europe and by lower market growth Insulin sales growth in International Operations (IO), Europe and North America. NovoNorm® growth in Europe and IO North America and Europe both drive growth Growth in Europe and the US, but Japan hit by depreciation of JPY, increased competition and low market growth Negatively affected by parallel trade within Europe and by lower market growth Diabetes care +6% Haemostasis management +15% (1%) hGH HRT (1%) Key observations: Total turnover of DKK 12,035 mn: +6%

24 23 Key observations: Weak Q1, but both insulin and NovoSeven ® growth returned in Q2 NovoSeven ®, insulin and hGH continue to grow. Growth affected by depreciation of JPY, increasing competition, price decreases and weak market development Weak Q1, but strong Q2 growth driven by insulin and oral anti-diabetes products Europe +4% +4% International Operations +20% North America +10% Japan & Oceania (4%) Sales by region first half year 2002 Total turnover of DKK 12,035 mn: +6%

25 24 Diabetes care Sales by quarter Key observations: Insulin growth primarily realised in International Operations and North America, followed by Europe Japan & Oceania was impacted negatively by the depreciation of JPY and decreased slightly The roll-out of NovoRapid® and NovoMix® continues - analogue sales up by 171% in 1H 2002 NovoNorm®/Prandin® growth driven by Europe and International Operations DKK million ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 + 9% + 9%

26 25 Haemostasis management (NovoSeven ® ) Key observations: Growth in North America continues Solid Q2 growth in Europe, partly due to large single orders in several European countries Pan European Haematology Business Unit now established Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 DKK million Sales by quarter + 20% + 20%

27 26 Growth hormone therapy DKK million Sales by quarter Key observations: Norditropin® SimpleXx® still growing in Europe and the US Growth in Japan affected by depreciation of JPY, a mandatory price reduction as well as increased competition in general and a relatively slow market development Sales and marketing team under restructuring in Japan Sales and marketing team under restructuring in Japan Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 - 1% - 1%

28 27 Hormone replacement therapy DKK million Sales by quarter Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 - 4% - 4% Key observations: Lack of growth primarily due to increased parallel trade within Europe, but also lower market growth Low-dose sequential product, Novofem™, will be launched in Europe during 2002 The termination of the Women’s Health Initiative study (WHI) increases market uncertainty, but will most likely favour low- dose products

29 28 Improved postprandial control vs lispromix %-17% p < 0.05 p < S-glucose excursion 0-5h (mmol/l h) Hermansen K et al. Diabetes Care 2002;25:

30 29 Insulin detemir – simply better Detemir compared with NPH : Significantly less within- subject variability Relative decrease in body weight Significantly less nocturnal hypoglycaemic events Produces a smoother nocturnal glucose profile The duration of action of detemir is 20 hours at a therapeutically relevant dose of 0.4 U/kg. C max CV (%) AUC 0-24h, AUC 0-24h, CV insulin conc. (%) (%) Insulin detemir 1320 NPH insulin 2637 Reduction51%45% p-value < Significantly lower within-subject variability Within-subject variability of pharmacokinetics

31 Insulin detemir NPH Change in Weight (Kg) over 12 months Change in Weight (Kg) over 12 months -1.7 Kg E. Standl et al. Abstract number 467 ADA 2002 Body weight control with insulin detemir p = 0.002

32 31 AERx ® s.c. HbA 1c (%) HbA 1c mean profiles, ITT population, mean± 2 SEM 2 SEM Our inhaled insulin – Now in Phase ADA % -0.74% HbA 1c (%) reduction Key observations from Phase 2: Deep lung deposition of aerosols “Breath Check”, one unit increments, highly reproducible delivery Rapid-acting profile, one unit increments and patient-friendly features Glycemic control equal to that of intensive treatment with s.c. human insulin Lower tendency of hypoglycemic events No major safety or technical issues

33 32 NN The first once daily GLP-1 derivative No or low hypoglycaemic risk Glycaemic control sustained over 3 months Maximum effect on blood glucose in 1 week Weight control One daily injection ß-cell mass increase in animal models

34 33 Currency exposure 2001 avg = avg = Effect of 5% appreciation on operating profit* (DKK million) JPY+140 USD+110 GBP+50 * ie before hedging. 1H 2002 avg = H 2002 avg = 8.29 Aug 5Apr 30 DKK per USD (8.5%) DKK per 100 JPY (1.4%)

35 34 Sales by therapy in first half year 2002 DKK million % of total % chg (2002) Insulin etc7,6117, OAD* Diabetes care, total8,4127, Haemostasis management1,7261, Growth hormone therapy998 1,0118 (1) HRT (1) Other Total12,03411, * Oral antidiabetes products (OAD) include NovoNorm®/Prandin® as well as GlucoFormin ® (generic metformin) sales by Biobrás in 1H 2002.

36 35 Sales by region in first half year 2002 DKK million % of total % chg (2002) (2002) Europe 5,2145, North America2,8522, Japan & Oceania1,9982,07917 (4) International Operations1,9701, Total 12,03411,

37 36 ’In-market’ sales Growth compared to previous years Q Q Q Jan/ Feb 2002 Q YTD May 2002 Total market growth: VolumeValue9%13%9%11%9%13%8%12%5%9%6%10% Novo Nordisk growth: VolumeValue9%11%8%9%9%12%8%13%5%10%6%10% Insulin sales in Europe – ‘in-market’ sales Source: Based on IMS ‘brand market data’. Preliminary information for YTD May 2002 Note: ‘In market data’ reflects sale of insulin products from the wholesalers to the pharmacists.

38 37 European analogue conversion - NovoRapid® Short-acting segment in Europe Q Q Short-acting human insulin 37% Short-acting insulin analogues Short-acting human insulin June 2000 NovoRapid® market share 12.3%* Humalog market share 26.5%* * IMS ‘brand’ volume market share of short-acting insulin. Preliminary information for Apr/May 2002 Share of short-acting segment May % * IMS ‘brand’ vol. market share of short-acting insulin.

39 38 Corrective measures Enhanced focus on analogue conversion NovoRapid® to be backed by NovoMix® 30 Consolidation of European management Strategic changes implemented in Japan Dedicated cross-functional Norditropin ® SimpleXx® sales team Several upcoming clinical trials Cost-containment programme targeting areas not affecting key production, sales or R&D activities Improved control measures Slide from Q1 / 02 conference call

40 39 Status on NN622 Current clinical trials stopped and new planned studies postponed Tumour mechanism studies initiated Several possible outcomes of mechanism studies Mechanism not of human relevance Mechanism of human relevance Mechanism unresolved Renewed ragaglitazar assessment Q The decision to suspend the clinical development of ragaglitazar will not impact Novo Nordisk’s expectations for the financial results for 2002 Slide from 22 July conference call

41 40 Selected volume market share development Month of Lantus launch February 2002 May 2002 USA26%26%27% Europe57%57%57% Germany44%42%43% Basal segment 51%37%36% Short-acting42%43%45% Mix-segment43%44%45% Source: Based on IMS data.


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