"Modern" insulins and the injectable once-daily GLP-1 analog Victoza (liraglutide), launched in the U.S. in February, drove the sales and profits of Danish diabetes speciality company Novo Nordisk AS during 2010, President and CEO Lars Rebien Sorensen told a Feb. 2 sales and earnings call.

Novo Nordisk's operating profit increased to DKK 18.9 billion ($3.5 billion) in 2010, a 16% increase in local currencies, and sales rose to DKK 60.8 billion ($11.2 billion), up 13% in local currencies and just ahead of revised guidance released at the nine-month stage.

At that time, Novo Nordisk forecast that its 2010 operating profit would rise by more than 15% and its sales by 11%-12% in 2010, in local currencies [A#00101029]).

Victoza is expanding the U.S. market for GLP-1 agonists, which now account for around 4.5% of the total diabetes market by value, Sorensen said. Its sales totaled DKK 2.3 billion in 2010, having been launched in the U.S. that year and in the EU in the middle of 2009. Victoza has also been launched recently in Russia, Argentina, Mexico and four countries in the Middle East.

Global sales of the company's modern insulins franchise grew by 18% in 2010 to reach DKK 26.6 billion, while sales of its recombinant Factor VII (NovoSeven) increased to DKK 8 billion, up 8% in local currencies.

Novo Nordisk's North America sales grew by 29% in local currencies, while European sales grew by 6%. Novo Nordisk has a 51% share of the global insulin market in volume terms, compared with Eli Lilly Inc's 22% share and Sanofi-Aventis SA's 23% share, Sorensen reported.

The company is expecting a similar strong financial performance this year, a prediction that may be more certain following FDA's "complete response" letter in October for Amylin Pharmaceuticals Inc.'s long-acting GLP-agonist, Bydureon (exenatide). Many analysts and diabetes experts have viewed Bydureon as a potentially strong competitor to Victoza Also see "Bydureon Goes Back To The QTc Drawing Board" - Pink Sheet, 20 October, 2010.).

Novo Nordisk expects operating profits to grow by 15% in 2011, and sales by 8%-10%, in local currencies. The slightly lower sales growth is due to continued intense competition, generic competition to oral antidiabeteic products, and an impact from healthcare reforms in the U.S. and Europe, Sorensen said.

Tougher Targets

Having reached in 2010 a series of long-term financial targets set in 2008, Novo Nordisk outlined tougher long-term targets for the next several years. These include a 70% return on invested capital (ROIC) and a 35% operating margin, compared with an ROIC of 64% and an operating margin of 31% in 2010. The higher ROIC reflects a continued lower growth in invested capital relative to operating profit and a stable effective tax rate, the company said.

A share buyback program valued at DKK 9.5 billion was completed during 2010, and another valued at DKK 10 billion is being set up for 2011.

Degludec Filings This Year

The company has completed Phase III studies of its new ultra-long-acting basal insulin, Degludec, and is preparing to submit regulatory applications for the EU and U.S. in the second half of 2011.

Headline results from 10 clinical Phase IIIa studies with Degludec and the combination product DegludecPlus (which also contains the short-acting insulin aspart) were outlined during the earnings call by Novo Nordisk's Chief Scientific Officer Mads Krogsgaard Thomsen.

Degludec showed non-inferiority to insulin glargine (Sanofi Aventis SA's Lantus) with its effects on HbA1c levels, while being associated with a statistically significant 35% fewer nocturnal hypoglycemic events in a 52-week study in 1,030 patients, Thomsen said. The patients were also being treated with metformin with or without a DPP-IV inhibitor.

However, in another study, the three-times weekly administration of Degludec did not reach a primary endpoint of non-inferiority to daily insulin glargine.

Thomsen noted that, unlike other basal insulins, Degludec can be taken at different times of the day without affecting its efficacy or effects on nocturnal hypoglycemia and therefore ought to improve compliance; a new disposable pen delivery system is also being developed for Degludec and Degludec Plus.

Other R&D progress includes the expected start of Phase III studies with a fixed ratio of liraglutide and Degludec in the first half of this year, Thomsen continued. Phase III studies of a fast-acting recombinant Factor VII analog, NN1731, and a long-acting Factor IX product, NN7999, are expected to start in mid-2011.

However, an oral GLP-1 project, NN9925, and an obesity product, NN9161, which were both in Phase I, have been discontinued.

[Editor's note: this story was updated Feb. 3 to correct headline.]

- John Davis (j.davis@elsevier.com)

Novo Nordisk Toughens Long-Term Financial Targets As 2010 Sales Grew By 13%, Profits By 16%

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