Novo Hikes Forecasts on Hopes for New Blockbuster Drug
The world's biggest insulin producer Novo Nordisk raised sales and profit forecasts for 2013 on hopes its new Tresiba drug will soon win approval in the United States and add further momentum to surging profits.
The Danish firm said on Thursday it expected 2013 sales growth in local currencies of between 8 and 11% and operating profit growth of around 10%. Its previous guidance had been for single-digit growth in each.
It also posted 2012 net profit up 23% to 5.80 billion crowns, the highest in the company's history.
On Tresiba, chief executive Lars Rebien Sorensen said: "I have the anticipation that this will be a multi-billion dollar blockbuster drug."
Tresiba has already been approved in Europe and Japan but there had been concern about its future in the U.S. market after regulators there said last November that its key component degludec had a higher heart safety risk than other diabetes treatments.
However an advisory panel to the U.S. Food and Drug Administration subsequently voted to recommend approval of degludec, despite the signals of possible cardiovascular risk.
"For Tresiba, we have a good portion of sales included in our guidance, but the largest part of that is from the United States," Sorensen said.
"Whether we will be able to launch in the second quarter or it is deferred to the third quarter has some implications on the top line of the company," Sorensen said.
Any setback for Tresiba, would be good news for rival Sanofi, whose Lantus product currently dominates the long-acting insulin market and had 2011 sales of around $5 billion.
It could also be positive for Eli Lilly, which is developing a rival drug that is a few years behind.
Record profits
Novo Nordisk said fourth-quarter earnings before interest and tax (EBIT) rose a quarter to 7.57 billion Danish crowns ($1.38 billion), compared with a forecast for 7.11 billion in a Reuters poll.
"The fourth quarter was another blow-out result and growth was extremely good," Alm Brand analyst Michael Jorgensen said.
The result was helped by a 29% rise in sales of diabetes treatment Victoza to 2.71 billion crowns, against a forecast for 2.85 billion, and a 20% increase in the sale of modern, or synthetic, insulins, in line with expectations.
"It is a strong result from Novo Nordisk," said Sydbank analyst Soren Hansen. "Expectation to the report were sky high and I think they met those expectations."
Sales grew 16% to 20.96 billion crowns, slightly above analysts' average 20.86 billion crowns estimate.
The group said it would initiate a new share buy-back programme of up to 14 billion crowns and raised the dividend 29% to 18 crowns.
Earlier this week, rival Eli Lilly reported a fall in fourth-quarter profit as competition from generic drugs, particularly for its once top-selling schizophrenia drug Zyprexa, drove revenue lower.
