Novo Nordisk Misses Forecasts as Victoza Disappoints
Danish drugmaker Novo Nordisk said it expected its U.S. insulin market share to improve and edged up its full-year targets after stiff competition for insulin and disappointing sales for diabetes drug Victoza led it to miss first quarter forecasts.
Sales of Victoza, one of Novo Nordisk's biggest growth drivers, increased 81% to 1.99 billion Danish crowns ($353.90 million), but missed an average 2.28 billion crowns average estimate in a Reuters poll of analysts.
"That can only be attributed to the Victoza disappointment," said Jyske Bank dealer Martin Munk.
Novo Nordisk posted rising sales and operating profits for the first quarter, but both landed below analysts' average estimates.
Sales of its key modern insulins grew 17% to 7.87 billion crowns, slightly above an average estimate of 7.67 billion in a Reuters poll.
"All in all, this would be a solid performance for most pharma companies, but given the high expectations for Novo Nordisk it is likely to disappoint," Deutsche Bank said in a note to clients, describing the quarter as a "rare miss".
Chief Financial Officer Jesper Brandgaard said in a webcast first-quarter Victoza sales had been hit by rebates given last year in some countries including the United States.
Novo had also experienced strong competition in the insulin business, he said, not least from U.S. rival Eli Lilly.
"If we zoom in on the U.S. market which is crucial for growth, we were under pressure," Brandgaard said.
"We have seen strong competition in the first quarter," he said, adding competition had also been tough in Europe.
"Our market share in the United States will continue to improve...we are confident...that we will see a rebound in Novo Nordisk's market share," Brandgaard said.
Novo Nordisk raised its guidance for 2012 sales growth measured in local currencies to 8-11% from a previous forecast of 7-11%, and its operating profit growth view, also measured in local currencies, to "at least 10%" from "close to 10%".
"The expectation for operating profit growth reflects significant investments in sales and marketing including costs related to an expansion of the U.S. sales force in the middle of 2012," the company said.
First-quarter operating profit rose to 6.39 billion Danish crowns from 5.42 billion in the corresponding quarter last year, slightly below an average estimate of 6.42 billion in a Reuters poll of analysts.
Sales grew 13% year-on-year to 17.75 billion crowns, also slightly missing analysts' average 18.02 billion crowns estimate.
"The negative element is the Victoza sale, which is a growth driver, but fails to meet expectations," said Sydbank analyst Soren Hansen.
On Wednesday, Britain's largest pharmaceuticals company GlaxoSmithKline reported revenue grew just 1% percent in the first quarter, reflecting pressure on its business from government price cuts in Europe and some emerging markets and tough year-ago comparisons.
On Friday, Amylin Pharmaceuticals posted a wider first-quarter net loss as it spent to support the U.S. launch of its diabetes drug Bydureon.
