Novo Nordisk Upbeat on Sales Outlook Despite Flat Earnings -- Update
August 09 2017 - 3:08AM
Dow Jones News
By Dominic Chopping
Danish pharmaceutical company Novo Nordisk A/S (NOVO-B.KO) on
Wednesday reported flat second-quarter net profit, but lifted its
growth targets for the year on expectations of robust sales of its
type-2 diabetes drug Victoza and long-acting insulin Tresiba.
Sales in the quarter got a boost from sales of new diabetes and
obesity drugs, but growth in North America was pegged back by
adjustments to rebates and competition from generic drugs.
Sales growth in 2017 is now expected to be 1% to 3% measured in
Danish kroner, improved from an earlier estimate of 0-3%, with
reported growth seen around three percentage points lower.
Novo Nordisk said growth in operating profit is now expected to
be 1% to 5% measured in Danish kroner, up from an earlier estimate
of -1% to 3%. Reported growth is seen around 4 percentage points
lower.
The difference between local currency and reported growth stems
from the 8% depreciation of the U.S. dollar, and other currencies
in which Novo Nordisk invoices its customers, against the euro and
the Danish krone since the first quarter.
Novo Nordisk said talks with pharmacy benefit managers and
managed-care organizations in the U.S. are progressing, though the
company expects average prices after rebates to fall. Market access
for its key products is expected to remain broadly unchanged
though.
"We are well on track to deliver on our targets for 2017 based
on sales growth driven by our new, innovative products within
diabetes and obesity care and a continued focus on cost control,"
said Chief Executive Lars Fruergaard Jorgensen. "Although the
formulary negotiations in the U.S. reflect the tough competitive
environment, we remain confident that our long-term financial
growth targets are achievable."
Demand for its modern insulin and obesity drugs should underpin
an improved performance at Novo Nordisk this year, though the
company said that challenging trading conditions in the
U.S.--including lower prices, generic products and intensifying
competition--and adverse economic conditions in several
international markets would keep a lid on growth.
Net profit little changed at 9.95 billion Danish kroner ($1.57
billion) in the three months to June 30 compared with DKK9.97
billion in the same period last year, beating analysts'
expectations of DKK9.65 billion according to a FactSet poll. Sales
rose to DKK28.64 billion from DKK27.46 billion.
-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter:
@domchopping @WSJNordics
(END) Dow Jones Newswires
August 09, 2017 02:53 ET (06:53 GMT)
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