By Dominic Chopping

 

Novo Nordisk AS reported results for the third quarter on Friday. Here's what we watched:

 

SALES: Sales rose 2.1% to 30.93 billion Danish kroner ($4.85 billion) against the DKK30.82 billion expected in a FactSet analyst poll. The Danish pharmaceutical company had already pre-announced third-quarter numbers in local currencies, saying both revenue and operating profit grew 7% on year. The company noted lower-than-anticipated negative impacts from the coronavirus pandemic, as well as underlying market demand. Sales growth was also helped by inventory changes at U.S. wholesalers, it said.

 

NET PROFIT: Net profit rose to DKK10.3 billion from DKK10.19 billion a year earlier, just shy of the DKK10.35 billion forecast by analysts in a FactSet poll. The company said patients in the U.S. and Europe in particular stockpiled medicines in the first quarter amid the coronavirus pandemic, but these patients destocked during the second and third quarter. It also noted a gradual recovery in the number of patients initiating treatment in the third quarter.

 

WHAT WE WATCHED:

 

GLUCAGON-LIKE PEPTIDE-1: Novo Nordisk's glucagon-like peptide-1 drugs, or GLP-1, to treat type 2 diabetes had a 31% increase in sales in 3Q on the year, driven by an 82% rise in Ozempic sales to DKK5.43 billion, offset slightly by a 7% sales decline of its Victoza drug to DKK4.77 billion.

 

MARGINS: The gross margin was 83.3% in the third quarter compared with 83.2% for the same period last year. The slight increase reflects asset impairments in 2019 as well as positive product mix and productivity, partly countered by a negative impact from lower realized prices in the U.S. and a negative currency impact of 0.3 percentage points. The operating margin slipped to 41.4% from 42.7%.

 

GUIDANCE: Novo Nordisk also recently upgraded its full-year guidance, expecting both sales and operating profit growth of 5%-8% on year in local currencies, after experiencing a lower-than-anticipated negative hit from Covid-19 and underlying market demand. Novo Nordisk said Friday that it now see sales growth in Danish kroner around 3 percentage points lower than in local currency and operating profit growth around 4 percentage points lower.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

October 30, 2020 09:14 ET (13:14 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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