NVO » Topics » Oral antidiabetic products

This excerpt taken from the NVO 6-K filed Oct 28, 2005.

Oral antidiabetic products

Sales of oral antidiabetic products increased compared to the same period in 2004 by 2% in local currencies and 1% in Danish kroner to DKK 1,254 million. The development in sales compared to the same period last year was positive both in Europe and International Operations. This was partly offset by lower sales in the US market, reflecting a slightly lower market share for Prandin®.

Stock Exchange Announcement No 25 / 2005
Page 4 of 18

This excerpt taken from the NVO 6-K filed Feb 22, 2005.
Oral antidiabetic products
Sales of oral antidiabetic products increased in all regions and in total by 21% measured in local currencies and 15% measured in Danish kroner to DKK 1,643 million, with growth primarily driven by North America but also by International Operations.

Biopharmaceuticals
Sales of biopharmaceutical products increased by 15% in local currencies compared to 2003 and by 11% measured in Danish kroner to DKK 8,498 million.

NovoSeven®
Sales of NovoSeven® increased by 19% in local currencies compared to 2003. Measured in Danish kroner sales increased by 13% to DKK 4,359 million, with all regions contributing to growth, but with North America, Europe and International Operations as the major growth drivers. In the fourth quarter, sales were positively affected by a timing-related increase in sales to a number of countries in International Operations.

     The sales growth of NovoSeven® was driven by several factors in 2004. Due to the high penetration within spontaneous bleeds in congenital inhibitor patients, the predominant part of the growth within the inhibitor segment has been generated by treatment of acquired haemophilia patients and usage of NovoSeven® in connection with elective surgery. Furthermore, the marketing approval in Europe in the first quarter of 2004 of NovoSeven® for the control of bleeding in patients with factor VII deficiency and Glanzmann’s thrombasthenia added to growth. Treatment of spontaneous bleeds for congenital inhibitor patients remains the largest area of use. In addition, sales are perceived to have been positively affected by increased investigational use of NovoSeven® influenced by data from clinical trials from the NovoSeven® expansion programme.

Growth hormone therapy (Norditropin® and Norditropin® SimpleXx®)
In local currencies sales of Norditropin® and Norditropin® SimpleXx® products increased by 11% compared to 2003. Measured in Danish kroner sales increased by 9% to DKK 2,317 million and were driven

by Europe and North America. The prefilled delivery device NordiFlex® was launched in Japan and selected European countries during 2004 as well as in the US market in January 2005.
     In Japan, the launch of NordiFlex® in July 2004 contributed to the positive development in Novo Nordisk’s market share during the second half of 2004; however, the government-mandated reduction in reimbursement prices in April 2004 impacted sales negatively.

Other products
Sales of other products within the biopharmaceuticals segment, which predominantly consists of hormone replacement therapy (HRT) related products, grew by 11% in local currencies and by 7% in Danish kroner to DKK 1,822 million.

     The sales growth in 2004 was positively impacted by the change in July 2003 of the US distribution set-up for Novo Nordisk’s HRT products and by the continued market penetration of the low-dose continuous-combined product Activella® and the topical oestrogen product Vagifem®. However, global sales in 2004 were negatively impacted by the overall contraction of the HRT market.

Costs, licence fees and other operating income

The cost of goods sold increased by 9% to DKK 8,050 million, representing a gross margin of 72.3%, an increase from 71.7% in 2003. Gains from an improved product mix as well as productivity increases, totalling slightly above 1 percentage point, were only partially offset by a negative currency impact.
     Total non-production-related costs increased by 9% to DKK 14,576 million. The increase reflects especially costs related to sales and distribution, which increased in line with the growth in sales. The main drivers of sales and distribution costs in 2004 were, respectively, launch activities for Levemir® in Europe; an increased US sales force, primarily focusing on promotion of insulin products but also related to the changed set-up for HRT products; and costs related to an impairment charge on intangible assets in Brazil.
     As a consequence of the implementation of IFRS 2 ‘Share-based payment’, Novo Nordisk in 2004 expensed costs related to share-based programmes amounting to DKK 104 million. The comparable expense included in the IFRS-based statements for 2003 was DKK 76 million.
     Total costs related to depreciation, amortisation and impairment losses in 2004 were DKK 1,892 million compared to DKK 1,581 million in 2003. The costs for 2004 include DKK 326 million in non-recurring impairment charges, compared to DKK 178 million in 2003.
     Total income related to licence fees and other operating income was DKK 575 million in 2004 compared to DKK 1,036 million in 2003, primarily reflecting a lower level of non-recurring income in 2004.

Net financials and tax

Net financials showed a net income of DKK 477 million in 2004 compared to DKK 954 million in 2003, reflecting a lower level of hedging income in 2004. The foreign exchange hedging gains, primarily related to the hedging of the US dollar, were DKK 663 million compared to DKK 1,195 million in 2003. Foreign exchange hedging gains in the fourth quarter of 2004 were positively impacted by un-


Novo Nordisk Annual Report 2004
43

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EXCERPTS ON THIS PAGE:

6-K
Oct 28, 2005
6-K
Feb 22, 2005
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