Novo Nordisk A/s (NVO) Q4 2022 Earnings Call Transcript

Novo Nordisk A/s (NVO 0.88%)
Q4 2022 Earnings Call
Feb 01, 2023, 7:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Q4 2022 Novo Nordisk A/S earnings conference call. [Operator instructions] I would now like to turn the conference over to your speaker today, Lars Fruergaard Jorgensen, CEO. Please go ahead.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, operator. Welcome to Novo Nordisk's earnings call for the full year of 2022 and the outlook for 2023. My name is Lars Fruergaard Jorgensen, and I'm the CEO of Novo Nordisk. With me today, I have executive vice president and head of commercial strategy and corporate affairs, Camilla Sylvest; executive vice president and head of North America operations, Doug Langa; executive vice president and head of development, Martin Holst Lange; and finally, chief financial officer, Karsten Munk Knudsen.

All of us would be available for the Q&A session. Today's announcement and the slides for this call are available on our website, novonordisk.com. Please note that the call is being webcast live, and the recording will be made available on our website as well. This call is scheduled to last one hour.

Please turn to the next slide. The presentation is structured as outlined on Slide 2. Please note that all sales and operating statements would be in constant exchange rates unless otherwise specified. Please turn to Slide 3.

As always, I need to advise you that this call will contain forward-looking statements. These are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For further information on the risk factors, please see announcement for the full year of 2022 and the slides prepared for this presentation. Please turn to the next slide.

In 2022, we delivered double-digit sales growth and operating profit growth, and we continue to make progress on our strategic aspirations. I would like to go through the highlights before handing over the word to my colleagues. We continue to make progress across all dimensions of purpose and sustainability. Our carbon emissions decreased by 29% compared to pre-pandemic levels in 2019, and we continue to reach even more patients and patients living with diabetes compared to last year.

In line with our aspiration of being a sustainable employer, we expanded the number of women in leadership positions to 39% compared to 36% in 2021. Within R&D, we are pleased that we now have initiated the first two phase 1 trials based on the siRNA interference RNA technology platform that we acquired in 2021. Looking back at 2022, we have seen exciting trial readouts across all our therapy areas. And in 2023, we look forward to having an equally exciting year.

Martin will come back to this and our overall R&D milestones later. In 2022, we deliver double-digit sales growth reflecting strong commercial execution across geographies and our therapy areas by both operating units contributed to sales growth. We saw particular strong sales growth in North America, driven by accelerated demand for our GLP-1 treatments for both diabetes and obesity. Camilla and Doug will go through the details per therapy area later.

Karsten will go through the financials, but I'm very pleased with the sales growth of 16% and operating profit growth of 15% in 2022. Lastly, I have a brief update on our strategic aspirations within financials. We have achieved the U.S. aspiration of reverting 70% of sales to products launched since 2015.

And IO sales growth has, in the last couple of years, surpassed expiration of 6% to 10% growth. Consequently, we have decided to remove these regional expirations. Going forward, we'll be focused on and committed to delivering solid sales and operating profit growth. With that, I'll give the word to Camilla for an update on execution.

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Thank you, Lars. And please turn to the next slide. As Lars mentioned, our 16% sales growth for the full year of 2022 was driven by both operating units, with North America operations growing by 21% and international operations growing 13%. The strong sales growth has unfortunately resulted in periodic supply constraints and related job shortages notifications across a number of products and geographies.

Our GLP-1 sales increased by 42%, driven by North America growing 36% and international operations growing 57%. Insulin sales decreased by 11%, driven by a 7% decline in international operations and a 21% sales decline in North America operations. The U.S. insulin sales declined by 22%.

This was driven by lower realized prices, as well as a decline in volume. Compared to 2021, the U.S. insulin volume market declined by 3%. Furthermore, insulin sales in international operations were impacted by the implementation of volume-based procurement in China starting in May 2022 and lower sales in EMEA.

Obesity care sales grew by 84% overall. In international operations, sales grew by 82%. And in North America operations, obesity care sales grew 85%. In the U.S., obesity care sales grew by 90%.

Rare disease sales grew 1%, driven by a 5% sales increase in international operations, offset by a 5% decline in North America operations. Please turn to Slide 6. Our 14% sales growth within diabetes care continues to be higher than the overall diabetes market. That means we have improved our market share by 1.8 percentage points to 31.9%.

We continue to be on track to reach one-third of the diabetes value market by 2025. This increase primarily reflects GLP-1 market growth, as well as share gains in both operating units. Please turn to the next slide. International operations diabetes care sales increased by 10% in 2022, driven by GLP-1 sales growing by 57%.

Novo Nordisk remains the market leader in international operations with a GLP-1 value market share of 64%. This is driven by share gains across geographies. Ozempic continues to expand its GLP-1 market share leadership in international operations with around 43% market share. While the GLP-1 class growth is more than 50%, GLP-1 penetration remains low at around 5% of total diabetes groups globally.

Rybelsus sales more than doubled compared to 2021. The growth was mainly driven by new launches and increasing volumes, making Rybelsus the second largest growth contributor in 2022 after Ozempic. The increased momentum in international cooperation is driven by launches in key markets such as Japan, Italy, and Spain. And with that, I will hand over the word to Doug.

Doug Langa -- Executive Vice President, Head of North America Operations

Thank you for that update, Camilla. Please turn to the next slide. The U.S. GLP-1 market volume grew by around 50%, comparing the fourth quarter of 2022 to the fourth quarter of 2021.

The recent competitor launch in GLP-1 has supported the continued acceleration in market growth. And from an NBRx perspective, we continue to see all-time high levels of new patients starting on our portfolio of GLP-1 products by the end of 2022. Measured on total prescriptions, Novo Nordisk has maintained its market share leadership with a market share of more than 50%. Please go to the next slide.

Obesity care sales increased by 84%, with 85% growth in North America operations and 82% in international operations. The global brand of obesity market expansion continues with a volume growth of more than 50%. We are excited that Wegovy is now launched in Denmark and Norway, the first two markets outside of the U.S. But we also remain encouraged by the performance of Saxenda in the international operations.

Region EMEA MIA is the key growth driver with 96% growth in 2022. In the U.S., obesity care sales grew 90%, with both Wegovy and Saxenda contributing to growth. All dose strengths of Wegovy were made available in the U.S. again in December of 2022.

And in only a few weeks ago, Wegovy prescription trends have accelerated and already reached all-time high levels. The uptake underlines the significant unmet need for patients with obesity. Many patients have been waiting for all doses of Wegovy to be available again, which has created a pent-up demand. We are now looking forward to continuing the relaunch of Wegovy.

Now, back to Camilla for an update on rare disease.

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Thank you, Doug. And next slide, please. Our rare disease sales increased by 1% in 2022. This was driven by a 5% sales growth in international operations, offset by a 5% decline in North America operations.

Rare blood disorders grew by 7%, driven by NovoSeven, as well as the launch product, Esperoct and Refixia. Specifically, hemophilia A products grew by 6%, hemophilia B sales by 16%, and NovoSeven by 6%. Rare endocrine disorder sales declined by 6%. The declining sales were driven by international operations decreasing 1% and by North America operations decreasing by 18%.

The sales were negatively impacted by lower realized prices in the U.S., as well as supply constraints in the fourth quarter of 2022. And now, over to you, Martin, for an update on R&D.

Martin Holst Lange -- Executive Vice President and Head of Development

Thank you, Camilla. Please turn to Slide 11. Firstly, I'm very happy to be able to share that we have initiated two phase 1 trials within NASH. This is particularly exciting because the two assets are both based on the small interfering RNA technology that we acquired as part of the Dicerna acquisition back in 2021.

Both trials are 52-week trials and target LXR and MARC1, respectively. Both assets are aiming for long-term net resolution and fibrosis improvement with monthly or even less frequent dosing. The objective of both phase 1 trial is to investigate the safety, tolerability, and PK/PD profile of each asset, respectively. The fact that we have now initiated these trials is a testimony to the successful integration and fast progression of the RNA-based research and development in Novo Nordisk.

As mentioned at our capital markets day in March of last year, our ambition is to generate an annual average of free first human doses across therapy areas based on the RNA technology over the next 10 years. Please turn to the next slide. We're looking forward to a very exciting 2023 with many important phase 3 trial readouts across our therapy areas. I would like to briefly go through a few highlights.

Within Type 2 diabetes, we expect to see results from the phase 3 trial PIONEER PLUS with once-daily oral semaglutide 25 and 50 milligram, respectively, during the first half of 2023. The primary endpoint of the 68-week trial is to confirm superiority of oral semaglutide 25 and 50 milligrams versus oral semaglutide 40 milligram on A1c reduction. The expectation is to reach an efficacy and safety profile comparable to that of Ozempic. Also, in diabetes, we expect to initiate the phase 3 program with CagriSema in the second half of 2023, following the very exciting phase two result that we shared last year.

Furthermore, we have completed the 26-week safety extension phases for the ONWARDS 1 and 6 trials with insulin icodec. The results confirmed that insulin icodec has the potential to be the ideal starter insulin for people with Type 2 diabetes, while there is still more assessments to be done in Type 1 diabetes. We expect to submit insulin icodec for regulatory review in the first half of 2023. In obesity, we look forward to sharing the phase 3 results from once-daily oral semaglutide 50 milligram, while the expectation is to reach a level of efficacy and safety comparable to that of Wegovy.

Pending the results, this would add to our portfolio of obesity treatments to address the significant unmet need that remains for many patients with obesity. Furthermore, we look forward to sharing the results from the ongoing SELECT cardiovascular outcomes trial in the middle of 2023. Within rare diseases, we are looking forward to a decision from regulatory authorities on once-weekly Sogroya for the treatment of growth hormone deficiency. This will offer a reduced treatment burden compared to daily Norditropin and a device that is easy to use for patients.

Finally, we expect to initiate a phase 3b trial of Ziltivekimab for the treatment of heart failure with preserved ejection fraction in the first half of 2023. Altogether, we are looking forward to a very exciting year with clinical trial initiations, as well as results across all therapy areas. With that, over to you, Karsten.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Martin. Please turn to the next slide. In 2022, our sales grew by 26% in Danish kroner and 16% at constant exchange rates, driven by both operating units. The gross margin increased to 83.9% compared to a 3.2% in 2021, driven by a positive product mix due to increased GLP-1 sales, a positive currency impact, and productivity improvements.

Lower Realized prices, particularly in the U.S. and China, partially offset these effects. Sales distribution costs increased by 25% in Danish kroner and 16% at constant exchange rates. The increase is driven by launch activities and promotional spend for Rybelsus and Ozempic, as well as market development activities for obesity.

The cost increase is reflecting low activity levels in 2021 due to COVID-19 and higher distribution costs. Research and development costs increased by 35% in Danish kroner and 29% at constant exchange rates. The increase is driven by higher clinical activity levels within other serious chronic diseases at GLP-1, as well as the operating costs and amortizations related to the acquisition of Dicerna Pharmaceuticals. We acquired Dicerna in the fourth quarter of '21.

Administration costs increased by 10% in Danish kroner and 6% at constant exchange rates. Operating profit increased by 28% in Danish kroner and by 15% at constant exchange rates. Net financial items for 2022 showed a loss of around 6 billion Danish kroner, compared to a gain of around 0.4 billion in '21. This mainly relates to losses following the appreciation of the U.S.

dollar as reflected in the favorable currency impact on operating profits. As per the end of December '22, a positive market value of financial contracts of approximately 1 billion Danish kroner has been deferred for recognition in 2023. The effective tax rate in '22 was 19.6% compared to 19.2% in '21, mainly reflecting nonrecurring impacts from acquisitions. Net profit increased by 16% and diluted earnings per share increased by 18% to 24.44 kroner.

Free cash flow was 57.4 billion Danish kroner compared to 29.3 billion Danish kroner in '21, supporting the strategic aspiration to deliver attractive capital allocation to shareholders. The cash conversion in '22 was positively impacted by timing of rebate payments in the U.S., including provisions related to the revised 340B distribution policy. Income under the 340B program has been partially recognized. Please go to the next slide.

In 2023, we expect to increase our capital expenditure to around 25 billion Danish kroner. This is a significant step-up compared to 2022 and reflects the innovation-based growth strategy that we are pursuing in Novo Nordisk. The increase in capital expenditure mainly relates to investments in additional capacity for active pharmaceutical ingredient production and fill-finish capacity for both current and future injectable and all products across therapy areas. In the coming years, the capital expenditure to sales ratio is expected to be low double digits.

The investments will gradually add capacity, flexibility, and resilience in our manufacturing setup, while also accommodating for potential upsides to forecasts. Next slide, please. In 2022, we returned more than 49 billion Danish kroner to shareholders via dividends and share buybacks. Novo Nordisk has consistently returned its free cash flow business through both share buybacks and dividends.

At the annual general meeting on March 23, 2023, the board of directors will propose a final dividend of 8.15 kroner for a total 2022 dividend of 12.44 kroner, a 19% increase compared to 2021, making it the 27th consecutive year with increasing dividends. In addition to the dividend, 24 billion Danish kroner was used for repurchase of shares. For 2023, the board of directors has approved a new share repurchase program of up to 28 billion to be executed during the coming 12 months. Next slide, please.

We continued 2023 with solid momentum and expect the sales growth to be between 13% and 19% at constant exchange rates. This is based on several assumptions as described in the company announcements. The guidance reflects expectations for sales growth in both international operations and North America operations, mainly driven by GLP-1-based treatments for diabetes and obesity care. The sales growth within diabetes and obesity care is expected to be partially countered by declining sales in rare disease due to supply constraints.

The guidance ranges for sales and operating profit growth to reflect the level of volume growth of GLP-1-based diabetes treatments. They also reflect the inherent uncertainty of the pace of obesity care market expansion following the relaunch of Wegovy in the U.S. and expected gradual rollout in international operations. The outlook includes an expectation of continued periodic supply constraints and related drug shortage notifications in 2023 across a number of products and geographies.

This is driven by higher-than-expected volume growth for GLP-1-based products, such as Ozempic, and temporary capacity limitations at some manufacturing sites. We are gradually increasing our supply capacity. We expect that operating profit will grow between 13% and 19% at constant exchange rates. This primarily reflects the sales growth outlook and continued investments in current and future growth drivers within research, development, and commercial.

Commercial investments are mainly related to the relaunch of Wegovy in the U.S., obesity care market development activities in international operations, as well as promotional activities for Ozempic and Rybelsus. The acquisition of Forma Therapeutics is negatively impacting operating profit growth due to higher operating costs and amortizations. Finally, the guidance also reflects inflationary impacts on the cost base. Given the current exchange rates, most notably a weakening of the U.S.

dollar, we expect a negative currency impact for 2023. Our reported sales are expected to be 4 percentage points lower at CER, and operating profit is expected to be 5 percentage points lower at CER. The negative currency impact on operating profit of 5 percentage points is partially offset by a net gain on financial items. We expect the financial items will amount to a net gain of around 2.4 billion Danish kroner, mainly reflecting gains associated with foreign exchange hitting contracts.

Capital expenditure is expected to be around 25 million Danish kroner in 2023 as I outlined earlier in this presentation. Our free cash flow is now expected to be between 60 billion and 68 billion Danish kroner, reflecting the sales growth and investments in capital expenditure. That covers the updated outlook for '23. Now, back to you, Lars, for final remarks.

Thank you, Karsten. Please turn to the final slide. We are very pleased with double-digit sales growth for the full year of 2022 and that we continue to reach even more patients. 2023 is truly a significant year in history of Novo Nordisk as we celebrate our 100-year anniversary.

In this period, we have grown from a small Danish company into a global one, delivering lifesaving medicines for millions of patients around the world. In 2023, we look forward to continuing our focus on commercial execution, expanding our pipeline, and investing significantly in expansion of production capacity for current and future products. With that, we are now ready for the Q&A. We currently ask all participants to limit her or himself to one or maximum two questions.

Operator, we are now ready to take the first question.

Questions & Answers:

Operator

[Operator instructions] We will now take our first question. One moment, please. And it comes from the line of Harry Sifton from Credit Suisse. Please go ahead.

Your line is open.

Harry Sephton -- Credit Suisse -- Analyst

Thank you very much for taking my question. I'll just be the one on pricing, please. So, our latest pricing data suggests that you've already taken a low single-digit price increase in January across your U.S. portfolio despite the larger headroom for price increases this year with high CPI.

Could you look to increase prices a second time later in the year, given the headroom for price increases? And then, just on your international operations as well, there are a number of drug pricing reforms being proposed across European markets. Do you anticipate that these changes could be material near-term headwinds to your growth in international operations? Thank you very much.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Harry. So, Doug, perspective on how we look at pricing in the U.S. first?

Doug Langa -- Executive Vice President, Head of North America Operations

Yeah. Thanks, Harry, for the question. You know, we had a commitment back in 2016 around pricing, and we've held to that commitment. And I don't want to give any quarterly statements on price moving forward.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you. So, on Europe, we don't anticipate any single event to be mature. We have, over the years, seen various countries operating with different reforms, sometimes in the form of something that looks more like a tax. So, we are used to operating in this environment, and you should expect that for now our guidance incorporates what we anticipate in this.

Thank you, Harry. So, next question, please.

Operator

Thank you. We will now take the next question. And it comes from the line of Peter Verdult from Citi. Please go ahead.

Your line is open.

Peter Verdult -- Citi -- Analyst

Thank you. Pete Verdult, Citi. Two questions, Doug and Camilla. First is in light of these U.S.

GLP-1 trends we're seeing the intense publicity and media coverage. Can you characterize how, if at all, recent payer discussions are evolving? Are you sensing any efforts to step up and restrict access more aggressively? And can you provide an update on the 30 million commercial opt-in number that you provided in Q3? And then, to Lars and Karsten, just if I could try my luck and push you to better understand what is possible and what is not. With respect to Wegovy capacity that you have in place for 2023. If I look at the Q1 trends.

We're fast approaching 40,000 weekly script rate, which is implying annualized sales of around 2 billion. I know you've talked about pent-up demand, but you and Lilly going to start promoting quite actively to develop the market further. So, just with that in mind, do you have the theoretical capacity in place to support Wegovy being a $3 billion to $4 billion drug in 2023? I'm not asking for guidance, but I want to get a handle on what's possible and what is pure fantasy, which led to [Inaudible] market potential this year. Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Pete. So, Doug, first on -- first, GLP-1 trends, peer discussions, and, you know, the patient access we have.

Doug Langa -- Executive Vice President, Head of North America Operations

Yeah, thanks, Pete, for the question. And I would say that, certainly, first thing to recognize is that the volume of prescriptions in the GLP-1 category is still only about 10%, so there's a lot of runway there. Secondly, what I would say is that the payers do take notice the categories that are growing. This one is certainly growing at double digits.

But they also recognize the need for this product. And again, it's only 10% of the prescription volume. Did I missed something?

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thirty million.

Doug Langa -- Executive Vice President, Head of North America Operations

Oh, yes, Pete, I'm sorry. Importantly, we guided in Q3 of 30 million. We're now at approximately 40 million lives. So, it's overall 80% access, and that equates to -- the effective access or number of lives is approximately 40 million.

And that's comprised of commercial, Medicaid, and some federal business.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Doug. And, Karsten, on Wegovy capacity versus what we see in the market now. I know you're not going to tell the whole story. What can you say?

Karsten Munk Knudsen -- Chief Financial Officer

Yeah. So, it's, of course, a key question that we spend a lot of time on also internally to ensure that we're not disappointing our customers when we launch products in different markets. And my starting point to answering the question is the guidance I just covered before. So, it's 15% to 19% top-line growth guidance, which, in itself, is a very competitive industry-wise.

It's, of course, very attractive and a large chunk of that growth comes from Wegovy. So, we've not been able to get to this level of guidance without a significant step-up in Wegovy. And as I'm sure you can appreciate then, it's important for us to say that we can supply to our guidance, so both the top end and the low end of the guidance. So, that's what we commit to in terms of our investor communication.

Then, in terms of additional scenarios, what I would say is that the that 90% is not a magic ceiling in terms of our guidance. It's basically a function of products and geographies and timing. And then, yes, we continue to scale up manufacturing capacity of Wegovy. As you know, we have, you know, one line in-house.

We have one CMO up and running at full speed. And we have one line on track to be online first half of this year and then another line on track to get online second half this year. So, we have significant step-up in Wegovy production capacity. And then, I'd say just as a final note, of course, we do not have unlimited capacity, and so trending on a vertical TRx uptake is impossible.

And that's why we've been out saying be careful with the first data points because they are impacted by the pent-up demand that Doug was talking to.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thanks, Karsten.

Peter Verdult -- Citi -- Analyst

Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

So, to summarize, clearly, a significant addressable market from an access point of view and also capacity coming in, so we can go after that opportunity. So, very encouraging indeed. Thank you, Pete. Next question, please.

Operator

Thank you. We will now take the next question. And it comes in the line of Michael Nedelcovych from Cowen. Please go ahead.

Your line is open.

Mike Nedelcovych -- Cowen and Company -- Analyst

Thank you for the questions. I have two. The first is on the SELECT trial. When taking interim looks at SELECT, does Novo consider whether or not a futility analysis has been pre-specified and presumably passed to be material information to be shared with the market? That's the first question.

And then, the second question is on the oral semaglutide readout. So, when we see phase 3 obesity data for oral semaglutide, some of our consultants are expecting meaningfully diminished weight loss relative to injectables. If that ends up being the case, what percent weight loss would still support commercial success? Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Michael. I think, Martin, those are both to you.

Martin Holst Lange -- Executive Vice President and Head of Development

Yeah, absolutely. So, with regard to SELECT, as we already discussed, we had one look before the expected final outcome of the trial. That was done by DMC so we're not privy to the data. The DMC is looking at the totality of the data, and there was a pre-specification for when they could recommend to stop vis-a-vis very convincing superiority for semaglutide, i.e., more than 20% difference between semaglutide and placebo.

They recommended us to continue the trial which makes us believe that we are probably still in the realm of the 17% that we have sample sized for. But they look at everything, and they can recommend to stop the trials should they fail to do so. With regards to oral semaglutide, both in diabetes and obesity, the trials are designed and the doses are picked so that we expect to get exposure similar to that of subcutaneous semaglutide, Ozempic 2.0 milligram and Wegovy 2.4 milligram. And we would therefore aim to have full efficacy and full safety profile comparable to those two formulations.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

So, various active product profiles from what we can tell from a commercial opportunity perspective. Thank you very much, and thank you, Michael. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Sachin Jain from Bank of America. Please go ahead.

Your line is open.

Sachin Jain -- Bank of America Merrill Lynch -- Analyst

Hi, guys. Sachin Jain, Bank of America. Just two very simple questions, trying to get a bit more color on what's in guide. So, again, I'll try my luck.

So, first, on obesity, you've noted inherent uncertainty. And I think there's been commentary on pent-up demand and cash with the first data points. I'm just trying to get a sense of how much of a bolus you think this week over the first couple of weeks is and best expectations for run rate once that bolus comes off? And then, secondly, I know, Karsten, we've discussed this lots before. The GLP-1 growth rate is the biggest delta to guide.

Just from your perspective, are you expecting a trend shift through full year '23 from the existing 40% to 50% growth? Because I don't think a continuation of existing trends is assumed even in the top end of guide. Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Sachin. If I try to address the first question, Wegovy pent-up demand and sizing of that. And then, Karsten, you can get to the GLP-1. So, we know for a fact that patients have been lined up.

We have had some 60-plus patients on notice for one product where it's available. That's a quite unusual situation to have. So, we know for a fact that there's pent-up demand. It's really difficult for us to size it, to be honest.

We are obviously encouraged by the trend line we see. But we also do believe that there will be a normalization of that as we have gone through that bolus. But it's very difficult for us to give any meaningful sizing of it. We would be looking at the first, say, a couple of months, say, Q1 to really understand how that looks.

But the first data points are really exciting. So, you know, we feel we're in a really, really good place. On growth rates, I recall we have been saying in prior years that we thought the growth rate would go down. It didn't happen.

So, any crystal ball now?

Karsten Munk Knudsen -- Chief Financial Officer

Yeah. Thanks for reminding me on that one. So, I would say for you know, first of all, that's one of the reasons why we have a forward-looking statement in our announcements. That is when we start to come down on future market growth rates.

And I would say, secondly, that's also one of the reasons why we are rolling with an unusually broad guidance range this time around. When we look at the market growth, I can start out with the U.S., MAT-wise, based on the latest monthly data points, the latest data points, or we are around 40%, and that would be the same ex-U.S. also. So, a global volume market growth, MAT-wise, around 40, being the latest data point.

If we take shorter data points, in the U.S., we're closer to the 50% mark as a data point. Then, in terms of what that implies going forward, that's, of course, a function of our activities and competitor activities, as well as supply capacity for players in the markets. So, I'd say we have built our guidance based on continued strong market growth. Of course, I cannot give you, you know, our assumptions, but more than to say continued strong market growth and GLP-1 in diabetes being a key driver for Novo Nordisk in '23.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Maybe just adding that when you have a category where you have efficacious products competing against each other, it typically leads to market growth more than, you know, share gain. And that's what we're seeing in Type 2 diabetes. And I think that's also what we would expect to see in obesity category that in the case that products drives market growth more than share play. Thank you, Karsten.

Thank you, Sachin. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Richard Parkes from BNP Paribas. Please go ahead.

Your line is open.

Richard Parkes -- Exane BNP Paribas -- Analyst

Hi. Thanks very much for taking my questions. Just got a couple. Firstly, on the capex expansion plans.

Just wondering whether you can give us any indication of what that increased capacity could allow you to meet in terms of market expansion kind of by the end of the decade, at least some kind of ballpark range in terms of kind of what market GLP-1 market expansion that would allow you to meet supply for would be really helpful. And then, secondly, on the ONWARDS 1 and 2 trials of insulin icodec, I mean playing devil's advocate, it looks incrementally worse than previously. I think the HbA1c advantage is no longer significant, or significantly worse, and both trials showing worse hyper glycemia profile. So, I'm just wondering how this impacts your expectations for that products over, both provability and commercial potential.

Thanks very much.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Richard. So, let me try to give a perspective on capex, and then, Martin, you can get to the ONWARDS trials. So, for us, this creates obviously ability to supply in a market that we believe would have a very attractive growth. It creates strategic flexibility.

And I think in the GLP-1 space, you will have the potential of having one of the biggest drop categories ever seen. So, really being able to build that capacity and serve the markets, I believe, creates a competitive advantage that is very attractive. So, we also have pipeline products coming that will be using the same type of capacity. So, both from an API and insulin perspective.

We have a lot of optionality in the footprint we have. And being able to build this and drive efficiencies is something that's required to play longer term in this category. So, you should take it as a sign of confidence and, you know, trust in the existing business we have and the pipeline we have coming. Martin, on ONWARDS and the legislation and what does that mean for the potential?

Martin Holst Lange -- Executive Vice President and Head of Development

Yeah, absolutely. So, first of all, it's important to recall that both ONWARDS 1 and ONWARDS 6 were originally the 52 and 26-week studies. This was the regulatory intent. And in the 52-week period of the ONWARDS 1 study, as you know, we showed a superior A1c reduction with a good and flat and stable -- sorry, hypoglycemia profile.

We then, for regulatory reasons, have to do extensions of those two studies in both Type 2 and in Type 1 diabetes, basically, because we need to show safety exposure. So, this focus of the extension is safety assessment and establishing the long-term safety profile of insulin icodec in both Type 1 and Type 2 diabetes. If I stay with ONWARDS 1, over the additional 26 weeks, we actually saw a completely flat A1c curve show a maintained glycemic control over time. We lost the statistical significance.

But again, in an open label extension, you also lose a little bit of rigor and power, and we sort of have to expect that. But it certainly confirms the efficacy profile of insulin icodec. With regards to hypoglycemia, first of all, it's important to recall already at 52 weeks, we saw very, very low hypoglycemia rates. There was a numerical difference between the two insulins, and that difference actually remained completely stable throughout the trial.

So, when we then see the statistically significant, it's a function of more events rather than all of a sudden seeing a difference between the two treatment arms. And it's also important, if we put that into a clinical context, to recall with the rates that we have seen, a patient on an insulin icodec in this setting would have to wait two to three years to experience an event of not severe hypoglycemia. And in that context, I also want to call out that the risk of having severe hypoglycemia with insulin icodec in ONWARDS 1 was almost effect of 10 lower than with insulin degludec. So, again, confirming the safety profile of icodec in this setting.

So, we remain very, very confident, from a clinical perspective, that icodec is the perfect starter insulin for Type 2 diabetes. And obviously, we're looking at ONWARDS 6, we had to acknowledge that, we have some work to do with Type 1 diabetes. And Camilla can maybe talk to the commercial potential of both obviously Type 2 and Type 1 diabetes.

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Yes. Thanks a lot, Martin. So, based on the totality of the data that you just went through and from the total ONWARDS program, we are very confident in the efficacy and the safety profile of once-weekly icodec and also the potential to become standard-of-care insulin of choice for people with Type 2 diabetes. And once-weekly insulin, of course, represents a whole new way of managing insulin that gives a lot of benefits to people as just described, but also on the convenience part.

It, by the way, also has a very positive environmental profile. And to your question about Type 1 diabetes, we would estimate that that is to the tune of potentially 7% of the total potential. So, that doesn't change our overall profile of icodec potential.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Camilla. Thank you, Martin. It's a clear sign of our commitment to raising the innovation height also in a critical area. The market for the generation of Novo Nordisk.

We're still investing in insulin and think we can drive tremendous value for patients and physicians here, still, 100 years in. Thank you, Richard. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Richard Vosser from JPMorgan. Please go ahead.

Your line is open.

Richard Vosser -- JPMorgan Chase and Company -- Analyst

Hi. Thanks for taking my questions. First question, just thinking on Ozempic trends and how you see those going forward. I think Q3, you were saying 40% of patients were naive to diabetes treatment of the new patients going on Ozempic.

How are you seeing the Wegovy relaunch impact that? And how do you see sort of that Ozempic situation developing throughout this year with Wegovy back into to full supply? You know, do you see that slowing down significantly because of Wegovy? And then, the second question, just going back to the reimbursement and payers, obviously, very good getting 40 million patients. How are the payers treating the patients maybe in the second, maybe third year of treatment if patients get that long. If they reach levels of normal BMI or lose significant amounts of weight, do payers then say, "Well, that's brilliant, you're back to normal," and come off the drug? Or how are they treating that in your reimbursement discussions? Thanks very much.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Richard. First, Camilla, on the Ozempic trends after Wegovy is in the market. Then, Doug, you can talk a bit through payers in a U.S. perspective.

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Yes. So, on Ozempic, we see a continued increase. We see -- we are back to TRx and NBRx leadership. When it comes to how much of the Wegovy sourcing that is from diabetes, then we can say that the uplift in the Wegovy trends in the U.S.

is basically from primarily the 0.25, the starter dose. And that basically means that these are patients that are new to GLP-1 treatment. Of course, looking forward, that means that we expect that there is a potential for both of these two classes to coexist and to continue increasing as we see both unexploited potential for GLP-1 treatment in diabetes, as well as in obesity.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thanks, Camilla. Doug, on the payer's perspective on multiple years of treatment.

Doug Langa -- Executive Vice President, Head of North America Operations

Yes, Richard, thank you. I think it's important to note that we're pleased with the level of access that we have today. Overall, 80% access is something that we're proud of, and the team has done a nice job. Effective access we've been hard at work at.

As you know, this requires opt-ins. But again, we're pleased with the overall 40 million lives that can have access. And how the payers are treating this, there's no stopping roles in place today. And I think the payers recognize that this is a chronic treatment.

And that's important for not only stakeholders, payers, but all the work that we're doing is to realize this as a serious chronic disease, and it's a chronic disease that needs long-term treatment.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Camilla. Thank you, Doug. Thank you, Richard. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Michael Leuchten from UBS. Please go ahead.

Your line is open.

Michael Leuchten -- UBS -- Analyst

Thank you. Two questions, please. Michael Leuchten from UBS. One, if I look at the value of the volume for Ozempic and Rybelsus in the U.S., there seem to be some trend changes in Q4, maybe Ozempic also in Q3.

Is that a fair reflection of the competitive rebating environment? Or should we not over-interpret those trends as we think about the value to volume looking into 2023? And then, a question for Martin. SELECT isn't really something you talk about actively anymore. It only really comes up in Q&A. Is that because in your mind, the relevance has taken a step back given it didn't stop at the interim? And we're maybe on track for the 17% risk reduction, which may not be as meaningful as maybe a 25% would have been? Or is there another reason why you don't mention it as much more as you have in the past? Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Michael. So, first, Karsten, on the value versus volume dynamics for GLP-1 trends.

Karsten Munk Knudsen -- Chief Financial Officer

Yeah. So, Michael, first of all, to your Q4 questions versus '22 or then -- there are no changes vis-a-vis '22. So, as you know, normally, for '24 -- then we give the [Inaudible] of scripts, and then there will be true-ups normally in Q4 that can impact the value to volume equation. So, I think the more appropriate way to look at it is for the full year.

And then, I'd say, on top of that, given the supply situation on Ozempic, there might be also some noise in that calculation from changes in inventory levels on Ozempic, specifically. From there, moving into 2023, while not guiding for value and volume for '23, then I'd say the dynamics remain the same between '22 and '23.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Karsten. And, Martin, on SELECT, why are you not talking about SELECT?

Martin Holst Lange -- Executive Vice President and Head of Development

So, first of all, we are still very excited and very confident about SELECT. Issue is obviously that we have no results to share. We have no data to share. And, therefore, the only thing I can call out, which hopefully you also saw in my part of the presentation is that we are looking very much forward to the data coming out around mid-2023.

And that will be incredibly exciting. So, we still think SELECT is very important and very exciting.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you. That's very clear. Thank you, Michael. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Keyur Parekh from Goldman Sachs. Please go ahead.

Your line is open.

Keyur Parekh -- Goldman Sachs -- Analyst

All right. Thank you. Hopefully, you can hear me OK. Two separate lines of questioning, please.

The first one on capex. At the 2022 capital markets day, your slides implied capex for 2025 to be between kind of 10 billion and 15 billion Danish krona. What you're guiding today implies capex close to 25 billion to DKK 30 billion Danish krona in 2025. So, just wondering if you can give us a sense for kind of how much of that doubling of capex is attributable to your perception of higher demand for the existing products, so B2B kind of Rybelsus, or GLP-1 diabetes products, versus how much of this is with a view to ensuring supply for the nondiabetes, nonobesity product as that pipeline emerges over the course of the next kind of two to three years.

So, that's kind of question number one. And then, separately kind of coming back to icodec. Camilla, would love your thoughts on how you think ONWARDS 1 and ONWARDS 6 the extension data changes, if at all, the commercial positioning kind of for this molecule from your perspective. Does this make it a little bit more of an international product compared to a U.S.

product, given the convenience at play here? Or do you still think there exists a room for you to have differential pricing for this molecule in the U.S., given the extension data? Thank you.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Keyur. Two very clear questions. So, first, Karsten, on capex versus what we said at capital markets day and a perspective on, you know, existing products, new areas. And then, Camilla, you can talk to the icodec, say, commercial opportunity.

Karsten Munk Knudsen -- Chief Financial Officer

Yeah, thank you, Lars. So, capex, of course, quite a significant step-up compared at our capital markets day. And again, that's why there's forward-looking statements. So, the world has a tendency to change these days more than usual.

I would say, this step-up in capex, to me, comes on a very positive background. I can, unfortunately, not to kind of separate how much is what because we have both facing and a different share platform. So, it's a little bit trying to separate hot and cold water, unfortunately, Keyur. But I would say that the main drivers to it is, first of all, a stronger volume uptick than what we had built into our initial capex modeling clearly and the stronger volume uptick impacts both on the API side of our current marketed products, as well as the fill-finish that we're scaling more so than the initiative plans.

And then, as to the pipeline, I'd say there are two main drivers to step-up. And you can say, in a historic perspective, where we were like, call it, between 5% and 10% capex to sales and now we are more in the, call it, between 10% and 15% capex-to-sales ratio toward 25%, the delta is that, historically, it was injectable peptide-based capex investments we're doing. And we continue to do that through the volume scaling I just spoke about. But on top of that, we are building to cater for the oral platform that just requires significantly higher amounts of API, whether it's for Rybelsus or sema obesity or some of the earlier oral compounds.

As you know, we have oral accretion in phase 1 and we have an oral GLP-1 kit also. So, clearly, for the all platform and then for the nonprotein peptide platforms, I would say we're looking at what are we doing to cater for pipeline assets like my [Inaudible] and Ziltivekimab and our ATTR as well, which is our antibody platform. So, that's why we're looking at also expanding our capacity on the monoclonal antibody sides. So, I hope that provides a little bit of color, but not fully able to separate the hot and the cold water.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Karsten. Exciting pipeline leads to need for capex. So, Camilla, how excited are you on icodec based on the recent data?

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Yes. Thank you, Lars. And as we just discussed before, we remain very confident in the efficacy and safety profile of icodec that given as a once-weekly insulin. It has the potential to become standard of care for people with Type 2 diabetes.

And to your question, this has not changed our perspective in terms of a global rollout of icodec. We remain equally confident in the U.S. and in the rest of the world for how this can help people with Type 2 diabetes. And keep in mind that the potential of this is that the basal segment approximately includes 30 million patients with a value of around $8 billion.

So, that's a place where we today have a market share in the ballpark of one-third. So, there's ample potential to increase that.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Yeah. Thank you, Camilla. Thank you, Keyur. Next question, please.

Operator

Thank you. We will now take the next question. It comes from the line of Simon Baker from Redburn. Please go ahead.

Your line is open.

Simon Baker -- Exane BNP Paribas -- Analyst

Thank you for taking my questions. Two if I may, please. Firstly, and this relates to some earlier questions. In recent years, the increased spend in the U.S.

on GLP-1 was offset by lower spending on insulin, which gave some easy headwinds for the category to expand. I was just wondering if you could give us an update on whether that is still the case. And then [Technical Difficulty] you talked about the impact of the Dicerna acquisition on 4Q R&D. I'm just wondering if you could give us an idea how much of the additional R&D expense incurred was one-off and how much is continuing? Thanks so much.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Simon. I don't know if you have those data, Doug, from the top of your head.

Doug Langa -- Executive Vice President, Head of North America Operations

What I would say is this, that insulin, as you saw, as we just reported, continue to be under pressure, pricing pressure, so payers still continue to take value there. And as I mentioned earlier, there's still only approximately 10% of the prescription volumes coming out of GLP-1. So, we still think that there's opportunity there.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

You can add that to DPP-4 price decline, and soon to come, SGLT2, will also create some space to fund innovation. So, yeah, Karsten on Dicerna, any one-off versus continued --

Karsten Munk Knudsen -- Chief Financial Officer

Yes. Simon, as we've been communicating all along in terms of our overall strategic resource allocation, then we are highly focused on allocating additional resources toward R&D to expand and diversify our pipeline. And that you've seen throughout the year with a significant step-up in R&D spend ending at 29% for the full year. You're right that in the fourth quarter, we have an extraordinary step-up also when you do the quarterly trending.

It's not due to Dicerna because we had Dicerna all along. So, it's basically due to two factors, one being, I would say, minor impairment on intangible assets and another piece being costs related to the Forma Therapeutics transaction and restructuring. And as you recall, then here at Novo, we are reporting clean numbers. So, where other companies would have been -- some of the companies have been adjusting this into core earnings or adjusted earnings, then here -- so you get what you see is what you get.

As to a specific number for Q4 in round terms between the two impairments and Forma, around DKK 0.5 billion.

Simon Baker -- Exane BNP Paribas -- Analyst

Thank you very much.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Simon. We have time for the final question.

Operator

Thank you. We will now take the next question. It comes from the line of Mattias Haggblom from Handelsbanken. Please go ahead.

Your line is open.

Mattias Haggblom -- Handelsbanken Capital Markets -- Analyst

Thank you so much. Two questions, please. Firstly, with regards to the decision in January to double down and initiate the high-dose sema obesity trial. I'm curious to understand what triggered the decision and why now almost 1.5 years after the Wegovy approval and why not earlier? And then, secondly, with top-line data from SELECT data due mid-2023, what's a reasonable time frame from top-line results and the data can help facilitate reimbursement outside the U.S.? A year? Or is it rather two, given the size and complexity of the study?

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Mattias. So, you mentioned high-dose sema obesity right now.

Martin Holst Lange -- Executive Vice President and Head of Development

So, first of all, we see emerging data suggesting that it is possible to max out on GLP-1 biology. And it's very, very clear based on some of our recent start is that we could potentially increase exposure and, thereby, accruing more weight loss than what we see with the current doses. There's obviously -- we had to pursue, we have to investigate because there is an opportunity to, without compromising on safety, to accrue even more weight loss, specifically in obesity, and potentially also improved glycemic control in diabetes. We aim to conduct these studies very, very fast.

And that also means that they will be available to patients if the data supports it in a not-so-distant future and still well within the relevant time period for semaglutide.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Then there was a question on timeline from SELECT data to reimbursement. So, ballpark, without going into too much detail.

Martin Holst Lange -- Executive Vice President and Head of Development

So, some of you have heard about -- I was breaking about being able to obviously handle our clinical data in a reasonable way. I would not be looking at a one- to two-year timeline. Obviously, we will close down the study. We will have the results around mid this year.

We'll do a regulatory file, and then we'll have the regulatory interactions. And then, it's, in the U.S., up to Doug and his team to discuss with payers and others on how that will impact the dynamics.

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Thank you, Martin. Thank you, Mattias, and thank you all for participating in our earnings call. Please reach out to our investor relations officer if you have more questions, and look forward to meet you and talk to you in the near future. Thank you very much.

Bye-bye.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Lars Fruergaard Jorgensen -- President and Chief Executive Officer

Camilla Sylvest -- Executive Vice President, Head of Commercial Strategy and Corporate Affairs

Doug Langa -- Executive Vice President, Head of North America Operations

Martin Holst Lange -- Executive Vice President and Head of Development

Harry Sephton -- Credit Suisse -- Analyst

Peter Verdult -- Citi -- Analyst

Karsten Munk Knudsen -- Chief Financial Officer

Mike Nedelcovych -- Cowen and Company -- Analyst

Sachin Jain -- Bank of America Merrill Lynch -- Analyst

Richard Parkes -- Exane BNP Paribas -- Analyst

Richard Vosser -- JPMorgan Chase and Company -- Analyst

Michael Leuchten -- UBS -- Analyst

Keyur Parekh -- Goldman Sachs -- Analyst

Simon Baker -- Exane BNP Paribas -- Analyst

Mattias Haggblom -- Handelsbanken Capital Markets -- Analyst

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