After a couple of disappointing quarters, Novo Nordisk (NVO -0.03%) delighted investors when it released its first-quarter earnings report on Wednesday, topping relaxed expectations.

Novo Nordisk results: The raw numbers


Q1 2017

Q1 2016

Year-Over-Year Change


28.5 billion DKK

27.2 billion DKK


Income from operations

13.5 billion DKK

12.3 billion DKK


Earnings per share

4.06 DKK

3.71 DKK


Data source: Novo Nordisk. DKK = Danish kroner.

What happened with Novo Nordisk this quarter?

  • Sales of top-selling Victoza were up 25% year over year. While its market share decreased year over year, the class of drugs that Victoza falls into increased relative to other diabetes drugs, resulting in increased sales.
  • All three of Novo Nordisk's new insulins -- Tresiba, Xultophy, and Ryzodeg -- more than doubled sales, but they're working off a small base, so the combined 170% growth gets tempered by its older insulins -- NovoRapid, Levemir, and NovoMix -- that only grew by a combined 3% growth.
  • Obesity drug Saxenda saw sales grow 122% year over year but, again, it's a relatively small product.
  • While insulin sales produced decent growth, the same couldn't be said for Novo Nordisk's hemophilia drugs, which decreased 9% year over year as sales of NovoSeven fell 12%.
  • Novo Nordisk's drugs for growth disorders also had a disappointing quarter with combined sales down 32% year over year. Some of the decline was due to a one-time gain in the year-ago quarter, but management also noted increased competition in the U.S. lowering sales in the recently completed quarter.
Novo Nordisk's pen injectors

Image source: Novo Nordisk.

What management had to say

Lars Fruergaard Jorgensen sees potential for Saxenda and semaglutide, the once-weekly version that acts on the same pathway, which it's also testing for obesity: 

The anti-obesity market offers an attractive long-term growth opportunity due to the large unmet need. The existing market size for anti-obesity medication is currently small and only 2% of the 600 million patients are being treated with an anti-obesity medication.

There's a balancing act between supporting new launches like its newest insulin, Xultophy, while supporting sales of its older drugs as Jorgensen explained:

Xultophy will take some activity from the sales force, but it's not a massive allocation. So, I believe we'll keep the pressure on our growth brands, Tresiba, Victoza and Saxenda. And from a sales force staffing point of view, I think we have the reps necessary to promote this portfolio.

Looking forward

Management increased its 2017 guidance, but the increase was only due to positive currency impact when international sales get converted to the Danish kroner. Novo Nordisk now expects sales to increase 1% to 4% year over year and operating profit is expected to be flat to up 4% year over year.

On the regulatory front, investors can look forward to an EU approval of its newest hemophilia drug Refixia in the next month or so after a positive CHMP opinion was issued in March. In the U.S., the Food and Drug Administration is expected to make a decision on Refixia this quarter.