Novo Nordisk (NYSE:NVO) continues its trend of relatively strong growth of its newer diabetes medications being offset by slower growth of older insulin drugs in the first quarter. Currency changes also negatively affected Novo's revenue line, but that's out of the company's control.

Novo Nordisk results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Change


26.9 billion DKK

28.5 billion DKK


Income from operations

12.5 billion DKK

13.5 billion DKK


Earnings per share

4.40 DKK

4.06 DKK


Data source: Novo Nordisk.

What happened with Novo Nordisk this quarter?

  • The year-over-year results were affected by the weakening of the Danish kroner versus other currencies. Measuring revenue in local currencies, revenue was up 5% year over year.
  • Sales of GLP-1 drug Victoza continued to lead the way, jumping 18% in local currencies. Recently approved Ozempic, which is in the same class but only has to be injected once a week, is off to a good start with sales of 69 million DKK ($11 million as of May 7, 2018) in the first quarter.
  • The launch of Tresiba, Novo's new long-acting insulin, continues to be strong with sales increasing 33% in local currencies. However, it couldn't make up for the decline of Levemir, which dropped 22% in local currencies, resulting in a 3% overall decline in local currencies for the long-acting insulin class.
  • In February, Novo released positive results from Pioneer 1, the first phase 3a trial for oral semaglutide, which is the same active drug as Ozempic. But because semaglutide is an oral version, it should compete better with other oral diabetes therapies than the injected Ozempic version.
  • In March, the FDA updated the label for Tresiba to include data from the Devote trial that showed the drug produced less severe hypoglycemia -- low blood sugar levels -- than insulin glargine.
Doctor taking a patient's blood glucose level with medications on a table.

Image source: Getty Images.

What management had to say

Lars Jorgensen, Novo's president and CEO, is keeping tight lipped about expectations for Ozempic and the potential cannibalization of Victoza, although he noted that the company expects Ozempic to reach at least 1 billion DKK in 2018. "It's still early days in terms of the launch, and we still believe that the overall GLP-1 business can grow double digits, so that's what we're seeing and we think that dynamic will continue," Jorgensen said.

On pricing, Jorgensen was more upbeat than on the insulin market, where Novo Nordisk getting a lot of pricing pressure. "I think GLP-1 is still a market where differentiation among products is what drives prescription," Jorgensen said. "So there's of course pressure from any payer on negotiating contracts, but it's not the same nature as we see in the basic categories where products are being put up against each other and excluded [from insurers' formularies of covered drugs]."

Looking forward

Management narrowed 2018 guidance, which it now expects to grow in the 3% to 5% range as measured in local currencies. The range for operating profit growth was also narrowed to 2% to 5% year-over-year growth, again in local currencies.

The year will be full of clinical trial results for oral semaglutide, which could reaccelerate growth. In the second quarter, investors should get data from four different Pioneer trials testing oral semaglutide in head-to-head comparisons against other diabetes medications. Five more trials in the phase 3 program will read out in the second half of the year, giving the sales force a robust body of data to work with -- assuming the trials are successful and the drug is approved.

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