Novo Nordisk (NVO -3.87%) continued its slow-but-steady growth as it waits for an inflection point from the launch of oral semaglutide, which should be approved by the FDA later this year.

Novo Nordisk results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


29.3 billion DKK

26.9 billion DKK


Income from operations

14.2 billion DKK

12.4 billion DKK


Earnings per share

4.36 DKK

4.40 DKK


Data source: Novo Nordisk. 1 Danish krone (DKK) = $0.15 as of May 9.

What happened with Novo Nordisk this quarter?

  • A relatively strong Danish krone buoyed sales and operating income. At constant exchange rates, sales growth was a more modest 4%, while operating income was up 8% year over year. Operating income grew faster than revenue because there was a one-time reversal of writedowns of oral semaglutide pre-launch inventory.
  • International operations drove the growth in sales. More specifically, the region that encompasses Africa, Asia, the Middle East, and Oceania was up 29% year over year at constant exchange rates. Sales in the U.S. were down 5% at constant exchange rates due to changes in inventory.
  • In the U.S., Novo Nordisk's largest region by far, sales of insulin decreased 14% at constant exchange rates because of the aforementioned reduced inventory as well as lower prices. The decrease was in part offset by increases in sales of GLP-1 drugs -- Victoza and Ozempic -- which increased 6% at constant exchange rates.
  • In February, the Food and Drug Administration approved Esperoct for patients with hemophilia A. The European Commission is expected to approve the drug shortly, rubber-stamping a positive opinion from the Committee for Medicinal Products for Human Use that was issued in April.
  • In March, Novo Nordisk filed three marketing applications with the FDA. Two of the applications were for oral semaglutide (the same active ingredient as in injectable Ozempic): one for lowering blood glucose levels and one for cardiovascular risk reduction; the third application was for Ozempic as a treatment for cardiovascular risk reduction. Because an oral GLP-1 drug would be a game changer in the diabetes indication, Novo Nordisk used a priority review voucher to speed up the FDA review process for blood glucose levels, setting up a potential approval six months after the submission.
Doctor helps patient with a blood glucose monitor

Image source: Getty Images.

What management had to say

Lars Fruergaard Jorgensen, Novo Nordisk's president and CEO, highlighted how Ozempic has helped increase the overall GLP-1 market in the U.S.:

Since the launch of Ozempic in the first quarter of 2018, the annual GLP-1 market growth has accelerated from 23% to the current market growth of just under 30%. We are pleased with the Ozempic launch, which has now achieved a total GLP-1 volume market share of 11.8% in the U.S. Novo Nordisk has thereby stabilized its GLP-1 volume market share at around 44%.

Jorgensen also talked about acquisition plans:

We're looking at relative smaller-size transactions in the low single billion dollar range. When you look at therapy areas and technologies, it's really opportunity-based. And I think we have opportunities both in our core area, but of course we have a more stated strategy of supporting growth in the biopharm area based on in-licensing and acquisitions.

Looking forward

Management is still looking for 2019 sales growth of 2% to 5% at constant exchange rates with operating income growth in the 2% to 6% range.

Oral semaglutide should be approved in the U.S. late in the third quarter, providing some growth late this year and hopefully accelerating growth next year. While the drug will certainly cannibalize sales of Victoza and Ozempic, oral semaglutide should take some sales from other injected GLP-1 drugs, such as Eli Lilly's Trulicity, and more importantly, win over type 2 diabetes patients who have resisted injectable medications.