According to the Centers for Disease Control, diabetes affects nearly 10% of all people 20 and older and one-fifth of people older than 60 in the United States. Combine this with a North American pharmaceutical market that exceeds $250 billion, and you've created the perfect environment for drug developers seeking an indication for which to produce blockbuster drugs. Sure enough, all of the pharmaceutical companies with drugs or medical devices in the diabetes-care space have been reporting solid top-line growth for the past several years. Danish drugmaker Novo Nordisk (NYSE:NVO), with the release today of its year-end financial results, largely continued that trend.

Sales gained a healthy 15% in 2006 to $6.7 billion ($1 = 5.95 Danish kroner) even after a strong 2005 that saw sales growth of 16%. After remaining flat in the 72% range for the past three years, gross margin increased 250 basis points to more than 75%, as Novo realized higher average prices for its drugs and improved its production efficiency. With Novo plowing nearly 16% of its top line back into research-and-development spending, operating margins were flat at 24%, and net income grew only 10% to $1.1 billion. The all-important free cash flow number declined 3% as well, because of increased tax payments in the fourth quarter.

Novo Nordisk is by no means exclusively a diabetes-care drug developer, but sales of products in this segment grew 16% last year and accounted for more than 70% of all revenue. North American sales of modern insulins jumped 41%, and based on that strong growth, Novo is guiding for more than 10% sales growth and a 15% increase in operating profit this year.

Besides the predictable growth in its existing diabetes business, Novo has an exciting pipeline, with three diabetes compounds in phase 3 testing. Amylin (NASDAQ:AMLN) investors should take notice, since results from Novo's phase 3 study for its competing GLP-1 analogue are due out in the second half of this year, and regulatory filing is expected in mid-2008. Its Liraglutide diabetes product is also in late-stage testing, and a trial using the drug as a treatment for obesity -- a multibillion-dollar indication in itself --in non-diabetic patients is now under way.

As Novo Nordisk is a Danish pharmaceutical firm, you won't find as much information about it here in the U.S. relative to some of the domestic pharmas. But investors willing to do a little extra financial sleuthing will find a pharmaceutical company that's the global leader in a rapidly growing health-care segment.

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Fool contributor Brian Lawler has no plow experience and does not own shares of any company mentioned in this article. The Fool has a disclosure policy.