Novo Nordisk A/S (Novo), a Denmark-based medical devices company, has reported sales of DKK12.4 billion for the first quarter of 2009, up 18%, compared with the sales of DKK10.6 billion in the year-ago quarter. It also reported net profit of DKK2.6 billion, or DKK4.41 per diluted share, for the first quarter of 2009, compared with the net profit of DKK2.1 billion, or DKK3.48 per diluted share, in the year-ago quarter.
Outlook 2009
Novo Nordisk still expects sales growth in 2009 at the level of 10% measured in local currencies. This is based on expectations of continued market penetration for Novo Nordisk’s key strategic products within diabetes care and biopharmaceuticals as well as expectations of continued intense competition during 2009. Given the current level of exchange rates versus Danish kroner, the reported sales growth is now expected to be around 4.5 percentage points higher than the growth rate measured in local currencies.
For 2009, growth in operating profit is now expected to be at least 10% measured in local currencies. The increase reflects lower expected research and development costs for 2009 due to timing of phase 3 clinical trial programmes. Furthermore, the forecast is based on assumptions of a continued improvement of the gross margin and increased spending for sales and distribution relative to sales due to the increase in Novo Nordisk’s global sales force. Given the current level of exchange rates versus Danish kroner, the reported operating profit growth is now expected to be around 8 percentage points higher than the growth rate measured in local currencies.
For 2009, Novo Nordisk now expects a net financial expense of DKK1.5 billion. The current expectation reflects significant foreign exchange hedging losses, primarily related to the US dollar and the Japanese yen.
The effective tax rate for 2009 is now expected to be around 23%.
Capital expenditure is still expected to be around DKK3 billion in 2009. Expectations for depreciations, amortisation and impairment losses of around DKK2.6 billion are unchanged, and free cash flow is now expected to be around DKK10 billion. Gross margin improved by 2.6 percentage points to 79.9% in the first three months of 2009, primarily reflecting continued productivity improvements and a positive currency impact of around 1.0 percentage points.
Reported operating profit increased by 35% to DKK3,810 million. Adjusted for the impact from currencies and non-recurring costs in 2008 related to the discontinuation of all pulmonary delivery projects, underlying operating profit increased by around 15%.
In Europe, the Committee for Medicinal Products for Human Use (CHMP) under the European Medicines Agency (EMEA) adopted a positive opinion for Victoza (liraglutide) and Novo Nordisk expects to receive the European Marketing Authorisation from the European Commission within approximately two months.
In the US, following the Advisory Committee meeting on 2 April, Novo Nordisk is working with the US Food and Drug Administration (FDA) as it completes the review of the liraglutide application.
For 2009, operating profit measured in local currencies is now expected to grow by at least 10% and reported operating profit growth to be around 8 percentage points higher.
Lars Rebien Sorensen, president and chief executive officer, said: We are satisfied with the financial performance during the first quarter of 2009 which is driven by solid sales growth for the modern insulins and gross margin improvements. Following the positive opinion in Europe for Victoza®, we now look forward to launching Victoza® in the first European markets this summer.