Slide 1 Jefferies 2014 Global Healthcare Conference 5-June-2014 Karsten Munk Knudsen CVP of Finance & IT at NNI
Slide 2 Agenda Highlights and key events Sales update R&D update Financials and outlook
Slide 3 Forward-looking statements Novo Nordisk s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company s Annual Report 2013 and Form 20-F, both filed with the SEC in February 2014, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forwardlooking statements. Words such as believe, expect, may, will, plan, strategy, prospect, foresee, estimate, project, anticipate, can, intend, target and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to: Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and Statements regarding the assumptions underlying or relating to such statements. These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forwardlooking statements. Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk s products, introduction of competing products, reliance on information technology, Novo Nordisk s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance. Please also refer to the overview of risk factors in Risks to be aware of on p 42-43 of the Annual Report 2013 on the company s website novonordisk.com. Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise. Important drug information Victoza (liraglutide) is approved for the management of type 2 diabetes only
Slide 4 Highlights First three months of 2014 Sales development Sales increased by 7% in local currencies and 2% in Danish kroner North America, International Operations and Region China grew by 7%, 12% and 18% in local currencies, respectively Modern insulin and Victoza grew by 10% and 13% in local currencies, respectively Biopharm sales grew by 10% in local currencies Tresiba roll-out continues the encouraging performance in countries with competitive reimbursement Research and Development Recruitment for the cardiovascular outcomes trial for Tresiba, DEVOTE, is progressing ahead of plans and sufficient data to support an interim analysis is now expected mid-2015 DUAL TM III shows benefits of transferring people with type 2 diabetes inadequately controlled on GLP-1 therapy to Xultophy, the intended brand name for IDegLira Positive results from phase 3a trial with N8-GP (NN7088) for treatment of haemophilia A. Submission postponed due to production capacity expansion, which is expected to be operational by 2017/2018 Financials Operating profit increased 15% in local currencies and diluted earnings per share increased 10% 2014 financial updated: Sales growth now expected to be 7-10% in local currencies (previously 8-11%) Operating profit growth still expected to be around 10% in local currencies
Slide 5 North America remains the main contributor to growth Sales as reported first three months of 2014 Growth analysis first three months of 2014 Region China +15% International Operations (2%) Japan & Korea (5%) 11% 15% 6% 45% North America +3% Local currencies Growth Share of growth North America 7% 45% Europe (1%) (3%) International Operations 12% 27% Region China 18% 24% Europe (1%) 23% Japan & Korea 8% 7% Total sales 7% 100% Sales of DKK 20.3 billion (+2%)
Slide 6 Growth is driven by modern insulin, Victoza and NovoSeven Sales as reported first three months of 2014 Growth analysis first three months of 2014 Other Norditropin +2% (2%) 3% 7% 4% NovoSeven +11% 11% 78% 79% Diabetes care +1% Sales of DKK 20.3 billion (+2%) Local currencies Growth Share of growth New-generation insulin n/a 6% Modern insulin 10% 63% Human insulin (5%) (9%) Victoza 13% 25% Protein-related products 6% 2% OAD (37%) (18%) Diabetes care 6% 69% NovoSeven 17% 24% Norditropin 4% 4% Other biopharmaceuticals 7% 3% Biopharmaceuticals 10% 31% Total 7% 100%
Slide 7 Victoza has a strong and expanding position in the global DPP-IV, GLP-1 and SGLT-2 segment DKK billion Segment value Share of segment value growth Segment value market shares Victoza Other GLP-1 SGLT-2 DPP-IV 80 70 60 CAGR 1 value: 42% 100% 80% 19% 22% 80% 60% 50 40 30 20 10 60% 40% 20% 40% 20% 16% 0 Feb 2009 Feb 2014 0% 2013 vs. 2012 2 2014 vs. 2013 2 0% Feb 2009 Feb 2014 1 CAGR for 5-year period, 2 MAT Feb Note: Segment only includes DPP-IV, GLP-1 & SGLT-2. Other oral anti-diabetic agents and insulin excluded Source: IMS MAT Feb 2014 value figures
Slide 8 North America and Europe drive Victoza sales DKK billion 12 10 8 6 4 2 0 3.0 4.0 Victoza reported sales (MAT) 4.8 6.0 6.9 7.9 8.9 10.8 11.1 11.611.9 10.2 9.5 2011 2012 2013 Q1 Victoza regional sales first three months of 2014 (MAT) Japan & Region China Korea International 1% Operations 3% 3% 7% 7% 6% Europe 25% 25% 63% 65% North America Source: Quarterly MAT reported sales numbers Source: Reported sales numbers
Slide 9 Key Novo Nordisk diabetes care products remain broadly available in the US % unrestricted market access of key Novo Nordisk products in the US Unrestricted market access 100% Victoza NovoLog Levemir Value market share 80% Value market shares of key Novo Nordisk products in the US Victoza NovoLog Levemir 80% 60% 40% 20% 60% 40% 20% 0% Feb 2009 Apr 2014 Note: Unrestricted access excludes Prior Authorization, Step Edits and Other Restrictions; Insulin access figures limited to FlexPen. Numbers are an average of Medicare Part D and Managed Care Source: Access FingerTip Formulary, Apr 2014 0% Feb 2009 Note: Market shares: NovoLog =share of rapid acting insulin segment, Levemir =share of basal insulin segment, Victoza =share of GLP-1 segment Source: IMS monthly, Feb 2014 value figures Feb 2014
Slide 10 Tresiba roll-out continues with encouraging performance in countries with competitive reimbursement Tresiba value market share in basal insulin segment in selected markets Switzerland Mexico Japan India Sweden Denmark United Kingdom 20% 15% 10% 5% 0% 9% 3% 17% 10% 10% 1% 1% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Note: Limited IMS coverage in India Source: IMS Monthly value figures, Feb 2014 Months from launch Key launch observations Tresiba grows share of basal insulin market steadily in countries with reimbursement similar to insulin glargine Tresiba penetration remains modest in markets with restricted market access compared to insulin glargine Tresiba has been launched in 12 countries, most recently in Germany, Malta, Bangladesh and Lebanon 20 additional countries expected to launch Tresiba during 2014
Slide 11 Interim analysis of major adverse cardiovascular events in DEVOTE is now expected around mid-2015 7,500 people with type 2 diabetes currently on OADs or insulin 1 DEVOTE (EX1250-4080) trial design Tresiba (blinded vial) + standard of care Insulin glargine (blinded vial) + standard of care Comments Trial initiated in October 2013 The trial is recruiting people with type 2 diabetes that have existing, or high risk of, cardiovascular disease Recruitment is progressing ahead of plans Oct 2013 Interim analysis: Sufficient to rule out HR of 1.8 Mid-2015 3-5 years Final analysis: Sufficient to rule out HR of 1.3 1 Key inclusion criteria: Age 50 years at screening with established CV disease or chronic kidney disease or Age 60 years at screening with risk factors for CV disease. Treatment with one or more oral or injectable anti diabetic drug(s). Insulin naïve with HbA1c 7.0 and appropriate for insulin treatment or insulin treated with HbA1c 7.0 or HbA1c < 7.0 and current insulin treatment corresponding to at least 20IU of basal insulin. OAD: Oral Anti-Diabetic drug, HR: Hazard Ratio. Data to support a pre-specified interim analysis of major adverse cardiovascular events now expected mid-2015 (previously 2-3 years from trial initiation) Completion of the trial is now expected to be within 3-5 years from trial initiation (previously 4-6 years from trial initiation)
Slide 12 FDA and EMA publish joint safety assessment concluding on the safety of incretin-based therapies The FDA and EMA have explored multiple streams of data pertaining to a pancreatic safety signal associated with incretin-based drugs. Both agencies agree that assertions concerning a causal association between incretin-based drugs and pancreatitis or pancreatic cancer, as expressed recently in the scientific literature and in the media, are inconsistent with the current data. Source: NEJM 370;9, 27 February 2014
Slide 13 Financial results first three months of 2014 DKK million Q1 2014 Q1 2013 Change Sales 20,343 19,983 2% Gross profit 16,877 16,374 3% Gross margin 83.0% 81.9% Sales and distribution costs 5,086 5,530 (8%) Percentage of sales 25.0% 27.7% Research and development costs 3,168 2,657 19% Percentage of sales 15.6% 13.3% Administration costs 805 801 0% Percentage of sales 4.0% 4.0% Licence income and other operating income 215 176 22% Operating profit 8,033 7,562 6% Net financials 268 207 29% Profit before income tax 8,301 7,769 7% Tax 1,843 1,787 Effective tax rate 22.2% 23.0% Net profit 6,458 5,982 8% Diluted earnings per share (DKK) 2.43 2.20 10% Full-time equivalent employees 39,579 35,154 13%
Index (2 Jan 2013 = 100), non-hedged currencies Index (1 Jan 2013 = 100), hedged currencies Slide 14 Current rates for US dollar, Japanese yen and major nonhedged currencies are well below 2013 average 130 120 110 100 90 80 70 60 50 USD/DKK CNY/DKK JPY/DKK GBP/DKK CAD/DKK Hedged 2013 Currencies average 2014 average 2 Spot rate 2 Impact of a 5% move 3 Hedging (months) USD 1 562 548 540 1,300 12 CNY 1 91.3 90.6 86.4 220 11 4 JPY 1 5.77 5.26 5.27 145 13 GBP 1 878 902 907 75 11 CAD 1 545 503 490 60 11 130 120 110 100 90 80 70 60 50 RUB/DKK 1 2 3 4 2012 INR/DKK ARS/DKK BRL/DKK TRY/DKK 1 2 3 4 1 2013 2014 Non-hedged 2013 Currencies 5 average 2014 average 2 1) DKK per 100; 2) As of 28 April 2014; 3) Operating profit in DKK million per annum; 4) USD used as proxy; 5) Operating profit impact of one of the non-hedged currencies fluctuating 5% is in the range of DKK 15-30 million Spot rate 2 RUB 1 17.7 15.54 15.14 INR 1 9.64 8.84 8.84 ARS 1 1.03 0.72 0.72 BRL 1 262 232 244 TRY 1 296 247 254
Slide 15 Financial outlook for 2014 Sales growth - local currencies Sales growth - reported Operating profit growth - local currencies Operating profit growth -reported Net financials Effective tax rate Capital expenditure Depreciation, amortisation and impairment losses Free cash flow Expectations 1 May 2014 7-10% Around 4.5 percentage points lower Around 10% Around 7 percentage points lower Income of around DKK 850 million Around 22% Around DKK 4.0 billion Around DKK 2.9 billion Around DKK 25 billion Previous expectations 30 January 2014 8-11% Around 3.5 percentage points lower Around 10% Around 5.5 percentage points lower Income of around DKK 750 million Around 22% Around DKK 4.0 billion Around DKK 2.9 billion Around DKK 26 billion The financial outlook is based on an assumption of a continuation of the current business environment and given the current scope of business activities and has been prepared assuming that currency exchange rates remain at the level as of 28 April 2014.
Slide 16 Closing remarks Solid market performance > 10% annual diabetes care market growth driven by diabetes prevalence 27% market share in diabetes care and solid leadership position 47% insulin volume market share with leadership position across all regions 46% modern and new-generation insulin volume c market share 71% GLP-1 value market share and expanding leadership position Promising pipeline The only company with a full portfolio of novel insulin products GLP-1 portfolio offers expansion opportunity within type 1 and 2 diabetes Xultophy supports promising outlook for insulin and GLP-1 combination therapy Liraglutide 3 mg holds potential within the treatment of obesity Promising pipeline within biopharmaceuticals Note: Xultophy is the intended brand name for IDegLira Source: IMS MAT Feb 2014 value and volume figures
Slide 17 Investor contact information Share information Novo Nordisk s B shares are listed on the stock exchange in Copenhagen under the symbol NOVO B. Its ADRs are listed on the New York Stock Exchange under the symbol NVO. For further company information, visit Novo Nordisk on the internet at: novonordisk.com Upcoming events 13 Jun 2014 Investor and analyst event in connection with ADA 07 Aug 2014 Financial statement for the first six months of 2014 30 Oct 2014 Financial statement for the first nine months of 2014 30 Jan 2015 Financial statement for 2014 Investor Relations contacts Novo Nordisk A/S Investor Relations Novo Allé, DK2880 Bagsværd Kasper Roseeuw Poulsen +45 3079 4303 krop@novonordisk.com Jannick Lindegaard Denholt +45 3079 8519 jlis@novonordisk.com Lars Borup Jacobsen +45 3075 3479 lbpj@novonordisk.com Daniel Bohsen +45 3079 6376 dabo@novonordisk.com In North America: Frank Daniel Mersebach +1 609-235-8567 fdni@novonordisk.com