Novo Nordisk increased operating profit in Danish kroner by 57% in the first six months of 2015 to DKK 26.3 billion.
Sales in Region China increased by 25% (3% in local currencies).
Lars Rebien Sørensen, President and CEO: “We are satisfied with the results of the first six months of 2015, during which Victoza® and Levemir® continued to drive sales growth. In the second quarter, we have successfully launched NovoEight® and Saxenda® in the US and announced positive results from the first phase 3a trial for semaglutide, our once-weekly GLP-1 analogue.”
The company’s sales fell 6 percent in China to 2.2 billion Danish krone ($32 billion) in the second quarter compared to a year earlier, citing increased competition, a decline in diabetes growth, and distribution delays. Meanwhile, China sales for the first six months of 2015 increased by 25 percent in Danish krone, and 3 percent in local currencies.
Speaking to CNBC’s Novo Nordisk CEO Lars Rebien Sorensen said that China was showing a series of problems in the short-term: the country’s slowing economy was influencing authorities’ ability to pay for healthcare and the government’s anti-corruption drive was reducing the company’s access to local hospitals and doctors.
Competition had also increased as local manufacturers geared up production levels, and were being favoured in regional bidding opportunities.
China’s slowing economy did not deter the pharmaceutical giant Novo Nordisk from expanding its local sales efforts. Mr Sorenson spoke of seeing opportunities on the horizon.
“We’re investing in research, and in our manufacturing operations. We believe in the long term outlook in China.”
He explained there was reason for the world’s largest insulin maker to be upbeat on rather unfortunate health prospects for China’s citizens. Sorensen said the adoption of urban and westernized lifestyles are leading to many more of the country’s 1.3 billion-strong population developing diabetes.
“We were the first international company to establish R&D in China. We were also the first to establish modern insulin manufacturing in China,” he said.
“We hope to be seen over time as a Chinese company so that we can partake in the development of diabetes care in China.”
The gross margin improved by 2.2 percentage points in Danish kroner to 85.2% driven by a positive currency impact and product mix.
Operating profit increased by 57% in Danish kroner and by 30% in local currencies to DKK 26.3 billion. The net profit increased by 35% to DKK 18.2 billion. Diluted earnings per share increased by 38% to DKK 7.02. Adjusted for the partial divestment of NNIT, net profit and diluted earnings per share increased by 20% and 22% respectively.
For 2015, sales growth measured in local currencies is still expected to be 7-9%, whereas operating profit growth measured in local currencies is raised by two percentage points and now expected to be around 19%.