Welcome to the 2019 Capital Markets Day in Novo Nordisk. On behalf of all of us in Novo Nordisk, a very warm welcome. Thank you so much for coming. This is a very exciting time for Novo Nordisk. I can personally not recall a time where we've had a stronger portfolio than we have right now, leading to more launches than we've ever done as a company. I might be a bit biased, positively towards Novo Nordisk, but I think really we can claim that we have strong products in each and every category we compete in. We look forward to sharing that excitement with you all here today, and talk to how we look at our solid growth outlook.
I'm already getting into talking about the future, so I need to get this slide up and remind you that the future includes risks and uncertainties that might turn out to be different than what we treat here. Please study this slide carefully. I think most of you have seen it before. I'll start by introducing our corporate strategy. I'd like to start by our purpose, why we are here. At a time where the pharmaceutical industry is facing deteriorating reputation, it's really important that all of us stay sharp on what is our purpose, what is our contribution to society? Why are we here? For Novo Nordisk, it is to drive change to defeat diabetes and other serious chronic diseases. Our key contribution is to discover and develop innovative biologic medicines. That's what we do. That's our role as a pharmaceutical company. That's not enough.
When we talk about driving change, it is as much about securing that the healthcare systems we serve, the patients that are treated by our products, actually have an opportunity to have access to these products. In the disease areas where we have an opportunity of actually preventing people from getting the disease, we also have to be engaged in preventing obesity, preventing type two diabetes. That is fundamentally important. That is the Novo Nordisk way. That is the mindset of our founders. It is the mindset that we drive our business based on. Another key mindset is to build our business based on a set of core capabilities. Core capabilities where we can be the best or among the best in our industry. That's a strategic premise for how we run our business.
During the day, you'll hear both about how we live up to our social responsibility, how we become a sustainable company from a financial point of view, from a social point of view, and from an environmental point of view, but also how we continue to invest in our current capabilities, but also expanding our capability base, because that's what it takes to drive a sustainable company. I now introduce to you the four quadrants of our business. The first one is diabetes care. Our strategy is to strengthen our leadership in diabetes. As I just mentioned, we have the strongest portfolio ever in diabetes. We have a strong portfolio of insulins, we have a strong portfolio of GLP-1s, and we are now finally turning our market performance around. We are actually starting to gain market share, and we're turning around our GLP-1 performance.
We are also catching up and starting to lead in the markets where we have launched Ozempic. Very strong execution there. We believe we can continue to invest in innovation that can redefine how diabetes is treated. You will hear during today, not only how we are executing our commercial strategies, how we are starting to win against competition, but you will also hear about what are our aspirations for future innovation that can lead to improved care and potentially also disrupting how we treat diabetes. We also believe there are opportunities to leverage digital solutions to drive better outcomes. We believe in sustained solid growth in our diabetes business. Turning to obesity, this is a large opportunity for Novo Nordisk. It is still very early days. Many more are living with obesity than there are people who have diabetes. We have the leading product today.
We believe that by investing in building the market, by investing in continued innovation, we can unlock this market and make it a very significant contributor to long-term growth of Novo Nordisk. We have leading capabilities to do that. You'll also during today hear about how we're going to develop that market and what are our innovation aspirations for improving weight lowering even more than what we can do today. Very exciting opportunity. Also here, there are digital opportunities for complementing medicine in achieving the weight loss we aspire to. Our third priority is the biopharm area, where we believe we can develop a leading position. Again, we have a broad portfolio. We all know that we are facing competition on NovoSeven, which actually turns out to be more resilient that we had actually expected, and I think most had expected.
We can see that by leveraging our portfolio, we can actually complement what we're losing on NovoSeven. We talked for a couple of years about getting biopharm back to growth, and we are actually doing very well. We still believe there are opportunities, both by leveraging our in-house capabilities to continue to innovate in-house, and we're also looking at how can we complement that by external innovation. We also believe that we have a sustained opportunity to drive growth based on our biopharm business. We are trying to build a presence in all serious chronic diseases.
We have shown that we can end obesity by leveraging assets we have, leveraging knowledge we have, and we have the same view when we go into all serious chronic diseases, leveraging competencies, leveraging assets, knowledge we have, where we can actually make a meaningful play in all serious chronic diseases. You'll also during today hear about our aspirations for doing that. This is in all simplicity, our one-pager corporate strategy. I would now like to just take a moment to talk through our long-term financial targets. Based on our performance this year, based on our outlook for this year, we expect to meet our long-term financial targets by end of 2019.
We are today introducing a set of strategic aspirations for 2025 to replace those targets because we believe it actually takes a more comprehensive approach, a more comprehensive framework for us to articulate how we see the growth opportunities, how we're going to invest in achieving those. I'd like to underline that this change is not based on a view that we cannot achieve our targets. We are still comfortable about that. It's based on a view that it's a too narrow perspective to operate with a short list of financial metrics to actually explain how we look at our business. During today, we will be talking to this framework of strategic aspiration for 2025 in these four boxes. One about leading based on purpose and driving a sustainable business based on a set of distinct core capabilities.
One about driving innovation towards a high innovation bar in a set of focused therapeutic areas. One about making sure that we have strong commercial execution in all our therapy areas, in all our markets. One about what is our perspective on the financial outlook. You have to be a bit patient during today because we actually organized today to explain this in great detail to all of you, and I'll end up today by actually summarizing what are the specific aspirations. You'll get them throughout the day, but you get the overview at the end of the day. Please be patient and listen carefully to what we explain because this will be how we will be actually holding ourselves accountable towards our future solid growth, and we'll be reporting on progressing this quarter-over-quarter.
I would like to end by reflecting a bit on my priorities when I took over as CEO, which is approaching three years ago. I defined three priorities. The first one was that we needed to strengthen our commercial execution. We had a situation where we were losing market shares, and it was simply not acceptable for us to lose market shares with the portfolio we had and we have later developed and introduced to the market. We have spent a lot of time in our organization in turning around our focus in the commercial areas, changing our focus towards winning against competition, changing our focus towards winning market shares, not just delivering on the bottom line. We simply need to do better, and we need to win against competition.
You will have a great opportunity to listen to our commercial leaders during the day explain how we have done that, and there'll also be breakout sessions where you get to meet the regional heads in these national regions. I must say that I'm very proud about how the organization has responded to this challenge, and I'm very proud that we are today getting more out of portfolio than we've ever done, and we are gaining market shares, and that's across the business. The second priority was to increase our innovation bar. At a time where there's increasing competition in our markets, we need to make sure that we stay clinically differentiated in what we bring to the market. We need to dare to set the ambition bar high.
That's another change because if you have been doing new versions of existing mechanisms for many years, of course, there is a certain feel about that. If you have to raise the innovation bar, you need to accept taking more risks and moving to new mechanisms, new approaches, new technologies. I'm also very proud about how the R&D organization has responded to this, and we are looking at more new innovation than ever. It's actually not only in R&D, it's across the business. You have an opportunity to ask product supply questions later on. Also a lot of innovation being brought to product supply, increasing efficiencies, et cetera. Then the third priority was to evolve our culture. No revolution. We have a really, really strong culture in Novo Nordisk.
If you want to drive a more ambitious mindset in the commercial area, if you want to drive a mindset towards higher level of innovation in R&D, you need to adapt the culture to accommodate that. You need to reward and measure people in different ways. You need to allow for setting targets higher than is potentially possible to achieve them, to drive and unlock people. You need to accept that in R&D, it's okay to failure if you aspire to do something that's at a higher level, and then you learn from that, and you move closer to actually achieve it. I'm also very pleased on how the organization has responded to this. We're by no means done. This is an evolution, and we are working hard on that.
I just wanted to make sure you understand that we feel we are at a really great place in the development of Novo Nordisk, and we have made significant initiatives to make sure that we can execute strongly. I think the data documents that we're making good progress. That's my introduction. I'll now introduce to you the agenda throughout the day. You also have it on your name tags. We'll start out this morning by taking a deep dive into diabetes. I have a number of great colleagues here, Camilla, Mike, Mads, Henrik, and Doug, who will take us through both the commercial opportunity as well as what are our research and development priorities. That is followed by a Q&A session where you can ask questions to all of these individuals, including myself.
After the break, we take a deep dive into our great opportunity in obesity. That's again, Camilla, and it's Martin Lange, who is leading our global clinical development. Then we go into biopharm. That's Ludovic Helfgott, head of our biopharm area. It's Mads again. Followed by a Q&A where you can ask questions. After lunch, we start by diving into the markets. You will have first Doug Langa giving an update on the U.S. opportunity. Exciting times. Many launches. You'll have Mike actually talk a bit to the same, even more launches because there are more countries. Then there's an opportunity for you to get close to the regional heads, because we have invited all the regional heads.
Mads running Region Europe, Ole running Japan and Korea, Christine running China, Frederik running Africa, Asia, Middle East, Oceania. Then we have Andre running our Latin America operations. All demonstrating fantastic sales growth. We thought we could take them out of the market for a couple of days to get closer to you and share their experiences. After the regional updates, we dive into what we call emerging therapies. That's our research efforts. Here we have Mads again, and we have Marcus Schindler, who is leading our drug discovery activities. Very exciting read out on what is the long-term perspective on our growth drivers. We home in based on product supply and finance.
You might wonder why is product supply together with finance, but that's because Henrik is going to brag about how well he is doing in driving efficiencies and lowering unit cost, and Karsten is so happy about that message. They teamed up to do that together. I will wrap up, share with you what are these strategic aspirations for 2025 that we have defined, and we'll follow that by a Q&A session where the whole management team is available, and there we'll see Monique Carter, our head of people and operations, also available. That's the plan for today. We'll wrap it up with some networking and I'm not sure, there might be a bite and a glass of wine to mingle towards the end of the day. That's our plan, and I think we should get going.
I'm happy to welcome Camilla to stage and share with us our diabetes outlook and aspirations.
Thanks a lot, Lars. Good morning, everyone. We'll kick right on with diabetes. Diabetes is, of course, the reason for why this company was founded more than 96 years ago, and it is still the core of our business. It means that it is more than 80% of our sales. As you know, we are a leading company in diabetes care, and we're also very confident that you'll see a lot of insight into that today, that we can even evolve our leadership in the very near future. Before we get into our business strategies, I'd just like to remind everyone about the big unmet need that we see in diabetes care. If we start with people living with diabetes, you see that there is a tremendous burden on them.
They actually have a life expectancy that is eight years shorter than people not living with diabetes. We also know that 70% of them are dying from cardiovascular disease. Despite all of that, we also know that it's only 9% of them that are being treated with a glucose-lowering agent that actually has proven CV benefits. There is a lot of opportunities to do even better in diabetes care, and we will of course, get into that a little bit later during the sessions. When we just look at the numbers, you know that we just had new numbers released last week that shows you that there are 463 million people living with diabetes, many of them not even diagnosed. 183 million people are being treated, but you also see that only 29 million are being treated with products from Novo Nordisk.
Of those, 27 million are being treated with insulin, but yet just a very small fraction being treated with GLP-1. There is a big unmet need, both in terms of getting better care, but also a big unmet need in getting more people treated. That's the business that we are in to help all of these people. I'll just give you now a few projections as to what we expect that the growth will look like in this area. Here you see our expectations to the growth in terms of number of people being treated. The 183 million we just talked about now, we expect to grow with 4% annual growth rate towards 2025. As you also see, many of them are being treated with insulin, like we just saw on the other side as well.
When we then look at the value of this market, it is a DKK 48 billion market today or last year, and we expect that to grow with a compounded growth rate of approximately 3% towards 2025. If we take out the loss of exclusivity on the DPP-4 class, the underlying growth we expect to be around 4% in this market. You do see also that a big part of the growth is driven by a very big insulin business as a base, but the real growth is coming from the SGLT2 segment and the GLP-1 segment. That is, of course, where we are very strong and also expecting to be even stronger going forward. The dynamics in terms of this is what will drive a big part of our business, but also drive even better treatment and care for people living with diabetes.
Of course, as you know, the GLP-1s are able to address not only blood sugar, but also lower weight and also lower the cardiovascular risk profile. The combination of our business and achieving better glucose results and weight results and cardiovascular risk profile for people with type two diabetes really goes hand in hand. We do also expect a few key trends in this area. One is around the development of the GLP-1, especially in the oral part, that we can contribute to, and combination products in the area. This will also, to some extent, offset some of the biosimilar competition that we do expect to see in this field in the future. At the same time, we also, as Lars mentioned earlier, evolving our digital support tools to patients, both in the insulin segment, but potentially over time, also patient support programs in the GLP-1 segment.
That, of course, to give patients an even better control going forward. We know that many of them are not seeing the same results in real life as they have seen in clinical trials, and that, of course, we can support them on. I get back to that a little bit later. One thing that we should also expect is an evolving, we call it payer dynamics, meaning yet a pressure on healthcare systems to fund all of the medication in the diabetes area, but not just in diabetes, but also in many other therapy areas. Of course, it's important that we have good health economic results of the products that we put to market, just like we also have it for RYBELSUS, and we could talk to some of that a little bit later.
Access and affordability of medicine is also an issue that a company like ours, with a sustainable business approach, needs to take a look at. I just want to also confirm to you that as part of that, social responsibility is also core to our business. You can say that as a pharmaceutical business producing life-saving medicines, we have a special obligation to make sure that we bring our products to them. Innovation will always be important for us as a special contribution to society. We also understand that not all people are getting access to life-saving medication, and in some cases, also not to insulin. As part of our social responsibility, we also want to make sure that we address that access and affordability issue.
In many places, this is a bit different, so the issue is different in the U.S. than it is in India or in China, but it is important that it is part of our integrated business approach. As you see here, we already have a number of programs that are addressing this issue, and you should expect that you will see more of that also in the future. Finally, as a pharmaceutical company in diabetes, in a chronic disease setting, we also need to make sure that we help society rise to one of its biggest challenges, which is really the growing number of people with diabetes. We would also be addressing prevention. You see here some of the programs that we have worked with already. One of the bigger ones being Cities Changing Diabetes.
How can we help cities address the burden of diabetes, make cities more livable to address the diabetes problem? That, of course, is something that we are likely embarking on also in the future. You will see more programs from our side on this part. This, we are just sharing with you to make sure that you understand that our approach to the business is a sustainable business approach that also includes the social responsibility, but it actually also includes environmental responsibility. As you know, we have embarked on a new environmental strategy, Circular for Zero, that aims at getting us to zero environmental impact from operations and transport by 2030.
This is a new target that we are setting forward because at the beginning of next year, we will be reaching the first target we had set forward, which was to have zero CO2 emissions from our productions. That means all of our production sites are running on renewable energy, being it either wind energy, being solar energy, or being powered by water energy. That means that as of first quarter next year, we will have that fully in place. As part of Circular for Zero, we're also looking at our suppliers, making demands on our suppliers to also focus on environmental efforts. We are also, as I mentioned, looking at now how can we get other opportunities to reduce our carbon emissions in total. Finally, also looking at how can we do Circular for Zero thinking into our development of new products.
This, of course, is mainly the plastic challenge that we have in terms of many of our devices comes in plastic. Of course, over time, we need to find a way to make sure we get that back, or we find different ways to produce our products for the future so that we don't have a burden on the environment. With all of this, we expect to have a company over time that will have zero environmental impact. For us, all these three things go very nicely hand in hand, the financial responsibility, the social, and the environmental responsibility.
There are also a couple of other reasons why we are well set out to be able to expand our leadership in diabetes care, and I'll just show you some of the core capabilities and advantages that we have in this company that sets us out well to be able to increase our market share. The first one is about our ability to deliver protein-based treatments. You should expect that we'll go more into the oral development of this and also into the stem cell area, of course, and Mads will talk a little bit more to that later on. There is innovation to, of course, embark on in this area that we will deliver on. Large-scale production is also part of our capabilities. We're building new factories. You will hear about that later from Henrik.
This, of course, also means that we will be able to continue to work on efficiency parameters for the company as Lars was just referring to. On the global commercial reach, we have a very strong presence worldwide. We also have shown that with the launch of Ozempic very recently, we have on a global scale, been able to make this a blockbuster in a very short time, actually in a record time. Now, of course, we are embarking on the global rollout of RYBELSUS as the next thing we want to do, and our strong commercial reach will help us in that regard. Mike and Doug will talk more to that later. Finally, we have 96 years of disease understanding.
That does not mean we can solve the diabetes problem alone, but it does mean that we are able to embark on new innovations in the area to help patients also reach better outcomes. One of those is on the connected pens. Next year, we will be launching a new connected pen, NovoPen 6. Means that the data from the pen can be transferred to the doctor, and the doctor can have a dialogue with the patient. We have teamed up with big CGM providers, actually covering 99% of the continuous glucose monitoring market. Means that the data you can get from swiping the CGM, you can combine with the data from the insulin pen. Suddenly the doctor and the patient can have a dialogue about why is it that the blood sugar is going too low or too high.
That works in a setting like this, in a dialogue between the patient and the doctor. The results we have seen from this in our pilots actually means that we can reduce the missed injections because patients do actually miss injections, not because they want to, but because they just live a normal life, where we forget things. We can reduce the missed injections with 43% with a connected pen. That also means a 28% increase in the insulin dose. Even more importantly, it actually means that a person with diabetes can be in time, in range, two hours more during the day or the 24 hours. That means that they are likely to get an even better blood sugar control over time. This is an important innovation that we will be able to offer in NovoPen 6 as of next year.
With that, we feel we are well prepared to compete in the diabetes market and offer good solutions for patients. You see here the overview of the market. We have 68% of the market is being treated with oral tablets. That, of course, you also see the value of that is around 40% of the market. What you should keep in mind is that more than 50% of these people are not in good control. With the launch of RYBELSUS, we are actually able to make sure that many of these people can get in good control, and we will be positioning RYBELSUS as the best oral medication in this space. At the same time, you might also be wondering, how about Ozempic and Victoza, once daily and once weekly GLP-1? There is ample space for them also to be in the market.
We will position RYBELSUS as the best oral, and we will also position Ozempic as the first injectable and the preferred injectable in this space. There is an opportunity for us when you look at all the number of people not in good control to actually now be addressing the people who otherwise would have been prescribed an oral treatment, but a treatment that wouldn't get them into good control. Now we have the chance with RYBELSUS to do that. We have a strong insulin portfolio also. We will be able to gain further market share with our insulin portfolio and the new launches coming up, Tresiba, Levemir. Our focus on Tresiba and Xultophy is really where we're going to go on this. On mealtime insulin, you see also our opportunities to address that with especially Fiasp and the launches of Ryzodeg.
All in all, a very strong portfolio of products that are able to address unmet needs in diabetes even stronger in the future than it has been in the past. When we look at the DKK 48 billion market that we just talked about, we already now have a share of growth that is 34%, so slightly higher, six percentage point higher than our market share of 28% in the global diabetes market. With the unmet need that I just talked about and with our capabilities, with our launches coming up, especially in the GLP-1 segment and the growth of the segment, with our strong presence in insulin, and with, of course, the dynamics of the market that I showed you in the beginning, we do expect that we will be able to continue to gain share in this segment.
That means that our strategic aspiration in diabetes is to, by 2025, to gain market share of more than a third of this market. We are embarking on a strategic target for ourselves that says we are going to grow our diabetes market share from the 28% today to more than a third of the market by 2025. This of course, will be driven by the injectable franchise we have of GLP-1s and of insulins, but it will also be driven by the launch of RYBELSUS, that we are very excited to roll out in a number of markets, of course, starting with the U.S., and Doug is going to talk to that a little bit later. That's the summary of our diabetes care strategic aspirations, and now we will just talk to you through some of the elements of this.
We will start with insulin, we'll get into our pipeline, then we'll talk about GLP-1 also, and how we're doing efficiency gains in product supply. Let's start with the bigger part of our business, which is insulin, then when it comes to our turnover. To do that, I'd just like to invite my colleague Mike up here to say a few words about how we're going to do that.
Thank you, Camilla. 50% of our business, i.e. insulin. Some 10 decades ago, this company was founded on the discovery of insulin, today, lion's share of our patients are on insulin. This is part of our DNA. It's going to remain super important for us as we go forward. A couple of things on this slide. It shows that insulin, on the back of the price pressure in the U.S., has gone relatively lower as a part of our sales from 61% to 50%. That's the reality. During this period, we have gained DKK 5 billion worth of absolute sales and growth. We should not forget about that. The other thing I think is interesting about this slide shows that our dependency on the U.S. insulin pricing has gone down.
It used to be 27%, today it's 20%, or actually less, 19% of the corporate sales that's coming from U.S. insulin sales. If I was you, the exposure on all the things you're going to hear on pricing in the U.S. is reduced compared just a few years ago. That's, I think, good. Perhaps what's most interesting for me and what makes me quite proud and a little bit attached to the mindset change that my boss spoke to, is that we are gaining quite a bit of market share in this segment. We've gone from 40% market share to 44%. It's not easy. It's a very competitive market. Many people say it's commoditized, but yet we're able to win, and I think this is really interesting to see. Now, the dynamic on the two sides of the Atlantic are quite a bit different.
International operations has been gaining some five percentage point year-over-year, when you look at our business over the last five years. It's coming on the back of more or less flat pricing, a little bit declining, but flat pricing. Quite a bit of volume. Demographics play a big role in our sales in IO. Also the new generation insulins innovations are giving us a really good tailwind in this segment. The 5% comes from volumes and innovation. On the other side of Atlantic, U.S. specifically perhaps, it's a different story. A declining sales of about a percentage every year over the last five years. It is basically all pricing, as you can see. Flat volumes.
Even though they do extremely well with the innovation part, launching products like Tresiba and doing extremely well with it's not enough against the headwind of the prices that we have seen. Hats off to Doug and the team on the market share that they have been able to gain from 36 percentage points to 43. Again, in a very difficult competitive market, we're gaining share. When you put this together in terms of us versus the market, the market is growing around two-three percentage points, and we're doing better, three-four. Now the market is stabilized, the last point at 2%, and we are at three percentage points, as you can see. As you see from our share of growth being above our market share, it gives me confident that we will continue to win market share.
The dark blue line remains so much above the red, we should be able to gain market share and grow faster than the market. That's what we plan to do. We're gaining most of our growth, some 76% of it, from the new generation insulins. No surprise. That is basically all the products that was just talked upon. When you look at the share of growth, historically, 70% of that has been coming from international operations and 30% from U.S. Which again, I have to say, is pretty good knowing that U.S. is home to only 11% of the patients. They've been giving us 30% of the growth. So far, so good. As we basically go forward, I think we need to take a look at insulin in different segments to make a little bit of sense of all of this.
We have 11 million patients that wake up every single day and take human insulin at an extremely affordable price of 2 DKK per day. It's an extremely competitive market. More than 40 players are playing in there, and we're holding on to our market share at half of the world's market, close to 50% of this market. Very affordable. It's part of our societal responsibility and will remain there for them with this offering. Modern insulin is where we're getting some value upgrade. At 8 DKK per day, we have majority of our patients that are taking insulin, 15 million to be exact, on insulin analogs. It's a place where we have lost some market share more recently as more and more players have come, especially with biosimilar glargines. Five companies now competing in there.
We're trying to hold on tight, and the market is more or less flat. Where we're getting majority of our growth is where we have the least number of patients right now. The new generation insulin is 2 million patients, a market that's growing at 35%. We're gaining 5% market share. Yes, the prices are of course substantially larger of those than in human insulin at 18 DKK. Putting all of this in the context of our competitors and the market, if you take the clock back to just a few years ago and put the index at 100, then you see we've done 14 percentage points better than our competitors in this segment, in all three segments, actually. Regardless if you look on this side or that side of Atlantic, we've done better than the competitors.
In the U.S., our competitors have gone down by some 26 percentage points. The market's declining. We have gone down as well, only 15%. In the rest of the world, international operations, the market is growing, we're growing even faster than the market. It's a nice picture, I think, for our insulin and why I get quite a bit optimistic about the future of insulin. We can survive the future only if we can innovate and provide access to those innovations. Simple as that. Our most innovative products, Tresiba, today has 89% global access. 23% of that came more recently as we launched into some of the larger European markets, as we got the product into the National Drug List of China. We are now at 89%, which is a really good access rate. We should be able to do well with that.
Xultophy, 69%, equally exciting. Many of our European markets are actually having Xultophy as their main growth driver today. We have more recently launched it in Japan, and it's doing extremely well. We have a lot of hopes as we bring this into the rest of the emerging markets. Ryzodeg, yes, access looks lower than the other two products, but that's simply because Ryzodeg is meant for large premix markets. One of those is China. China got the first patient on Ryzodeg the day before yesterday. We will launch the product full-fledged basically in a couple of weeks from now. Hopefully soon, when the National Reimbursement Drug List opens up again in China, we will come and demonstrate the benefits of Ryzodeg, and you'll see that bar phenomenally grow afterwards. Really exciting for Ryzodeg.
Fiasp, take a look how much access we just have gained the last two years. Now equaling to Xultophy, 69% access for Fiasp. Again, a very key product for us, be it in Europe, North America, or where have you. If this continues, I can put my neck out and say that the next generation insulin volumes will triple until 2025. The value will go up by more than 2.5 percentage points. Majority of that growth will come from international operations, 93% to be exact, and 7% will be coming from North America. The trick is really to innovate, and innovate, and provide access to that innovation. Who can better speak about innovation than our Chief Innovative Officer?
Thank you, Mike. Thank you for being promoted to the CIO. That's the first time. We as a company have always served the patients. We are patient-centered, we're innovation-centered for about 100 years. What does that mean in terms of where we are heading on the diabetes R&D strategy? It means that in addition to the notion that more than 50% are not in good control, we need to make safer and even more efficacious blood glucose-lowering agents. As you can also see, and as alluded to by Camilla, we have this devastating situation that people die from cardiovascular disease. A lot of them still, way too many, develop diabetic kidney disease, diabetic eye disease, and even diabetic nerve disease.
We want to be there for the patients, and that means that a couple of years ago we revised the R&D strategy within diabetes to focus essentially not only on safe and effective A1C lowering, but also on the ability to deal with the complications and comorbidities of the small and big blood vessels that are the problem in diabetes. If we look a little bit at what that means aspiration-wise, it means we want to normalize the life of people suffering from diabetes. Let me give you three examples of where that will take us 10 years from now in the marketplace. One, in type one diabetes, we will have a curative therapy out there, a cell replacement therapy that alleviates and eliminates the need for insulin therapy in people with type one diabetes.
In type two diabetes, we will make sure that all the renal and cardiovascular body weight and A1C and other benefits, maybe even on the brain, that are associated with the GLP-1 therapy, that the norm for treating all of these is a simple once-daily tablet. The version of all GLP-1 from Novo Nordisk that will be the prevailing one 10 years from now will make needles and injectors old-fashioned to the benefit of the patients. The third thing I'd like to mention is that in type one and type two diabetes, there's a huge, as alluded to by Mike Doustdar, a huge need for insulin still, and it's not going to go away. The problem with insulin is the frequent injections, including the blood glucose monitoring, the fear of weight gain and hypoglycemia that holds back the A1C achievements.
We intend to have on the market 10 years from now a glucose-sensitive insulin that allows for therapy target achievement in up to 100% of all patients without the risk of hypoglycemia and no need for frequent blood glucose monitorings. Those are the kind of things that Novo Nordisk seeks to have in the market 10 years from now. What does that mean in terms of the innovation cycles that I always talk about? It means, on the one hand, that we had to can a great number of insulin projects back a couple of years ago because commoditization was happening, prices were coming down.
What is really happening today is that we are trending up a new innovation cycle, one where it's possible to make glucose-sensitive insulins with comorbidity benefits, and even things that render insulin irrelevant, such as stem cell-based replacement therapies, such as immunological intervention in recent-onset type one diabetes. I'll talk a little bit about that over the next couple of slides. Pipeline-wise, we are in a situation where our immunological agent, a benign immune modulator called anti-IL-21, in conjunction with the beta cell nursing GLP-1 agonist, liraglutide, has completed phase II for recent onset type 1 diabetes intervention to preserve the beta cells' ability to still secrete insulin even after disease onset.
We look at the insulin side of things, we are in the midst of phase II with a first-in-class, once-weekly insulin analog called LAI287 that is freely and easily combinable and mixable with a best-in-class, once-weekly GLP-1 agonist known as semaglutide. That is undergoing multiple dosing studies in co-formulation such that we are able to deliver into phase III as soon as possible both of these products, LAI287, and also you can say a once-weekly super Xultophy, the LAI-Sema molecule. We move further down, we have in phase I the insulin 965 that I will show you on the next slide. In pre-clinical, entering the clinic next year will be the first ever glucose-sensitive insulin, and thereafter will follow the cell replacement therapy with stem cell-derived beta cells, hopefully before the 100-year anniversary of the discovery of insulin.
Let's take a quick look at the once-weekly insulin LAI 287. This is like going from daily to weekly, but we've already been up against the gold standard insulin, namely insulin degludec, in early studies in the clinic. They suggest that we are able to deliver to patients the same low degree of peak to valley fluctuation and day-to-day variability, even within a week, as is the case for a best-in-class once-daily insulin. This we hope to take into phase III as soon as possible, reporting clinical data during the first half of next year and entering then thereafter, pending those data, together with semaglutide and also as a standalone first-in-class therapy.
The insulin 965, internally called FSI, is an insulin that actually, in addition to best-in-class once-daily glucose lowering, offers other metabolic benefits to the body that imply that micro and macrovascular complications of diabetes may be catered for just by the simple use of a once-daily insulin. That delivers data during the first half of next year. Moving into immune intervention, this is the first time ever we're showing these data. They are from phase II.
It shows that in patients who have recent onset type one diabetes, the combination of the Novo Nordisk GLP-1 receptor agonist with the immunosuppressant that safely tapers or levels down the autoimmune attack on the beta cells, we see a significant protection on beta cell secretion of insulin as measured by C-peptide, such that only 10% is lost in the first year where treatment is ongoing, as opposed to 40% in those who receive placebo. Moving on to efforts within the cure of type one diabetes, here are some data from mice. We are right now scaling up our beta cell-derived cell transplantation technology for people with type one diabetes. But these are proof of concept data in mice, where you basically inject the beta cells under the renal capsule. And what you can see is that at the point where this happens, the diabetic animals become basically normalized.
These differentiation protocols we have worked on for more than 20 years, and one of its proponents, our ex-CEO, is present, I can see today. Here we are actually heading, hopefully, into the clinic, as I mentioned before, the advent of the centenarian anniversary of insulin. It's not all about insulin, but I have to say we are more excited than ever about this pipeline. I'm also equally excited about this one. This is GLP-1 therapy. This is the decay of the beta cell function over time in people with type two diabetes. Today it is so that normally GLP-1 is the first injectable, is the go-to injectable. We would like to see it become placed all the way very early upstreams in the treatment cascade by use of a once-daily, simple to administer RYBELSUS tablet. We have gotten the U.S. approval.
I will not take you through the label. You all know it. It's administered in people with tablets, in people with injectables, in people with kidney disease. It even improves health in people with kidney disease, unlike most other agents. It has shown A1C and/or body weight lowering that is superior to each of the best-in-class drugs in the SGLT2, DPP-4, and once-daily GLP-1 agonist classes. It is safe, as all other GLP-1s have shown to be, and even numerically reduces the amount of MACE events from 76 to 61 in the PIONEER 6 program, as indicated also in the label. You would have thought that we're getting way up on the innovation cycle vis-à-vis GLP-1 based therapies. I would put to you that we are, but still a lot is going to happen.
If I click one more time, you will see that RYBELSUS is perhaps only the end of the beginning of innovation within this sphere. What I mean by that is that if we want a further efficacy boost, we are going to take into man very soon a co-formulation between semaglutide with all the package and label benefits of that molecule over time as it grows the label, so to speak, and combine that with a once weekly human GLP molecule in the right fixed ratio that we are now assessing in the phase I clinical trials, such that we get it just right, both tolerability-wise, but also efficacy-wise into the future. Oral semaglutide will also be updated.
There's a unique collaboration between our product supply colleagues and the CMC colleagues in R&D to constantly upgrade the formulation technology, the ability to deliver either higher doses and/or higher bioavailabilities of oral GLP-1 therapies, and that you'll hear much more about in the next many years to come. Also, it is interesting that we actually have other oral delivery technologies, including those that are co-created together with the MIT Institute in Boston and have been published in premier journals such as "Science" and "Nature." This can be developed for peptides like GLP-1, but also for large proteins all the way up to the size of the factor VIII molecule. Of course, we want to use GLP-1 in other indications. This also means, though, that going all in on semaglutide in many indications calls for more patients to be treated.
We're going to triple the amount of patients within a matter of two years, such that we will go to between 40 and 50 thousand patient years within the next two years. How on earth can we do that without tripling the clinical cost? We can do that because our colleagues in global development, because our colleagues in the clinical, medical, and regulatory centers all over the world are working smarter, faster, using digitalization, optimizing which investigator sites to use, and so on and so forth. The marginal cost increase is not negligible, Karsten, but it is something that we can handle within the realm of the R&D budgets. This is just a quick snapshot of all the trials. I am not going to give you a detail of all of those.
Suffice to say that semaglutide is now being tested in hard endpoint outcome trials on the eyes, on the kidneys, on the heart. In some studies as RYBELSUS, in some studies as Ozempic. We have a strategy of bridging between the two, so when one gets a label, the other one gets the same label. Early next year, two readouts, in particular one readout in Alzheimer's disease, will make us make decisions as to whether or not to progress into pivotal trials within dementia. actually, I think that was what we're doing in R&D, and Henrik.
Yeah.
Who else than you? Can you deliver all the products at high quality and decent cost that we need to supply our patients?
You know the answer to that, Mads. Good morning. The collaboration between R&D and product supply is a fantastic collaboration, but I have to tell you about a headache. Five years ago when we started, yeah, we have talked about it for a long time, but five years ago, we sort of moved closer to reality, RYBELSUS. To be honest, coming from a highly optimized manufacturing unit, this was a huge headache to us, at least on a rainy day. On a sunny day, it was a really exciting challenge that we wanted to take upon us. Basically, the last five years, this has turned into a fantastic story. You will hear about it later today. I'd just like to show you the biggest investment that we have ever made in Novo Nordisk history. It's basically four times up our biggest investments.
The price of this beauty is two and a half million U.S. dollars. Billion, sorry, billion. It's billions. It's two and a half billion U.S. dollars, and it's located where we already have production in Clayton in North Carolina. There have, until recently, been 3,000 construction workers working on the site. We have dragged in construction workers for all over the state and actually also the neighbor state. Much that actually the local politicians, they actually told us about it when they came to visit. Now we are down on that manning because it means that we are soon moving into operations. I'm going there in 14 days from now, and we are going to move into the offices, and we are going to empty the first bucket out of the spray dryer. It's really, really exciting times.
Here is the latest overview of the site. Basically, those of you that has been to Kalundborg, this is the little sister of our Kalundborg site here in Denmark. We are going to put it into our operations very soon. It is highly exciting. As the price of it is two and a half billion U.S. dollars, then you need to work with unit costs. A good thing about this journey the last five years has been, as we made the decision not to build on top of what we already have here in Denmark, we have been able to work with optimizations both together with R&D, but also within the production area in Denmark.
In parallel tracks, we have optimized the process here in Denmark, and while we are building in U.S., we have transferred those optimizations into the U.S. side. Basically, as the PIONEER studies were concluded, and we got the fantastic results out of that, and we have increased our ambitions within RYBELSUS and also all the oral semaglutide products, then we can illustrate it this way: that basically, we think that based on the same footprint, based on the same plans that we laid out five years ago, we are at least three to four times up the design capacity already now. We will continue this. I will not promise everything today, but we will continue this journey. We are not done with optimizations yet.
We think that the footprint that we have made will hold a lot of potential for the future, and we can mix what we can do in Kalundborg and in Denmark with what we can do in the U.S. We can mix that in many ways from a capacity point of view. Now both Mads and I are ready. The question is, U.S., can you sell some of it?
I think we can. There's nothing more exciting, Henrik, than you showing drone videos, so thank you. It's always exciting. That was hard to follow, actually. Thank you for that. I don't have a drone video. What I do want to talk to you about is GLP-1. Mike talked about this opportunity we have to continue to innovate in insulin, and that is important. It's part of our history. It's part of our future. What is really exciting, what I'm thrilled about is GLP-1. I have to say, I don't think there is a single company today that is better positioned to be successful at GLP-1. I say that with confidence because of our portfolio and because of our capabilities. Is there an opportunity? Camilla touched on a little bit of this, but let me give you the specifics.
Today, only 7% of patients on type 2 diabetes medications are treated with a GLP-1. 7%. If you think about the recent guideline changes, EASD, the ADA, suggesting earlier use, suggesting a broader use, still only 7% today. To put that into perspective in the U.S., of the roughly 24 million patients that are treated, only 1.6 million are treated on a GLP-1. There is an enormous business opportunity for us. There's also, and Camilla mentioned this, an enormous patient unmet need. 50% of those patients that are treated with an OAD are not in good control. Think about the cost and the expense for that. Unbelievable opportunity and certainly a patient unmet need.
If we think about the growth of this market and what's been happening, if we go back to 2007 all the way through to 2019 this year, we've seen a growth rate of 25% over that period. That's exceptional growth. What's important to note with that growth, it's been event-driven. What does that mean? We can take a look at this. This is event-driven from our own Victoza launch, daily products, then weekly products. We're also seeing label updates. That was our own CV label update with LEADER. Guideline updates, as I mentioned. Lastly, Ozempic. What we've seen around the globe is with events that correlates the continued growth, and we anticipate that continuing. If we take a look at really the globe and the market, we will see regional differences.
I think one of the things you'll hear today from Mike and others is we have a market fit approach. What that means is we have a broad portfolio within GLP-1, and we can position that portfolio for the regional differences or these market events around the globe. For example, in China, we launched Victoza in 2011, but it did not receive national reimbursement until 2018. We see a slower uptake. We also see markets in EMEA and LATAM. These are markets that are very diverse. These are markets that don't have national coverage. These are markets that, in a lot of ways, are out-of-pocket markets, and so we see a slower uptake. Maybe markets that you'll hear a lot in the regional breakouts, but not as early to adopt. We also know we have mature markets.
We have mature markets in Europe, U.S., and you can see the adoption there. Our market fit approach actually works for the regional differences around the globe and understanding those differences and how we can support our portfolio within it. Coming in this morning, I was asked about where are these products sourced from. That's always a question, where do they come from? You can see that. Let me step back one second before I get to the sourcing. It is important. Ozempic, the last market event that I talked about. Ozempic, where we have launched. This slide represents the U.S. and the European countries where it is launched. Again, that was that last market event. I talk about these market events and what they do to the overall growth of the category.
For Ozempic, where it has launched, we know that it has changed the slope of the curve for our overall GLP-1 business. In the U.S., you can see that the business was declining with the growth and the launch of Ozempic, and Camilla talked to this. This has been seen, and we're very proud of one of the best launches that we've had in reaching a milestone of blockbuster status, but also NBRx leadership, total GLP-1 leadership. We can see we changed the slope of the curve with this market event in the U.S., and the same could be said in Europe. To the sourcing that I was referencing, because it was a question I walked in this morning, where are these patients coming from? This also gives us some pause, but also some opportunity.
When you look at the largest portion of the sourcing comes outside of GLP-1. Actually, you can argue that a lot of it is in the earlier use. The use is after some sort of failure. What we know and what the guidelines now tell us is that GLP-1 should be used earlier in the treatment algorithm. We have the support of the EASD and ADA. When you look at the right side of the screen and where it is used in terms of line of treatment, it is rarely used in the first or second line position. There is a tremendous opportunity for us to get it used earlier in the treatment.
What better product do we have right now to get over one of the biggest hurdles and barriers, which is of the injection barrier, and getting an opportunity to use a GLP-1 earlier in treatment than RYBELSUS? This is the world's first and only oral GLP-1. Mads, you may suggest that it was the last 10 years in the making. We could argue it was the last 100 years in the making. This is a product that we've seen that has a clinical profile that is like a GLP-1, is a GLP-1, in the administration of a pill. We can tell you that in the early experience that we've had, not only through the trials with physicians, but what we've seen just in the first couple of weeks in the U.S., physicians are extremely excited about this profile.
This is a profile that the market access community can be excited about. It's the profile of the community with physicians that are prescribing it, that can be excited about, as well as patients. Just a couple of weeks ago at Novo Nordisk in the U.S., we had the opportunity to interview a patient that participated in the clinical PIONEER trial. This was his experience, but he came to talk to the company, and what he described was a product that actually changed his life. Changed his life and his family's life. What an incredible opportunity that we have. What we know, and this slide represents on the left, the U.S. from 2018 to 2019, 2 million patients switched medications because, again, a big reason for that is not being in good control. Where do those patients go?
What we know is only 22% of them go to a GLP-1. Again, we have a unique opportunity to get GLP-1 in both the oral and the injectable used earlier and more often. It's a unique opportunity that we have. Again, Camilla touched on this, but the positioning, we can coexist, and we will coexist with two products. They have the first preferred oral agent in RYBELSUS and the preferred first injectable in Ozempic. As I talked about, we do have a market fit strategy, and I referenced China. Victoza is still a product that in many, many markets, it's a very important product to us and will continue to be a very important product to us. This is a product that, again, that we have a market fit approach. We also know, and which is alluded to, we're an innovative company.
In an affiliate like the U.S., we also know that we have two innovative products in RYBELSUS and Ozempic that we are already positioning in that first oral and first injectable position. It is a unique opportunity. 7% of the patients, this unmet need, and we have a portfolio that is unrivaled. Just in closing this segment, again, I think it's very, very important that there is an unmet need within diabetes, and there is no company that's better positioned than Novo Nordisk. None. You heard these from Camilla and mentioned by Lars, but we do have this further ambition to raise this innovation bar. It's who we are. Certainly, within diabetes, we are looking to drive the outcomes beyond HbA1c. That is important. We can and will strengthen our leadership position, and again, the aim is to have more market share.
A third Well, excuse me, is to have a global market share of more than a third. Lastly, and I would emphatically state within GLP-1, and certainly from a global perspective in the U.S., we are the best company right now positioned with our portfolio and our capabilities, and with a market that is calling for that and guidelines to support it to be successful. It's really a great time and an exciting time. With that, I'm going to close this section, and I think we're going to go to Q&A. Lars, you're going to.
All the presenters, I'll kindly ask you to come up here, and we'll do a Q&A. Thank you, Doug.
Yep.
The way it works is that now it's about diabetes. I know you might have a lot of exciting questions, let's focus on diabetes.
I would like you to limit yourself to one question, because then we create room for many questions. Michael. There will be a microphone coming around. If you start by stating your name and your organization, and then your question, please.
Michael Novod from Nordea Markets. It's about the diabetes title, the sema slide. Maybe it's not fully related to diabetes, sorry about that. I just saw it was with sema, also in Alzheimer's. We know there's a liraglutide trial ongoing in Alzheimer's, the ELAD trial, but you already list now sema in Alzheimer's. Do you have any insights already now to that this can be taken forward already during next year with sema?
Since we do not have an Alzheimer's session yet, I think we'll allow that to sneak into the diabetes session, Mads.
Yes. Well, Michael, very good question. The reason why I put it up there is not that Novo Nordisk is doing a phase II trial, it's that Professor Paul Edison at the Hammersmith Hospital Imperial College London is doing one, and so are others, by the way. We have a hunch, based on what we have investigated both in disease registries, outcomes databases from our own trials, and so on, that GLP-1, being a neurotransmitter, being an anti-inflammatory agent, working on things that remain a bit unknown, could be microglia, could be other distinct neurons even, might actually be neuroprotective in one way or the other. What we are saying is that in the event that Paul and his team come up with exciting data, with all the endpoints they have in these relatively recent-onset Alzheimer's patients, that could cater for a move towards larger scale dementia/Alzheimer's trials.
I think the unmet need is so big that when you talk to the FDA, EMA, and others, there is much more of a willingness to accept an academically conducted proof of concept trial, even though this does not live up to the classic industry standards. The unmet need is just so big.
Thank you, Mads.
Hi. Thanks. Richard Vosser from JP Morgan. You talked about the sustainability and trying to remove plastic. Maybe you could talk about that in the context of maybe bringing insulin oral. Does LAI287 make that closer? When should we think about oral insulin coming? Thanks.
Thank you, Richard. I think that's a question to Mads. We started out aiming for oral insulin. It turned out to be oral GLP-1, so still an opportunity.
Yes. Actually, to be very pedantic, we started out looking both for oral insulin and oral GLP-1. We did prove the concept in human beings. We published in The Lancet, the phase II proof of concept study with insulin analog called OI338GT. That proved the concept of oral insulin with a safe and efficacious profile. The trick was, of course, that despite Henrik's humongous improvements in commercial production, then at that point in time, this could not be made commercially viable. We are going three years back now. Where we stand is that we have access to unique technologies that we've co-created together with the Bob Langer group of MIT in Boston, such as the SOMA device, such as the LUMI device. You can look them up in the literature or in the scientific journals. There are options there.
There are also options, as you will recall, the study we did was done with an enhancer molecule called GIPET, sodium caprate. We are revisiting what are options for oral insulin. I cannot promise you we'll have that on the market 10 years from now. We have proof of concept, and things are technology-wise evolving and efficiency-wise as well.
We've not given up yet. We move over here. Yeah. In the back. Peter?
Hi, it's Peter from Handelsbanken. I have a couple of questions. I'll just stick to one now. One thing that struck me with the ICER review, was sort of the cost of occasional value coming from diabetes products. Much of these are sort of the value or cost of treat comorbidities or comes from the comorbidities where chronic kidney disease, stroke, MI, et cetera, they stand for a large portion of the so-called benefits/cost here, where the sort of the microvascular complications are very small. That suggests, all else equal, that sort of the value attributed to pure blood glucose lowering is sort of commoditized here. That fits into your perspectives about treating comorbidities. How should we think about diabetes in the future? Is it treating low blood or lowering blood sugar, or will it increasingly based on treating the comorbidities?
How should we think about your products in the future? Will they be blood glucose-lowering products, or will they be a combination of both? How will you combine? Will it be combination products, single stand-alone products, et cetera? Thank you.
I think that was a question to Mads. I think as Mads actually talked to it in the presentation, though, obviously, it is about lowering HbA1c, we see that treatment guidelines now including cardiovascular disease and as science documents that are additional benefits and additional indications that can be treated, those will become more and more required to play and also be required to differentiate products. Still, a patient comes into the physician office, and it's about initially treating the glucose level, and then you'll opt to also have a preference for products that does more. I don't know, Mads, do you or Camilla, do you have additional points compared to what we presented already?
Just one quick comment. You said the license to operate is safe and efficacious A1c lowering. A1c is a surrogate for microvascular disease, so there is baked value into the A1c calculations on the microvascular side, but not on the macrovascular. Cardiovascular, you every time have to prove the point because there's so many factors that play into CVD.
Yeah. In the back.
Thank you. Carsten from SEB. The first of your new strategic aspirations here is very closely related to sustainability. When you read some of the industry reports on sustainability from some of the larger specialized houses, they tend to use U.S. pricing as a reason to give you a lower score or to at least lower the score. I was wondering if I could get your view on whether being a sustainability champion, can that go hand in hand with the raising U.S. list prices in the future?
I'll refer to Doug. Just an intro comment. A lot of the discussions about U.S. pricing completely lack insight into what is the price. Doug, can you share a bit how you look at pricing across channels and-
Yeah, absolutely.
I'd first start by saying that the prices in the U.S., we have some of the lowest prices in the world, if you look at channels like Medicaid 340B, even the government channel in Medicare. We also have higher prices in commercial. We really, when I talk market fit, we approach the market per the channels that we play in, and there are some of the lowest prices in the world. I'd also say that from an affordability standpoint, we're very proud of, and I'll talk to you a little later today, the affordability initiatives that we have. In the U.S., whether patients are inside the system or outside the system, meaning insurance or not insurance, we also try to help.
I won't comment on list price increases, when and if we take them, but I would say that we have some of the highest and lowest prices in the world, and we do a lot around affordability for those inside and outside the system.
Two weeks back, Doug and I were actually in Houston visiting some of our partners in Cities Changing Diabetes, and we visited some of the local community hospitals. I was very impressed to see that when you actually get to that level in the U.S., there's actually a very well-functioning healthcare system. Seen from outside, seems like the health system is broken. When you get into the ground, you see that there's integrated care being delivered by the local cities. When you ask them about what are the insulins you're using, they're using our insulins, and they get them at penny pricing, the 340B program, or they use our Patient Assistance Program. It works, and they were really, really happy about that we partnered with them, and we actually provided very affordable insulin for those patients they treated.
It's a very complex story, but we should not shy away from what we actually do, which I think we should be really proud about. Well, maybe going here, but I think you can get closer to people so we don't have to walk around with the microphones.
Thanks. Pete Verdult with Citi . Just for Camilla. I know you don't want to go there in terms of a hard number, but it seems to me that everything you're saying in terms of the strategy for diabetes care, would it be fair to say that the minimum expectation for Novo is that you grow that top line for diabetes care around 6%-7%? Is that a fair interpretation of what you've been saying.
That's right. We don't comment on that. You know that.
I can talk to some of the building blocks to it, though, without commenting on what you're saying. Of course, what I showed you was that we do expect that the market will grow 3%, and if you take the DPP-4 loss of exclusivity out, 4% in terms of value. The building blocks of that is, of course, the GLP-1 will grow significantly. When you look at the bars, you can see that that's where the real increase is. Our position in GLP-1, based on what you've heard this morning, is already very strong and is likely to get even stronger going forward. On top of that, we have a very strong position in insulin. That is the biggest part of the base. Here we are also likely to increase our market share.
When all that sums up to something that is more than a third of our total value share of diabetes, then I think you're smart enough to make out the numbers that fit to that at some point.
Good. Thank you, Camilla. Over here.
Martin Parkhøi at Danske Bank. Just come back to your aspiration of at least 1/3 market share by 2025. I can see that this is, of course, for the whole organization, that you're much more focused now on market share development than profits. Will this demand a higher investment in sales and marketing to drive this market share? Will this be a changed balance between North America and international operations? Will the market share gains we will see from now on, will these be as profitable as the market shares you already have?
We will later on have a financial section where we go through the ratios. I'll say it's not that we believe it becomes more expensive to run our business. Of course, what drives our cost structure is the number of launches we do. At a time where we launch more products and generate the platform for future growth, of course we invest more in that. It's not that we believe that it becomes, in general, more expensive to run our business from a sales marketing perspective. I'll make a mental note to make sure that we address it later on, because Karsten has a full presentation on how we expect our ratios develop across the different cost items. We'll cover it later on. Let's go in the back here.
It's Keyur Parekh from Goldman Sachs. Doug, you showed us this really insightful, helpful chart on kind of the 2 million patients changing medication every year in the U.S. and where the kind of different medications are used, first-line, second-line, third-line. Would love to hear kind of Camilla, Doug, and Mike, your thoughts on if we were to look at that chart in 12 months, 24 months and 36 months, where do you think RYBELSUS would end up in front-line, second-line, third-line? What would your aspirations be for that?
Camilla, perspectives on source of business for RYBELSUS.
Yes. We clearly would like to position RYBELSUS as the best OAD in the market. I think based on the clinical trials you've seen, the PIONEER trials, RYBELSUS clearly has the potential to make a huge difference in that segment. It is actually interesting to see today that even Ozempic is also being used, as you saw the numbers from Doug. It's already being used, of course, in combination with insulin, but also after simple OAD failure. When we talk to physicians about working both with Ozempic and RYBELSUS, it's clear that there are some patients that are not being moved on to better therapies because of the injection hurdle with GLP-1. That, of course, we are able now to address with RYBELSUS. That is clearly where we would like to position this product.
Maybe just to add, in that slide represented 40% of the patients went to an SGLT2 and a DPP-4, and that's a perfect spot for us to position RYBELSUS. We would anticipate that whether through an injection barrier or just a better clinical profile, we should be able to position it, and we'll position that year earlier.
Good. Thank you. Here at the front table.
Thank you. Mark Purcell from Morgan Stanley. Could you help us understand your strategy when it comes to the incretin axis more generally, and combinations with sema and an oral sema? I'm talking about GIP and glucagon, which other companies think is an important part to combine with a GLP-1 activity. Does technology exist to do co-formulations of RYBELSUS with other categories such as SGLT2s, which are start and go LOE in 2025 onwards?
Thank you. Mads?
Yeah.
Future combination.
There are two ways to go. Combination formulations where you take two distinct moieties and combine them in either an oral or injectable version. Of course, hybrid molecules that are either co-agonist, triple agonist or agonist, antagonist, whatever you want. We have a dual agonist GLP-1/glucagon, as you know, in trials. We have a triple agonist GLP-1/glucagon/GIP in trials. They will read out in the months to come. I think you should add to the incretin story, amylin. I always talk about amylin, because the fact is that what you really want is more bang for the buck, whether it be on A1C or secondarily an A1C driven by more weight loss. Right now we are putting a lot of emphasis on the amylin GLP-1 combination, whether it be as a fixed ratio combo or even potentially as hybrid molecules.
When that is said, the glucagon, we are investigating it, hopes were extremely high. They've come a little bit down vis-à-vis at least some of the companies having terminated their activities and only one company recently progressing their activities. Let's wait and see with our data. I think this is the way to go because you cannot do more than semaglutide does with a GLP-1 alone therapy. But maybe you can either prime the effect, like with GIP and get more bang for the buck, in some way we need to understand better, or you can add to the effect by a whole different mechanism, like with amylin and other methods. It's too early to predict the future, but I think we need to be there, and that's why you're seeing a multitude of approaches from our side.
Thank you, Mads. We take a question here at the front and then we'll go back afterwards.
Jain, Bank of America. Just a big picture question on GLP-1 growth rate going forward. You've put up a chart showing it at 25% over the last few years. I think that was greater than what you'd assumed in your prior financial targets at low double digit, I think you quoted in the prior slide. Clearly exceeded expectations. You've also outlined the size of the addressable opportunities. How do I think about that growth rate going forward? Do you think this existing growth rate can be maintained on a larger and larger base? Do you think the absolute add rate is roughly the same per year, so the growth rate sort of fades? How do I think about that conceptually going forward? Thanks.
We don't guide in detail per se product area, but Camilla has some perspectives on building blocks.
Yeah, I would say that of course the GLP-1 segment is likely to keep growing. I think you should expect that over time the growth rate of course will be challenged by the fact that the base is bigger and bigger. I think the way as to which this will evolve, of course depends on our speed in terms of rolling out the RYBELSUS globally and also the introduction with Ozempic. We're already well on the way with that. We're not, as Lars said, giving specific guidance onto the size of the.
It's a bigger base-
Yeah
It will be harder and harder to sustain that growth level.
Can I add something to it?
Yeah.
Even though I think it's bigger base, Doug showed a geographical picture of how still in many geographies as a percentage of diabetes, we have GLP-1 in a very low single digit numbers. At least in my part of the world, I'm hopeful that we can continue.
Maybe one other point to that is, remember it was event driven, so there's another event and that's RYBELSUS. Again, to Mike's point, and with the addition of a product.
Good. Go to the back.
Yeah.
Hello. Marco Sormani, Varenne Capital Partners. I have a question concerning pricing environment in GLP-1. For the time being it's very positive, very benign, but what we can expect after the Victoza patent expiration in 2023, and maybe some new biosimilar products entering the market. Thank you.
If you look at the GLP-1 space today, as Doug explained, the market's developing based on events. It's the level of differentiation, it's the clinical data, it's the new molecules that drive the growth. As such, it's the market growth and it's the share gain that drives the value of that market. As products are differentiated, you have less of the competition that you see from the insulin area. Obviously our strategy is to move patients to Ozempic and RYBELSUS. We believe there'll be less left of Victoza at the time of patent expiration. There'll be, based on the stay time on a GLP-1, there'll be a flow of patients where they move to more efficacious products, and patients will increasingly prescribe the innovative product, the differentiated products.
We believe that obviously there'll be people that will try to launch a biosimilar version of Victoza, but it'll be a different dynamics than what we see in the insulin category because of the underlying differentiation of products in the GLP-1 category. We are comfortable about moving patients to more and more efficacious medicines and drive that innovation. Question here.
Thank you very much. Wimal Kapadia from Bernstein. I know you showed a lot of global data, but if we just take the U.S., 40% of the volumes are metformin, around 13% are the branded orals, SGLT2s, DPP4s. You still have around 12%, 13%, 14% on these TZDs, SUs. Will that number be zero in 2025? Just tied to this, you suggest that 50% of patients on OADs are not well controlled. What is that number for the SGLT2s and DPP4s? What I am really trying to get is a sense of what volume share within the oral market is RYBELSUS able to potentially capture. Thank you.
I think you're asking a lot of details about our competitors' products that we might not have the best insights to. Maybe, Mads, some comparative efficacy data when you look across the categories as a proxy for how well patients are treated.
Yes. Basically, if you look at the literature, which I know you've done, most of the comparative studies have been ongoing for either 26 or 52 weeks. The average GP will put a person onto an SGLT2 inhibitor or a DPP-4 inhibitor, typically with an A1C, actually, in most countries, around seven. That will take maybe 40% of the patients below seven for a brief period in time, and then they will tick upwards. The most rapidly upwards ticking that we're seeing, both in clinical trials and I think in the real world, is probably sulfonylureas because they basically burn out the beta cell, and then followed a little bit by the DPP-4s, but that's more because of the overall A1C lowering is on the modest side.
Thank you, Mads. We'll take a question over here.
Thank you. It is Mike Leuchten from UBS. Question for Mike. Given the sheer scale of the RYBELSUS launch in Europe and elsewhere, does that work with your fit to market strategy? Or do you need to deviate from that a little bit to get the effort done before you can come back to it?
Yeah. The positioning of the product will be similar typically everywhere, and Camilla alluded to where we plan to position it. As we have the PIONEER data, of course, we have to go with the label. We have to wait and see where the various different labels look like. We are now waiting for, of course, Europe and Japan, soon after that, the rest of the emerging markets. Based on that, we'll be able to see to what extent are there going to be differences. There's also affordability issues that are quite different from one market to the other in international operations. Some places have that out-of-pocket, other places we'll try to, of course, get it insured as we've done so with the other injectable GLP-1s.
I would say it's too early for me to make more detailed comment on it, as I have not seen the label, as I have not seen the details.
Good. One final quick question before we break.
Good morning. Florent Cespedes from Société Générale . My question is a bit of a follow-up of this one. I would like to know if you could share with us your view of the ramp-up of the adoption of RYBELSUS in Europe, given the fact that you won't have the large outcome trial set for years, and how you will compete against some oral products which cost nothing, and also some oral drugs which have already demonstrated a cardiovascular benefit. Thank you.
Should I get that?
Yeah.
First, I think, again, we need to get the approval in Europe. We are extremely excited that, and I will show this, I think, after lunch, we're planning at least internally to have some 30 launches of RYBELSUS over the next couple of years. That's our internal plans. Having said this, I think quite often when we speak to Europe, we think it's a country. It's not. It's a continent with multiples of different healthcare systems, with multiples of different affordability, and we've been able to actually see that as we have launched more recently Ozempic in that market. I'm quite hopeful that we will have RYBELSUS penetrated in most of the European markets, perhaps one after the other, and I'll be able to, again, give you more details once I've seen the label and the approval first.
Good. With that, we break for coffee and we'll be around. Those who did not get a question in, you can probably still try to catch us if you are fast. We break for coffee. Good job.
What's the hardest part of living with obesity?
The feeling that I'm being judged, whatever I choose to eat.
That nagging sense that I'm an embarrassment to my kids.
Stares and people who stare.
The look of dread on every passenger next to an empty seat.
That first glance that tells me I failed the interview.
What's the hardest part of living with obesity?
The feeling that I'm being judged, whatever I choose to eat.
That nagging sense that I'm an embarrassment to my kids.
Stares and people who stare.
The look of dread on every passenger next to an empty seat.
That first glance that tells me I failed the interview before it's even started.
Knowing that I just don't fit in, to the seats or life in general.
Wondering if I'll ever feel comfortable on a beach.
The fear that I won't be around to meet any grandchildren.
Actually, the hardest part of living with obesity is people thinking that I brought it on myself.
I wish everyone understood.
It is so much more than eat less and move more.
Obesity is a complex disease.
Not a life choice.
Let's help change attitudes.
Let's lose the weight of stigma.
All right. Welcome back from the break, now we are ready to move into talk about obesity. I will start out with that, I also want to introduce my colleague, Martin Lange, who will support me later on, who is heading up our global development efforts. In obesity care, we are, of course, working on a number of dimensions, but really to strengthen the treatment options that you will hear about later, but also we want to work on the market development of obesity because this is a serious disease that in many places has not even been recognized as a disease yet. If we look at the burden, many of you know this, 650 million people living with obesity. 120 million children are living with obesity. I think that number might be new to many of us.
That is a significant burden also for their life expectancy, their probabilities of getting other serious chronic diseases such as diabetes, cardiovascular disease, some types of cancer in the long run. This is a serious issue, and it's also a serious burden on the healthcare system. You see here DKK trillions being mentioned, and that's because we already know that the cost of related complications to obesity is a significant impact on the healthcare system. What I would like to talk about today is how we are going to change obesity as a cornerstone of our corporate strategy, but also to support people living with obesity, and also to support healthcare systems being able to long-term afford this dimension. Initially, we will talk a little bit about prevention, because also in obesity, we are working on preventional efforts.
One might say, "What does that mean for your ability to be able to treat?" I think you can also see with the numbers here, that cannot only be solved with treatment. We will come back to better treatment later in the session. There are also efforts that we need to do to make sure that we support healthcare systems in preventing this. Today, we have announced a partnership with UNICEF, and UNICEF is a three-year partnership that focuses on preventing obesity in children. This partnership is really going to take place in Latin America, because that's where the prevalence of obesity in children is especially high. On a worldwide level, the prevalence of obesity in children between five and 19 years old is approximately 18%.
In some countries in South America, where we will start this project, the prevalence is even beyond 30%. This is a significant burden to those children, their families, but also the healthcare systems. We are very proud that we can launch an initiative like this together with UNICEF to build awareness about obesity in children. Of course, this project has the potential to be expanded when we have learned how do we actually prevent obesity in children. That's part of the purpose of this project. In addition to prevention, we are of course also working on recognizing this stigma that people with obesity are living with, but also on improving our care. That's what we will be talking about in this presentation. Our mission is to make sure that obesity is recognized as a healthcare priority and as a disease.
Once that happens, that we have sufficient treatment solutions in place that can really address obesity. Today, you know the market of anti-obesity medication is around 15 million patients. That means 15 million people are living with this disease. That means that they have complications of it. That means that they're exposed to stigma on an everyday basis. We do expect that by 2025, and sorry, I forgot to say that the blue dot you see here is the number of people that we are able to treat so far with our anti-obesity medication, Saxenda. In the future, 2025, we expect that there will be 24 million people living with obesity. We also expect to be able to increase our share of that, mainly primarily because of the innovations that we are going to bring to the market.
The global prevalence you see on this chart, it is rising, it is in many countries of this world above 20%. There are also places where it's even worse than that. The global epidemic of obesity is very real. Saxenda, our obesity product, has been launched in 45 countries. We expect to roll it out in even more countries towards 2022, as you can see. With that, we hope to help and address some of the prevalence. Obesity treatment like Saxenda has actually, for us, grown very significantly over time. You see here the growth rates year to date, 50%, is now 5% of our total turnover, is also 30% of our share of growth year to date. It has a significant impact on our business, hopefully an even more significant impact on the people that are living with obesity.
We also expect that we can expand our leadership in this place in the future. Our strategic aspiration with obesity is to double our sales by 2025. This will be one of the strategic aspirations that you will see at the end of the day in our obesity business. We know that there's a big need for this, and we will just talk you through how we are going to drive, of course, the care towards people with obesity, but also on how we will be able to double our sales by 2025. There are many hurdles before people with obesity can be treated. You see some of them here. First of all, healthcare systems do not even recognize that obesity is a disease. People go to see the doctor, but often very late.
We know that sometimes it takes an average up to seven years before a person with obesity realizes, "Maybe I should see the doctor," before the person dares to go and speak to the doctor. Often, such a person is sent back and just told to exercise some more and eat less. Of course, many of these people have already done that. They've tried everything that they could. They have a discipline like no one else. We know it from people within our own company also, that it requires a lot of discipline to live with obesity. There's also the issue that physicians have not been educated in medical school necessarily about how obesity works, what's the right treatment. There is, of course, also the willingness to pay for the treatment that we have to address.
Based on all of this, we have identified four areas that we want to work with within obesity, and you see those here. I'll just go through them one by one. Starts with the patients, how we can support the patients with better care. Then we are looking at how we can support prescribers with more information. We are also looking at how we can support payers and policymakers to understand where should they start, because obesity is such a big impact on the healthcare systems. Of course, some of them are concerned if I recognize obesity as a disease, it means that a third of the population in my country has a chronic disease, and I need to treat that. That seems a bit overwhelming. How do we deal with the evidence of how to treat?
Let me just go through some of these things. Where you see we can support patients is on adherence. Right now, the stay time with Saxenda is four to five months. That is, of course, not very long. We have seen from studies when we combine Saxenda with SaxendaCare, and we combine it with other behavioral modification programs like Noom, like you see here, we are actually able to increase the stay time at the adherence with 33%. It means that behavioral modification in obesity, along with weight loss products, actually gives an even longer stay time, and with that, an even stronger ability to lose weight. When we look at the physicians we are supporting and the building of obesity clinics and advancement of care in more than 500 clinics over this period of time towards 2022.
It means that hopefully we can do our part to also support in terms of education of what it takes to treat obesity. Finally, of course, we're working with a number of international organizations that are looking at how can we improve care in this area and what does it take. I talked about payers and policymakers just before. To try and address some of the common challenges across countries, we have established what we call the Obesity Policy Engagement Network. It really consists of policymakers from different countries. Right now, nine countries. It's U.S., U.K., Germany and so on. Some of the big countries that are looking to discuss amongst themselves what is it that can drive down the cost of obesity in my country? What is it? How do I get started on this?
It's a way for us to offer a network for them to discuss this. We're also working on the Treat and Reduce Obesity Act in the U.S., and that, of course, if approved, that would mean that we would be able to also get treatment into Medicare, which is of course also an opportunity for many more people to get help to be treated for their obesity. Finally, we are doing bigger landmark studies, the SELECT study with 17,500 patients that Martin will talk to in a little while, that can map out what happens to people with obesity, what is their cardiovascular risk profile, and this study has been kicked off. At the same time, we are also looking to get the results of our phase III data from semaglutide in obesity during the coming year.
That, of course, will also be able to provide us with evidence as to what can be done. Right now, Saxenda is able to reduce weight with 6%-8% approximately. We do expect, and Martin will talk to that semaglutide in obesity can do even more, and that is just this first and the second generation, but there is still more to come. To support payers, we are also working with outcome-based contracts and risk-based contracts. That means that we are willing to share some of the risk of people being treated with Saxenda and not all receive the same weight loss. If there's not a minimum weight loss, there is an opportunity for us to agree with payers that then they are not paying for that product for that particular patient.
There's a lot of opportunities to document cost effectiveness and also the outcome-based data. Before I hand over to Martin, I just want to summarize that we are really here to strengthen our leadership in this area. We are here to support patients, and with that, we expect that we can develop and double our current sales towards 2025 from now. At the same time, we also have to improve disease awareness. You saw some of the measures that we are doing, but we are also supporting patients with digital tools in this area. Then of course the anti-obesity medication usage, the stigma, the prescriber focus is something that we will be working on. Then finally, individualized treatment solutions.
That is really what we like to talk a little bit more to now, so that you can see some of the clinical data that we have in obesity. To do that, I'd like to welcome Martin Lange, our head of clinical development.
Thank you very much, Camilla. As you've heard from Camilla, obesity is a serious chronic disease affecting an increasing number of people, basically to the proportion of an epidemic status. It's not only associated with social stigmata, as Camilla described, but it's also associated with a large number of comorbidities. Some of the greater culprits in this setting, such as diabetes, such as cardiovascular disease, osteoarthritis, are not only affecting and impairing the everyday life of a patient, but it's also severely affecting the outcomes. Further to that, we also know that obesity, and more importantly, the comorbidities, and there was a question to that also to diabetes in the Q&A session. This is really, really relevant. These things are posing a huge burden on society from an economic perspective.
Much so that OECD, in a recent report, is estimating that as much as 8% of healthcare expenditure will go towards obesity, and chiefly towards the obesity-related comorbidities in the years to come across the OECD countries. Specifically in U.S., that number is 14%. This is serious business. It is potentially crippling from a societal perspective and definitely from a patient perspective. Now, the good news is, obviously, that there's light in all of this. We do know already now that a modest decrease in body weight of 5%-10% is associated with a beginning decrease in risk of associated comorbidities. At the very least, we can see an improvement in the risk factors or the biomarkers of these comorbidities, and that's obviously the aspiration for all of us to then translate that to a direct decrease in comorbidities and a better outlook for the patient.
As Camilla already alluded to, we have Saxenda on the market. It's a successful drug. It is starting to serve the patients and breaking the curve, but it is by no means enough. We do need to work towards normalization in terms of really, really breaking the curve, but also serving our patients. We also know what normalization potentially looks like. We have seen in recent years the advent of bariatric surgery, truly efficacious in terms of lowering body weight to the tune of up to 45%, and also associated with a dramatic improvement in downright patient outcomes, decreasing the comorbidities I just discussed. However, bariatric surgery is very invasive. It's associated with a great number of side effects. It's expensive, and it requires a specialist treatment, and therefore it is currently reserved for the select few and obviously not really targeting 650 million patients across the globe.
Our aspiration, therefore, has to be through medical treatment, through supporting patients, through prevention of diabetes, to close the gap from what we can currently achieve with what is on the market to what could be a medically induced body weight loss comparable to that of bariatric surgery. That's also speaking into Lars' statement of us in R&D raising the innovation bar. We do intend to raise the innovation bar, and obviously we've created, as usual, an innovation curve. The end goal in that innovation curve is obviously normalization of body weight and normalization of the internal set point in the body to secure that these patients actually can lead a normal life. Just like the aspiration that Mads alluded to for diabetes. Right now, we are in the beginning of the innovation curve. We have Saxenda on the market.
The next steps will be various level of further body weight decrease, starting with the potential of semaglutide at approximately 15%. I will come back to that. Also going beyond semaglutide, trying to reach the bariatric surgery levels of above 20, potentially up to 30%. That would be really, really mind-blowing, not only for us, but hopefully also changing the lives of our patients. In our innovation curves, we also are defining that we need to become more patient specific, more patient centric. We need to focus on personalized medicine, optimizing both safety but also efficacy for the individual patients. We are specifically conducting our development programs in order to further inform ourselves in how to do that. Some of you have also asked about all the available drugs in the setting, it goes without saying that this is a focus for us.
We need to make all the available drugs for these patients. Next step on the innovation curve, most of you have seen this graph before, is semaglutide. We've conducted a fairly large scale, approximately 1,000 patients, phase II trial. One-year duration comparing semaglutide to not only placebo, but also to Saxenda 3.0 mg being the gold standard of today. Demonstrating that with the highest dose of semaglutide, we could not only achieve a 16% body weight loss, but more importantly, two-thirds of the patients actually achieved more than 10% body weight loss. Again, making this a dramatic new achievement in the management of obesity. I'm a little biased, and I'm being told I'm bragging a little bit. We also achieved an 80% retention in the clinical trial.
This is important because in the context of conducting clinical trials in obesity, we normally see retention rates of 40%-50%. This provides challenges in terms of scientific integrity, but it also provides challenges in terms of regulatory interaction and how to get the good data into the label. With 80% completion, which is also our aspiration for our phase III trials, we do expect to have high scientific integrity and good regulatory interactions. It's also a comforting number in terms of with the highest dose, having 80% still on treatment at end of trial after one year of treatment. This is indicating that semaglutide is not only safe, but also tolerable to the patients. They actually do want to stay on this drug. With those data, we initiated a large-scale phase III program.
It is currently planned for at least eight studies, six of which have already been initiated. We call it the STEP programme. The first four studies will serve for regulatory submission in U.S. and Europe. They are all placebo-controlled studies comparing 2.4 mg of semaglutide to placebo in a controlled setting. All of them are by chance 68 weeks. The first study, called STEP 1, is basically the pivotal study. Almost 2,000 patients randomized to either placebo or semaglutide for a period of 68 weeks. Just demonstrating the safety, obviously, but also the efficacy in terms of body weight lowering for semaglutide. Very similar in design, but different patient population. STEP 2 is looking at patients with type two diabetes, also suffering from obesity.
In addition to having a placebo control arm in this study, we are also comparing to our conventional diabetes dose, namely 1.0 mg, allowing us to compare not only to a placebo, but also to the diabetes dose in this setting. That, for us, will be very, very informative. In STEP 3, we look at maximizing the weight loss. On the background of intensive behavioral therapy, patients will be randomized either to placebo or to semaglutide. This study design will allow us to not only evaluate what is the maximum we can get out of semaglutide on the background of intensive behavioral therapy, what can we really achieve for these patients? It also puts semaglutide to the test, because it allows us to show what semaglutide can do on top of intensive behavioral therapy.
We have seen in other contexts that if patients are intensively treated in terms of behavioral therapy, the effect of pharmaceutical therapy is waning off a little bit. We do not expect to see that for semaglutide. In STEP 4, we are looking at maintenance. Patients will be run in for 20 weeks on semaglutide, and subsequently randomized to either placebo or continued semaglutide treatment. This will allow us to look at the maintenance of the weight loss of semaglutide. We will again be looking at the weight loss from treatment initiation to end of trial, but also allow ourselves to look at the placebo-controlled effect on the top of an already accrued weight loss for the first 20 weeks. All of these studies will read out mid next year.
We will write them up, do a fast regulatory submission in 2021, aiming for a launch of semaglutide for obesity in 2022. Currently, we have two additional studies ongoing. One is called STEP 5, looking at the sustainability of weight loss in semaglutide. This is a two-year study, so substantially longer than the previous four studies. STEP 6 is conducted primarily in Eastern Asia, with a regulatory purpose focusing on primarily Japan and South Korea. STEP 7 will be China focused, to be initiated very, very soon. STEP 8 is directly comparing Saxenda 3.0 mg to semaglutide. As we already discussed, obesity is associated with not only cardiovascular morbidity, but also mortality. This we know. We also know that the STEP program serves very, very well, both for regulatory but also for pay purposes, to demonstrate the weight-lowering potential of semaglutide.
We also, and I really, really like the question, I think it was from Peter, we also know and have the ambition to show the potential for semaglutide in terms of reducing the risk of comorbidities. This, at the end of the day, in addition to the actual weight loss, is what really matters, not only for the patient but also for society. To this end, as Camilla alluded to, we've initiated, at least in my world, a very large-scale outcomes trial, 17,500 patients. It's the largest study Novo Nordisk ever conducted. It will recruit over this year and into next year, and we are currently at almost 10,000 patients, so we will get there in due time. The study is event-driven, and it is expected to read out no later than 2024.
The interesting thing here is not only that SELECT will serve for cardiovascular purposes, it will also serve to look at other comorbidities as secondary endpoints. We'll be looking at kidney disease, we'll be looking at osteoarthritis in order to further inform us in this setting. I also want to be a little bold. Camilla called it a landmark study. I want to draw a parallel to type two diabetes 25 years ago. In that setting, I went to medical school at that point in time. I just went back to read my old textbook. Type two diabetes was rarely or barely defined as a disease. It was called non- insulin-dependent diabetes mellitus. Very few treatments available, absolutely no innovation in the space. Most of the patients were suffering from really, really severe comorbidities because they virtually received no treatment.
Came UKPDS, demonstrated the impact of intensified treatment on patient outcomes, changing the landscape, establishing type two diabetes as a severe chronic disease, generating new innovation, and bringing more medicines to market. Our intention with SELECT is the same. We do want to show the importance of optimized weight management in this setting, and look at the impact on comorbidities in this setting, aiming at changing the dynamics for obesity and patients with obesity. It doesn't stop there. We have a really, really exciting pipeline. Again, I'm biased, so I would say industry-leading pipeline in the area of obesity. Already discussed Saxenda and semaglutide, and Mads alluded to amylin that is currently in phase II. We also have a very, very strong and exciting phase I pipeline. We know that from a pathophysiological perspective, obesity is a multifactorial disease.
We need to be able to target many different areas of that disease in order to achieve the full potential of weight loss. We also know that actually from bariatric surgery, we may not reach that goal with a monotherapy. We can achieve up to 15% of weight loss with semaglutide, but if we had to go beyond that, we likely had to combine different modes of actions. Our phase I programs are clearly dedicated towards that. We want to change that dynamic. Really exciting. Our phase II study and all of our phase I study will read out within the next 12 months. A lot of interesting stuff going to happening there and a lot of big decisions for us.
With the end goal of closing the gap to a bariatric surgery, really achieving the 30% weight lowering that we know that we can see with these drugs. Just one word about amylin. Currently in phase II, has the potential to be combined with semaglutide, really achieving substantial weight loss. This is our phase I, multiple dose. In a period of 56 days, we saw a 6% weight loss in this setting. This is comparable to the weight loss that we see for semaglutide. Really efficacious, really dramatic. In and of itself, comparable to semaglutide. Together with semaglutide, two different modes of actions. We have a potential to achieve, maybe already in that combination, the aspiration of getting closer to bariatric surgery. To sum up, as Camilla said, we aim to at least double our current sales by 2025.
We want to be part of changing the concept of obesity. We want to change the perception, and we want to make obesity a healthcare priority. In order to support that from an R&D perspective, obviously, we need to develop the strongest possible portfolio of superior treatment solutions. Today, I only had time to show you our clinical assets. My good friend Marcus Schindler has a plethora of assets in preclinical that we look very much forward to receiving for clinical testing. We want to ensure that more people with obesity receive treatment and get improved outcomes. With that, I'm very, very happy to invite Ludovic Helfgott to the stage to talk about our biopharm portfolio.
Thank you very much, Martin. Thank you. Good. That's the moment you've all been waiting for, biopharm. Joke aside, I'm super happy. I'm delighted to be with you today in front of you, to talk about biopharm and to talk about to what extent biopharm can and will contribute to the long-term strategic intent that Lars shared with you this morning. My name is Ludovic Helfgott. I joined the Lars management team seven months ago now as head of biopharm, after more than 15 years spent with another Scandinavian-originated pharma company, also working in the metabolic space. I would like to share with you today thoughts on how biopharm will secure a leading position by leveraging its full portfolio, and that's very important, and expanding into adjacent areas.
While I was thinking about how to share that story with you, I was trying to look for the best starting point. Actually, I believe that the best starting point for this is the performance of biopharm, because the performance of biopharm over the past few months actually tells a lot about what's behind the curtain. This performance has positively surprised you over the past few quarters, and love to spend a bit of time on that. Traditional disclaimers, let's go now to the performance. As you might have observed over the first nine months of 2019, biopharm actually returned to growth. It returned to growth and actually grew 4% first nine months versus last year, after already a performance in 2018 that was around -1%.
What's interesting in this 4% performance is the fact that it actually affects both portfolios, both the hemophilia portfolio and the endocrine portfolio. As you can see, from a pure growth rate, the hemophilia portfolio, our current hemophilia portfolio, is actually growing 5% in the first nine months of 2019 through, of course, NovoSeven, through NovoEight, through Refixia, as well as other products in the portfolio. The same picture can be seen in the growth hormone franchise through Norditropin, where you can see that our overall franchise is growing 2% in the first nine months of the year, and our market share is actually stable, above 30%, between 32%-33% in terms of value across the globe. The portfolio is growing across both growth hormone and hemophilia. It's also interesting to observe that it's growing across the existing products as well as the new products.
We've launched Refixia a few months ago, a year ago. We are seeing already the first good signs of Esperoct. I'm going to talk about that in a minute. It's also interesting to observe that the portfolio, the overall biopharm portfolio, is growing in IO 6% in the first nine months of the year, but also in the U.S. 1% in the first nine months. It's growing across regions, across products, and across franchise. That in itself tells a lot on how we believe and why we believe the biopharm portfolio and business, it can actually really contribute well to Novo Nordisk. Let's go behind the curtain and let's try to understand what are the, let's say, the members, or I'd rather say the building blocks or building bricks, I should say, because I'm learning my Danes. It's all about building bricks in this country.
Building bricks of biopharm. I think the first building block or building brick is this: is the fact that actually biopharm as a portfolio. In the mind of most observers, biopharm is about Norditropin and NovoSeven. Actually, no. Biopharm is, of course, about NovoSeven and Norditropin, but it is also about NovoEight, NovoThirteen, Refixia and Esperoct, recently launched. We launched Esperoct in Europe over the past nine weeks now. Just to give you a bit of flavor around that, we already have, in eight weeks, I think, more than 24 patients on Esperoct, which is far more than what we thought in the first place. But even more interestingly, only six of them are actually coming from the NovoEight franchise. Which means that all the others, the 18 others, are actually coming from competition.
In a market that is supposed to be a me-too market, you can actually see that good products actually have all the reasons to believe in their good performance. The second element of this portfolio perspective is that beyond the products, we also have a great set of devices. As you can see, the change of Norditropin SimpleXx to the FlexPro, to NordiLet to NordiFlex, are actually each time an opportunity to bring new devices to patients, to physicians, that make their treatment easier than by the past. The last element of this portfolio, for me, is what we've discussed, and we continue to discuss, over the past few hours, is the launches. Is this launch culture. We have more. We've already launched Refixia in 15 markets. We're going to launch again in 15 markets over the next three years.
Esperoct start in two, Germany and Switzerland, 25 over the next two years. Norditropin, 16, and yet another 30. This launch culture is part of the DNA of biopharm. It's a portfolio, not just two brands. Second building block is, I believe, the characteristics, the features of a real specialty care business. By this, I mean the ability to have a very focused and expert healthcare professional base. We're not going through dozens of thousands of physicians. We're really focused on limiting the number of hospitals and physicians. We have super skilled medical reps, super skilled medical teams, that helps us to really connect well with the clinical practices in the market, far better than we believe many of our competitors. Deep scientific knowledge and history in both hemophilia and growth hormone.
Maybe for me, the one element that I really believe will help us, has helped us a lot and will help us even more, is this culture of life cycle management. In most primary care worlds, that I know from my past, the first indication launch corresponds to anything between 70%-75% of the overall value of your drug on the lifetime of your drug. In this sort of super specialty care, the first indication will be something around 15%, 20%, and will then continuously bring to the market new indications, new devices, sometimes big, sometimes small, that will fundamentally enlarge your portfolio. I want to give two examples of that. The first one is the Noonan indication we got for our Norditropin in Japan. As you can see, Noonan was launched, I think it was 18 months, maybe two years ago in Japan.
From a pure, let's say, epidemiology, the first sense was that we would get anything between 180-200 patients. We actually got, after a year and a half, more than 330 patients affected with Noonan in Japan. This, of course, brings a new opportunity to, of course, help patients, but get more contact with the clinical base. It's exactly the same on NovoSeven, where, of course, we have, and we know that we have, by definition, a stronger competition going ahead. In the meantime, we've launched the acquired hemophilia franchise. In the meantime, we are really focusing a lot of efforts on the breakthrough bleeds, on processes treatments. In the meantime, we're also reinforcing our views, especially in some of our markets on the Glanzmann diseases.
This ability to compensate the competitive tension on one side with, on the other side, new indications, is the counter note. A few weeks ago, just a few weeks ago, more than 23 years after the launch of NovoSeven, yet a new indication was approved in Europe around using bolus pump infusion, which is clinically something that physicians have been asking us for the past five years. Still 23 years after the launch in Europe. That's part of our DNA. This ability to come systematically with new indications. That, for me, is why this engine is so powerful. First building block, a real portfolio. Second building block, a real culture of specialty care. The third building block is maybe a direction to go.
On this one, I would like to spend a bit of time taking a step back on the field that we've been exploring so far. On the left-hand side of your chart in front of you have the hemophilia market value. The market as it is roughly today, DKK 17 billion globally. We believe, if you look at the external perspective, a growth towards DKK 95 billion over the next, let's say, eight years, which is a moderate CAGR of 2%-3%. On the right-hand side, growth hormone. Smaller numbers, but fundamentally the same logic. Moving from DKK 21 billion today to DKK 29 billion over the next six years. Again, the market. If you are in this place, and we are in this place, of course there's a bit of growth. We should, of course, make sure that we get that growth in.
The point is that if you're really aiming at a larger growth and a larger space capture, you then need to take a step back. If you're taking a step back, then suddenly the picture changes a little bit. You can observe that if you move from the hemophilia to the broader rare blood disorders, you then have a market that is not anymore 70 billion DKK, but 164 billion DKK. This market is actually growing 10% over the next eight years. If you're moving on the right-hand side, you can actually see that on the endocrine side, your market is moving from 21 to roughly 100 billion DKK, and from today and from 30 to quasi 200 billion DKK in the next six years, growing at 11%.
I am not saying, just to be clear, that we are giving any guidance on the growth of biopharm tomorrow morning. All I'm saying is that there is here space and pace to grow if you select the right battles, if you invest in the right science, and if you are really focused on innovating and meeting the big unmet needs of many of these patients in this group. That's the third building block. The first one was the portfolio, the second one was the business system behind the specialty care business unit, and the third one is the direction, where to go and that we're exploring with around our commercial product supply and our scientific teams. There come the fourth building block. There come maybe the one without nothing could happen, and that is science.
That is the ability that biopharm, alongside with our colleagues in R&D and in discovery, but also in development, is fundamentally to find sustained growth both internally and externally, and to do it within exploiting our core capabilities in our research. Of course, nobody better than Mads could walk us there and explain to us and to you how we might get there in the short run, but I guess as well a bit in the long run as well. Mads, please.
Thank you, Ludo. Yeah, it's a pleasure to talk follow-up where you left, Ludo. Yes, R&D has done and will be doing also going forward a lot of life cycle management on these very long life cycle compounds, whether they be clotting factors, growth hormones, and the likes of it. In fact, I started in biopharm only two years after the advent of Norditropin, the first recombinant growth hormone, as head of growth hormone research. Exciting to talk about it again today. Now, if we look at internal versus external research, Novo Nordisk has a strong tradition within protein engineering and really creating optimal molecules in growth disorders and in bleeding disorders. Of course, nowadays, we're increasingly looking to the outside world to see how can we create even greater value out of those assets.
One way of doing that, for instance, is by going down the oral route. Who would not like to go from an intravenous infusion of factor VIII into something that essentially becomes orally available? To that end, we are investigating whether some of those oral delivery device technologies that I hinted a little bit at a couple of hours ago, namely the SOMA device, the LUMI device and so on, whether they lend themselves even to oral administration of huge macromolecules such as Esperoct, the factor VIII molecule. We will support our biopharm colleagues very much by combining internal with external research. Obviously, our core capabilities have to, over time, go beyond simple peptide and protein engineering, which is not simple, but which has been around for some time. To that end, we are looking to the outside world to actually access new technology platforms.
You will later hear from my colleague and head of global drug discovery, Dr. Marcus Schindler, about one of them, namely RNA interference. That is the technology from the Dicerna company that we will also deploy potentially in the area of biopharmaceuticals. The likes of it, and going maybe even to the next level, includes gene editing, where I will show you one example of a collaboration that we as a company are entertaining with the bluebird bio company over the next few slides or towards the end of my slides. Of course, everything has to do with understanding the disease pathophysiology into the areas you're looking at. Deep and profound biological understanding is a prerequisite for coming up with differentiated offerings to the patients. Now let's look at what is in the pipeline and what is the time horizon.
If we start with hemophilia, I will today talk about the clinical assets concizumab, the cross-segment hemophilia agent that works in principle in any kind of patient with hemophilia A or B, with or without inhibitors. I will also talk to Mim8, where we have now cleared the regulatory hurdles for going into phase I clinical trials. IND has been submitted, and you'll hear more about how we consider this a new generation of factor VIII-mimicking antibodies. Not a me too, but a new generation. I will also talk a little bit, well, actually, not really to non-invasive therapy, apart from the fact that we will see to can we deliver oral versions of factor VIII, of growth hormone, et cetera. I'll end up talking about the cure of hemophilia on my last slide.
If we look at the biopharm pipeline in terms of where are they phase by phase, well, we have just kicked off a rather big, around 300-patient program into concizumab, the tissue factor pathway inhibitor monoclonal antibody. That is expected to deliver results early 2021, followed by a rapid BLA submission and marketing authorization application to the U.S. and European authorities respectively. We also are into sickle cell disease with a EPI01 molecule, decitabine, plus a accompanying molecule that is completing phase I over the next period to come. Y ou'll hear about what are the plans for that and what are the data we are releasing as we speak actually on that particular molecule. I'll wrap up talking about how somapacitan has already been developed for adults with growth hormone deficiency.
It's undergoing regulatory review across the globe. We're also into now kids pediatric growth hormone deficiency treatment with the REAL4 study and even kids that are born small for gestational age. More about that in a minute. Now, let's talk about concizumab. As a company, Novo Nordisk has been devoted to the tissue factor pathway, which is kind of triggered by the NovoSeven factor seven molecule. We've even looked at tissue factor pathway inhibitor as a moiety used as an antithrombotic back in the '90s. This is disease biology that we understand probably better than others. If we look into what it is, concizumab is a high-affinity, humanized IgG4 subtype or isotype antibody. It's a first in class. We believe we can be first to the market with this one. It boosts the early initiation phase of the clotting process, the hemostatic clot formation.
It is delivered in a very nice auto-injector FlexTouch pen device with ultra-thin needle, low volume injection, and it has so far been safe and well-tolerated with no adverse event reporting in the phase II trials. I need to talk a little bit about the science now. How does it work? It's a bit complicated. I'll walk you through it. Essentially, you have up here the tenase complex, as we call it. This is what, in your daily life, makes your blood clot when you have a bleeding episode because you fell off the stairs or whatever. This is what normally triggers the clot. However, to control that, we also have some breaks and some counter-regulatory mechanisms, and here's the one we are inhibiting, TFPI. Look at it. Here it comes, and it blocks the activation. concizumab unblocks it again.
It takes away the inhibitor, allowing the activation process to proceed and the clot formation to happen. That's the ultra-fine, 10-second version of how concizumab works. We can go into more detail later if you want. Now, to make a very complicated trial design a bit more easy to understand. You may look at all these arms up there. I get confused when I do so. In principle, what we are saying in Explorer 7, that is the inhibitor trial A and B, and Explorer 8, that is the non-inhibitor trial A and B, is that we are basically saying that patients who are coming in on-demand, so they are treated with on-demand when they have a bleed, they are receiving a coagulation factor. Those patients are randomized in a blinded fashion to either prophylaxis with concizumab or to continue for half a year on the on-demand treatment.
We actually have a kind of active comparison there. However, patients who are already on prophylaxis, and that may be because they have been into the phase II trial with concizumab, one of the other Explorer trials, they are allowed to go directly from the treatment with concizumab in phase II into phase III, where, of course, they will stay on concizumab prophylaxis. Otherwise, they would not join the trial. Finally, those who are on prophylactic treatment, either with a factor VIII compound or a factor IX compound, hemo A and B respectively, they are also typically allocated to prophylaxis with concizumab. Big trials. Around 300 patients, more than I've seen in the industry in general. Very comprehensive, very aggressive timelines. We are enrolling, and we believe that we have the full results sets in the first half of 2021, followed by a rapid submission.
Mim8. Mim8 is the next generation factor VIII-mimicking antibody based on the DuoB ody technology. We have actually created more than 30,000 bispecific antibodies and characterized each of them using machine learning systems and digitalization to speed the process up. We are, with a approved IND, ready to move into man. Just to let you understand what is it that it does. Well, it's like an antibody. The FC, the big part of the antibody that does nothing, it's like the scaffold, is then coupled on the one side of it to a factor IXa binding arm, and on the other side of it to a factor X arm. When these two bridge this complex, boom, magic happens and the clot proceeds, just like if you had factor VIII to initiate the process. It mimics the pharmacological action and physiological action of factor VIII.
Now, what is unique about this one? One is that it has very strong activity, as evidenced by in vivo models. Because the dissociation constant, i.e., the ability of this antibody to dissociate from the complex on the platelet once it is there, is very low, we have a minimal tendency for binding the target in circulation, i.e., there should be very little off-target toxicity. Finally, it's also delivered in an innovative device and has a beautiful long half-life, at least in animals. Let's hope it gets even longer in man. These are in vitro data that are being released, I believe it's at the ASH conference almost as we speak.
What they are really telling the story about is whether you look in thrombin generation assay in hemophiliac plasma, you can actually see that the dose response curve for Mim8, our compound, versus HEMLIBRA, the emicizumab molecule, is shifted to the left, suggesting that we have a more potent compound, and in some animal models, that actually translates into in vivo efficacy that seems to be greater than that of HEMLIBRA. It's a bold forward-looking statement to come up with, it's of course things we will look into in the clinical trials and maybe use phase III designs for this molecule that are slightly different from what you're used to seeing to prove just what I said.
TEG or thromboelastography, that is also a way of actually looking into how good can you actually in hemophilia-like plasma, where you add antibodies that block all the clotting factors, and then you see how good are you reversing that blockade. There we also see the same phenomena, actually, that this Mim8 molecule has capacities and a potential that goes beyond that of HEMLIBRA. It potently stimulates the factor VIII activation and hence the clotting process, both in vitro and in two animal models in vivo. It stops even severe bleeds, which is unusual for these kinds of agents in the animal models, and we are going to start early next year phase I/II trials that can be made adaptive such that we hopefully fast can move into pivotal trials. Much for hemophilia.
On the next slide, we move into my old core area of growth hormone research. Here we are actually speaking about somapacitan, a once-weekly, fully biodegradable molecule that is using Novo Nordisk core technology. Putting a side chain to a native human protein, not creating immunogenicity, not creating reactions at the local site injection, et cetera. We basically have seen nothing of that in phase II. We have now completed phase III and submitted for the adult indication. What did we see in the kids? Well, in phase II, in the children, in the trial called the REAL3 Trial, we actually saw a dose-dependent growth velocity increase up against the comparator Norditropin to the extent that at the highest dose of 0.16 mg per kid per week, we actually exceeded significantly the growth velocity of the standard dose of Norditropin.
This is actually the dose that we are into phase III with in the trial called REAL4 that is ongoing and recruiting. We are also in the REAL5 trial doing a phase II trial in kids born small for gestational age because they did not buy into the arguments about exactly what dose do these children need, because it tends to be a little bit different from the GHD indication. Finally, somapacitan in adults, we expect a regulatory clearance or at least decision, both in U.S., EU over the next year, and Japan will be submitting for PMDA over the next months to come. My final slide actually goes to gene editing. We are in a collaboration within hemophilia, initially hemophilia A, i.e. factor VIII, with a company called bluebird bio that already has an approved gene therapy product.
It's using a so-called megaTAL way of driving into the genome right at the double stranded DNA where you want to cut it out and insert a healthy copy of the gene that is diseased or sick in the patient with hemophilia. This is a very specific and, I would say, very advanced technology, and the way you do it is you need classically a gene therapy vector, an adeno-associated viral vector, AAV, that carries a very compact factor gene construct of high quality. That has to then enter into the chromosomes, not the episomal, where normal gene therapies, they are actually not copied with the cell copying. They will be diluted, and that's why you cannot treat children with classic gene therapy.
Here, the concept is that the MegaTAL delivery in small lipid nanoparticles actually cuts open the chromosomes and allows for the insertion of the DNA construct that will ensure coding for the healthy factor VIII gene product, potentially for lifelong, in a way that you can control because you also control the promoters that are used to actually insert and where to insert this construct. It can be lifelong, it can be used in children. It's very exciting. It could be one avenue into the future of gene therapy/editing, and we do believe that this shows that Novo Nordisk is entertaining, maybe not as the first movers, but I hope at the end of the day, as the best movers new technologies such as gene editing. I think with that, Ludo, over to you for closing the session.
Thank you very much, Mads. Right. Mads explained the magic of R&D. I think it is actually more than magic. I hope now you understand why we believe it is not a play of chance, why we believe we have serious fundamentals, serious building blocks in biopharm, and why we believe biopharm will really contribute to the long-term growth of Novo Nordisk. Two remarks, two important points. The first one is that we really are looking to secure a sustained growth outlook for biopharm by leveraging our business system, our commercial competencies, and ensure a never-ending flow of launches in the market. That is one. Also two, that we are really committed to strengthen and progress internally and externally the biopharm pipeline.
With that, I'm happy to call on stage, of course, Lars will moderate the Q&A, but also Camilla, Martin, and Mads to answer questions you might have on either obesity or biopharm.
Thank you, Ludovic.
Thank you very much.
We'll do a bit of innovation because in the break we did a bit of learning on how we can move the microphones around. We'll actually keep the microphone at a location and try to get two questions before we move on. Not from the same person, though. Still one question, and we'll start over here and try to centralize the questions around that.
Thank you very much. Wimal Kapadia from Bernstein. I'm just trying to reconcile the obesity guidance for a doubling of sales to 2025. Given that Saxenda is growing around 40% globally, and given that semaglutide in obesity could also launch in 2021, your guidance suggests a significant slowdown, both in a percentage level, but also in an absolute level. Is that guidance a flaw or is there an underlying reason why the growth is going to slow down so much? Thank you.
Thank you. Camilla, on obesity guidance.
There are a couple of factors that we have taken into account when we've made the guidance to double our sales by 2025. One is, of course, that the current growth rates that you're seeing, actually 50% year to date, is based on a relatively small base. That, of course, as we talked about earlier, becomes increasingly difficult to expand with the same growth rate on a bigger base. We've also taken into account that it requires yet another, more efficacious compound to be able to sustain growth rates at a stronger base level. We are expecting that Martin will deliver that, but that will not be in the first few years of this period. The last thing that we have taken into account is, of course, the loss of exclusivity on Saxenda.
Those are the three elements that we have factored in to get to, I could say.
Yeah
A doubling of our growth by 2025.
I think Martin sneaked in an "at least," we are aspiring maybe to a bit more than doubling. Was there one more question around here? Yeah, we can move here.
Thanks. Richard Vosser from JP Morgan. Thinking back to the SELECT trial, I think you highlighted some comorbidities that you're going to look at, osteoarthritis and some others. What about liver injury and NAFLD? Can you look at that within the trial and sort of get some idea of reversal of some of those rather nasty things? Thanks.
Thank you, and now we have two wizards on stage. I think we should go to Martin.
We can, in short, and we will. Obviously, the SELECT trial is not specifically enriched for patients suffering from liver disease, but we already now know that approximately 5% of the population in an obese setting will be suffering from some stage of liver disease. Obviously, we will be looking into this.
We keep going here at the table.
Sachin Jain, Bank of America. Just a question on the patient numbers you provided as an opportunity for obesity, where you talked about growing from 15 million to 24. Can you give some color on how much of the existing and future market you think is out of pocket versus some sort of reimbursement? The geographic split of that and how that changes over time. I think you've been fairly vocal. A lot of the growth is out of pocket in some of the emerging markets. The last one is, you talk about a medication market, but there's a very broad anti-obesity market with OTC, gym memberships, all that sort of stuff. When you think about those numbers, how does that play out? Thanks.
Camilla, on growth, reimbursed out of pocket and also OTC considerations.
Yeah. The status today is that, as you know, that most patients are paying out of pocket on their own. It's actually mainly in the U.S. where we, in the commercial segment, have a coverage of up to 78% of patients. When we're looking forward, without going into too many details of that, you could say that there is a tradition for out-of-pocket pay in the Middle East and in Asia, where actually obesity treatment is very strong. That's slightly different from our diabetes business. Of course, in Europe, there is a tradition for not paying out of pocket, and there it would be even more important to unlock the reimbursement. We're going to take that a little bit country by country approach to make sure that we can agree on this with the payers and the regulators.
On OTC?
On OTC, yes, there is a market for OTC, and it's clear that you can see some of the Noom that we have teamed up with is a different type of behavioral modification that can also get to a weight loss on some patient groups up to 5%, approximately. Difficult to sustain that also over time, but some can do it longer than others. The combination of the two is really what I showed you in the data is what drives the better efficacy as of now. Of course, with what Martin showed you on the development coming forward, we see that there is a potential for much greater weight loss from the products that we would be able to bring forward in the future. I would say yes, it's good to have other types of support at the same time, and the combination is good.
Of course, even greater efficacy is what we really would be focusing on in the future.
Coming from Mads.
Yeah, talking about efficacy, there is, as Martin alluded to, no landmark study that has shown a benefit on heart outcomes. Reimbursement in a broader context is more natural to follow our demonstration of heart outcome benefits such as stroke, mortality, osteoporosis, and so on and so forth.
Good. Thank you. Move over here, and then over there afterwards.
Thank you. It's Mike Leuchten from UBS. Question on stay time in obesity. When we think about the rebound, when we think about the hormonal changes that are required, in your mind, what's the magic number, regardless of the extent of the weight loss? How long do you think a patient has to stay on therapy to retain the weight loss?
Martin.
Medically speaking, as far as we can see, the vast majority of patients would be looking at very long treatment in order to sustain weight loss. Most patients stopping and any accrued weight loss or stopping treatment after an accrued weight loss will regain part or all of that weight very rapidly. I don't want to take the word lifelong treatment into the vocabulary, but it is a lengthy treatment. Basically, because as we discussed, the body set point for basically food intake will drive towards taking back the weight that has been lost. Continued treatment is likely the best option.
Take one more question.
Michael stole my question. I'm going to ask it in a similar way, I guess, which is, it's not the same question, but the same theme of stay time in obesity, because you've given yourself a target of meeting bariatric surgery, but the weight loss target you gave us for bariatric surgery was three years. Clearly there is a degree of sustainability given the surgical option. How are we going to get patients to achieve that weight loss and be sustainable? I guess it's more of a question now to Mads. Is there anything biologically that we can see even very early in the pipeline that has the ability to reset some of the biological problems associated with obesity, so that once I've dropped my weight, there's a maintenance therapy that biologically could keep me going?
I realize it's many years away, but it seems to be the only way that pharmacologically we're going to solve the problem, whereas surgery has sustainability.
Yeah. I guess my name brother, a gentleman also called Mads, who's running obesity research in Marcus Schindler's area. His dream is to find that set point and reset it, so to speak. Take the thermostat and change it so that we are reset at a level where basic metabolic rate and energy intake into the body is more coupled to a lower BMI in steady state. We're pursuing that vigorously. We have academic research collaborations to kind of tease out if that is possible. Of course, we'd like to understand it in the human species, which is slightly more difficult than treating rats and mice. We do have findings on some of our early research projects that seem to indicate that there might be some resetting of the set point, but that's too early to be optimistic about. I agree with you, that's the end goal.
Martin also had it at the upper end of his innovation curve, but there will be steps before we get there.
We move over here.
Yes. Martin Parkhøi, Danske Bank. To Camilla, regarding this doubling, it is one question, maybe it sounds like more than one for you. Anyway, could you just talk a little about if you have implemented any kind of impact from, I think you call it investigational use of both Ozempic and maybe also later on RYBELSUS in obesity, and that could maybe slow down obesity growth, at least in the short term, until you have more efficacious products in the market. If I look at the dots that you make, I think that's very difficult, but it seems like your volume assumption is somewhat more than a doubling. Are you thinking about a different average selling price in obesity, either because of stronger growth outside U.S. or because of a different pricing strategy for semaglutide in obesity?
Just remind me, I think it's the same area, you have made this settlement with Teva on Victoza and liraglutide on the patent expiry date. How is your position and when have you in-calculated potential competition on Saxenda, actually?
I think there was one question here on how the growth can be, considering a bit potential cannibalization pricing. In the context of that, growth assumptions.
When it comes to diabetes and obesity, of course, there might be some investigational use in this area. That's nothing that we see that we have seen a big part of. Of course, that varies a little bit from market to market. I don't think that that should be something that has a major impact on this. In general, the second part, sorry, I forgot.
The pricing assumptions.
The pricing assumptions, yes. I think we are not guiding on the pricing assumptions. Of course, what you can think of when you look at how things are generally happening is that once you get a broader volume and have an impact, there might be adjustments, but that is more like receiver for the channel mix that we already now see in the U.S., for example, that's just a natural evolution of that. I think we should see things in that context. On the dots, they are you can go back and have a look later on, of course, but they are just trying to indicate that we are expecting to take a bigger share of the segment, but that the segment is also growing.
Of course, giving the channel mix and so on impact over time, it is likely that maybe the patient numbers will grow slightly more than the sales. That is sort of, don't get too meticulous on measuring exactly that difference.
On a follow-on, generic or biosimilar product, we have not seen any activity yet, but we assume there could be. Having said that, of course, this is a market that's driven by efficacy. With the efficacy that we expect to get based on semaglutide, we of course assume that with the stay time we talk about and the, say, double-up effect, there'll be a massive change to a higher efficacy product. We do assume that there will be some biosimilar entry.
Specifically to the Teva case, it is implicit that the composition of matter patent, that was kind of the decisive point, that also pertains to Saxenda, and since we now have the pediatric patent term extension of six months, we are into the month of June 2024.
Good. One more.
Florent Cespedes from Société Générale. One question on the phase II program on the combos in obesity. You are aiming to achieve a stronger efficacy, stronger weight loss. Could you maybe share with us if you have observed any, let's say, further side effects, or could you share with us the tolerance profile observed so far? Is it at the cost of some side effects, the stronger efficacy? Thank you.
Martin, what do we see in the clinical setting?
Yeah. Just a small correction. Phase II is currently amylin in monotherapy. Phase I in multiple doses are the combination therapy. We've actually worked a lot on the titration part for both the semaglutide but also the amylin molecules. We managed to be fairly successful as far as we can see in this fairly small setting, not having GI side effects exceeding that what we would expect from a GLP-1 analog alone.
Thank you. We move over here.
Michael Novod at Nordea. For Mads perhaps, or Martin on the AM833 and the combo. How far are you in terms of developing the pen to actually do the combo? It's going to be two separate blending in one pen. Just a small follow-up on the LOE on Saxenda. I guess there's a rationale for a massive and very rapid switch when you have a drug going two and a half times the efficacy and once weekly. Just difficult to see that if you get on the market 2021, 2022, that there's any impact whatsoever from the Saxenda LOE.
Yeah. On the device, you are absolutely right, Michael, that the pl, the isoelectric point for the sema- and the amylin molecules are quite different, actually decades apart, and that means that you cannot per se co-formulate them. What we've done is developed a device that is really smart because it actually ends up co-administering in a way where you don't feel that it's not just a standard single-use device. You do nothing but inject, and without revealing the secret, they both get to the same site of injection, and the only trick we have to prove to regulators is that the pharmacokinetics are not changed for any of those individual components. In animals, that looks to be the case and promising. In humans, we don't have the data yet. I would assume, hopefully, they follow the animals.
Do you want to cover the loss of exclusivity?
The loss of exclusivity, we still need to take into account that there might be a potential entrant into this space. Of course, we do agree with you on the fact that semaglutide in obesity is a very strong competitor in this field and has a very clinically relevant profile to upgrade from Saxenda.
That might be why we don't see a whole lot of activity. Let's see. Shall we take one final question before lunch?
Thanks. Pete Verdult. Just a question from Sidney, a question for Ludo. Lots of interesting assets in the pipeline, late stage coming in, but that won't affect the sort of strategic aspirations for 2020 to 2025. I'm not asking for guidance, but I want to understand if you are able to maintain the sort of growth rates that you've seen this year, would that make you ecstatic or is that completely unachievable? Just how you're thinking about what is good and bad for biopharma.
Well, I wish to be ecstatic, of course. As you know, we're not guiding. We're not giving any guidance on that. What I'm trying to put today is the fact that we are building bricks, building blocks in this unit that I believe are, in itself, structurally both from a pipeline and a commercial perspective, all the ingredients to really contribute to the long-term growth of Novo Nordisk, and that we are both internally and externally always looking for elements to enrich this pipeline in order to make sure that we can really meet this target. I really fundamentally believe that with the products we have today, and remember, Esperoct has only been launched in two markets yet. We still have many markets to launch Esperoct in.
With Refixia, with everything we're doing on NovoSeven, with somapacitan and concizumab, we have in our basket, I guess, a lot of great medicines to help patients and provide support to the overall treasury of Novo Nordisk. I'm really confident about that.
Good. Thank you so much. With that, I think we all have deserved lunch. You'll see that there's nothing like a free lunch because there's actually an opportunity to continue dialogue, and there is a lineup of, I think it's the same meal, but different settings. You can see on your name tag where you can go if you have a special set of management members you want to join your lunch conversation with. We break for lunch for one hour, and there's an opportunity to continue the engagement. Thank you very much.
[Break]
All right. Welcome back from lunch. Peter, thank you for giving me the short straw, as we say in the U.S., about having the first presentation after lunch. I don't know if that's Yeah? Thank you. The last time, other than this morning, I was in front of this group was almost two years ago exactly at Capital Markets Day in Copenhagen. One of the things we talked about, if you remember, was we were preparing for the Ozempic launch. We talked about the changes that we were going to make to the operating model, and that we were in the process of finalizing and making distinct changes because we needed to, because the U.S. was involved with the challenging market, and we wanted to have the best-in-class launch ever.
If you fast-forward to today, two years later, we have a product, as I mentioned earlier, it was the fastest product ever to DKK 1 billion, we're thrilled about that. It's a product that now has, after 21 months, NBRx leadership against our chief competitor. If you look at the total GLP-1 TRx for the U.S., we're leading there as well. It's fantastic. Our work is not done. What I'm going to describe now over the next 15 minutes is what is still a market in the U.S. that is complex and challenging. It's also a market in the U.S. that is going through, for us, a major transition, or even you could call it a transformation. I would say that within that transformation, there's the fair balance, we'll skip through that.
Within that transformation, we tried to get at least an understanding to give you a picture of what it looks like, to give you a feel. We came up with an Indy race car or racing in general. Just give me a second to walk you through this. In racing, and I don't know a lot about racing, I know a little bit, but in racing, you have to make changes along the way. You have to maneuver differently to the changing environment. You have to course-correct. You have to worry about what your competition's doing. You have to work as a team. In a lot of ways, that's what North America is doing. My only comment to Canada now is going to be that Canada has been performing for the last several years. We're looking at double-digit growth.
They've done an exceptional job with launches, and they're going to continue to do that. That's our aspiration, and you can consider them in the pole position in racing terms. The U.S., on the other hand, is probably what we would think of as in a pit stop. It's in a pit stop because we need to continue to change and make those appropriate changes so we can win. It's the only way an Indy car and a team can actually get to success. Maybe one just way to think of it is that we've taken off the growth tires, which were once insulin, and now we've changed them with the tires, which are now GLP-1. We're in the middle of this transformation. If you think about what it could be, so aspirationally.
We in the U.S. could have, and the rest of this will be U.S.-oriented, will and could have two new blockbusters in the market. That is incredibly exciting. What's also incredibly exciting is what's in the middle, which is patients. We've talked about purpose, we've talked about sustainability, doing the right thing as an organization. You heard that this morning. Well, we do the same thing as part of the largest affiliate. We actually count patients. We just eclipsed the 4 million patient mark in the U.S. Our aspiration is to put many, many more patients on our products. That's exciting. What's also exciting and a bit challenging is the fact that we are going to have this transition of about 70% of our sales in the next several years.
What was almost 100% of our business in 2015 will be approximately 30% of our business in 2022. I'll walk you through a little bit of that detail. That's no easy feat. Mike and I in the car this morning, we're talking about, I think it was about a movie, but we were talking about Netflix. We were talking about how Netflix many years ago changed their model. Now they took up streaming, they changed their model, now they're $130 billion company. We also talked about Blockbuster went in a different direction. Going through a transition is not easy, but it's something that we need to do, so we will be doing it. Let me give you a little perspective of what that looks like.
We have some legacy products, and they are primarily insulin products that have been, and this is no news to anyone here, they've been under a challenge from a pricing perspective and a biosimilar perspective. That will continue. These slides are illustrative, but they directionally give you where it is headed. We'll continue to see a challenge in the insulin category moving forward with the anticipation of even more biosimilars entering. We also will have a continuing challenge with Victoza as we approach our LOE. We just had a lot of questions at lunch about this. Again, with the stay time on Victoza, that is a natural progression that's happening, and so we'll manage that as we go. It is a drag overall on the U.S. business.
With biopharm, Ludovic, we did take a little bit of a dip because of an innovative product. We also put a new leader in place two years ago, and she's done a really nice job of finding those spots where we can compete, almost to what Ludovic said, and also gearing up for launches. We're bullish about that opportunity moving forward. Now, if you take a look at the entire picture of the U.S. business, it really comes down, and we can do it on one slide. The growth and almost all of the growth is going to come from GLP-1. We know that. We're in the pit. We've made those changes. We've allocated resources appropriately, sales forces appropriately, and we know that's where we have to drive our growth.
The great news is, as I said earlier, we have a best-in-class portfolio to be able to do that with Ozempic and RYBELSUS. With obesity, certainly, and again, we were just talking about this at lunch. We think, and Mads detailed this, we go from 5% to 15%. That is meaningful, and in a lot of ways could be game-changing for us. We're still selling Saxenda. Year-over-year growth is positive, but know we're also preparing for what could be an excellent opportunity with semaglutide for obesity. The insulin, again, as Mike alluded to this morning, it's less of a sales component for us now, but it is still something that we have to manage and will continue to be a drag as we move forward. How we manage it is also very important. I just mentioned biopharm.
We have some critical launches coming up, and we're going to make sure that we do our absolute best with those launches. We're preparing for them now. Overall, the right-hand side of the screen really talks to the picture that I was alluding to earlier, this 70%. As an organization, we're making the appropriate changes to be able to manage that. You can consider the overall U.S. business to be, from a sales perspective, somewhat flat-ish as a result of what we have as pressure in some parts of the business, the legacy parts, and where we're going to drive disproportional growth. That's in the short term. In the midterm, we do expect to bring it back to single-digit growth. The U.S. business, what does it look like? If you look nine months to comparative nine months, it is slightly down, the overall U.S.
business, and you can see that. It's slightly down. You do see, and Mike alluded to it, we still have the majority of that, 41% is coming out of insulin, so it still is exposure. We acknowledge that. We understand it, and we're managing that. What's probably more exciting in our own investable thesis is what you see on the right-hand side of where all the growth is coming from and where we will continue to compete, and that is the GLP-1 and also the SGLT2. That is where we will be competing, and that is where our focus and energy will be from an investment standpoint and a strategy standpoint. For us, this is how we're going to be able to manage that transition. What's also important is can we compete and have we competed?
As I mentioned, we're almost halfway through this transition now as we look to get to 2022, and I'm talking about this transition of 70%. What's important is along the way, and again, remember two years ago, we have been and will continue to compete, and Mike alluded to it, whether it's Tresiba still taking market share, really the only basal insulin to do it. Last couple of quarters with biopharm have been productive, and certainly with Ozempic, we are extremely proud internally of the job that we're doing and on behalf of patients. It's fantastic, we'll continue to see that. Overall, we do see the share of the growth, as Mike alluded to earlier, above where our market share is. It would be impossible for me to go through a U.S.
presentation if I don't talk to at least some of the complexities. These are well known. For us as a manufacturer, for anybody else, getting from manufacturer to patient is more challenging today than it's ever been. It's more complex. You have government intervention. You have this public debate that happens all the time around affordability, which we want to be in the forefront of. I'll get to that in a second. We do have the digitalization almost of the entire industry. Camilla spoke to that earlier.
We also know that the payer consolidation has not necessarily stopped in the U.S., though in some ways, and we just talked about it at lunch, when you have pure-play PBMs that get together with insurers and they now are a little bit more concerned about the medical benefit as well as the Rx benefit, the pharmaceutical benefit, maybe that's not such a bad thing. Although they have scale, so I'm not trying to say it's easy. Just two pieces here.
We've had a market access team that has been battle-tested for years, and we'll get to RYBELSUS access in a minute, but feel really good about where we are from a market access perspective in terms of our talent, and that's important. Again, I think it's also important that we touch just at least a minute or two on affordability, because we have put, I'd say, our emphasis and almost our emphatic stamp on saying that we want to be a company because of our purpose and because we do believe that from a sustainability perspective, it helps, that we are at the forefront. If you look at not one single offering as it relates to affordability is the answer in the U.S. It's just not. Lars mentioned it earlier. It is a complex system.
What we know is even for those individuals that have healthcare in the U.S., so they have insurance, they have healthcare insurance, there's a lot of those individuals that still struggle to pay for their insulin, in particular. We know we needed to help. It's good for the patient, and it's actually good for our business as well. We have a lot of programs that help people with insurance. We don't abandon them just because we negotiated a formulary position. Could be from a benefit design and things that we have no control over, but we're still activating our efforts to help. We also know through the Affordable Care Act that many, many millions of more patients now have insurance, and that is a very good thing for those patients and for a market that does rely on, most importantly, insurance.
What we also know is there's roughly 30 million Americans that don't have insurance still for a variety of reasons. We know they need help, and we have programs and services to help them. Lastly, anybody that falls through the cracks, we've had offerings since really going back to almost 1990 with Walmart to help those individuals. We feel really, really good. We think it's aligned with our purpose and aligned with our own sustainability. To the roadmap, and this is something that we've now used for two years. As part of this transformation that we've been on, we wanted a simple scorecard or a simple roadmap, I should say, for the employee base to understand that when we have to make strategic decisions around investments, that we could all align around it. This is what we developed. It's not too complicated.
Most in the U.S. could almost regurgitate this maybe too many times. For those watching, I apologize again for them seeing it, but this is it. This is our roadmap. GLP-1, that is where we're going to see our disproportional growth. Our energy and our effort in the U.S. is disproportionately aligned to the growth of GLP-1. We also know that obesity, we need to continue to develop this market and drive Saxenda and prepare for sema obesity, which we are doing. What we also know is we have a big component of our business that we need to manage. We need to manage the erosion of insulin. It's going to happen, but we need to manage it. The more effectively we can manage it, the better we are. We still have, by the way, +3 million patients on our insulin business.
It's important for the patients as well. In no way are we abandoning them, it's just that we take a different perspective in terms of investment. Biopharma I've alluded to a few times. We feel very good about the upcoming launches. Let me zoom into GLP-1. We do have a portfolio offering. As I mentioned, I don't believe that there's any company that is better positioned today to compete in the GLP-1 space. Remember, 7%, as I alluded to earlier, 24 million patients treated in type two, only 1.6 million in the U.S. are on a GLP-1. Remember that big component of OADs that are not in control. We have a portfolio offering. Within that, if I just zoom into the innovative products, because that's really where our focus is, we're not putting any promotion against Victoza.
I could tell you that when we think about our positioning for the product, and I mentioned this earlier, it's probably important that we overemphasize that we do believe there is a place for both products in the market, and we are positioning them as such. We do want to have, in the minds of a physician, clearly, the first preferred oral medication is RYBELSUS. The first preferred injectable medication is Ozempic. For us, it's the evidence. As I mentioned earlier, Mads delivered another gift, which over the last 10 years is incredible. For us, the evidence, what do we walk in the evidence? The evidence is right there when we think about PIONEER 3 and being able to say the leading DPP-4 and the evidence, the leading SGLT2 in PIONEER 2 and the leading once-daily in our own product in Victoza. That is our evidence.
That does support the positioning, and it's how we will be successful. We also, as you know, have the evidence and will continue to use this evidence as it relates to injectable Ozempic, which is SUSTAIN 7 against dulaglutide, SUSTAIN 4 against the leading still prescribed basal insulin and the add-on to basal. That's critically important. We do believe they can coexist, we're positioning them to coexist, and we believe that the market and the data supports it as well, as well as importantly, our own evidence. We're super excited about it. One of the things I forgot to say earlier when you should know is that Lars talked about people, and Monique will be up later as the head of people and organization. We do these surveys all the time that test the pulse of the organization.
Maybe I jumped over it, but the bottom was people and organization. One of the things I can tell you is that we have some of the highest engagement scores ever in the U.S. as it relates to engagement. Highly engaged employees that for the right reasons, want to be here, and that does give us, I believe, a competitive advantage. It's super exciting to see, and we are very excited when we see the evidence in what we're doing. When we think about where is the market going, I got a couple questions at launch. It's almost impossible to predict where the market is going. There's some things that we look at that can predict where it's going. What we do know, as I mentioned earlier, this market is event-driven. We have another monumental event with the world's first oral GLP-1.
This is not just a compressed pill. This is a pill that has the clinical profile to compete and with the oral administration to compete. It's an unbelievable opportunity for us. Access is going to be the key to success, as it is with any product in the U.S. at launch. What I would tell you is that the access that we achieved for Ozempic is a high bar. We did a fantastic job as an organization, and we're very proud of the access that we have. It enables us to go out and sell and market this product effectively, to turn on DTC and other mechanisms that we use personally and not personally, in terms of our promotion.
We're out there right now actively negotiating. I'm sure I'm going to get some questions. Maybe I'll eliminate those questions right now by saying there's really nothing I can say about the access other than the fact that we have ambition to get the appropriate access that we need to be successful. We know it's critical to the success of the brand. In closing, before I bring up my partner, I would say crime. It's maybe not the right thing. We are transforming this organization. It's not an easy lift. We understand that. We're in the pit. We're changing the tires. We're making the appropriate adjustments to put us in the best position to win. Some of those choices aren't easy, some of them are strategic. We're making the choices. We have been for quite some time.
We started this conversation back in 2017. We also know that it's going to continue to be a challenging environment in the U.S. There's no doubt about that. I'm not going to say that the complexity and the continued consolidation is not challenging because it is. Certainly, we believe that we have the right profile of products, the right portfolio of products with the right clinical evidence to be successful. It still is a market that rewards innovation, and we have it. I can tell you that we have a roadmap for success. We do. We have this roadmap that we've used now for quite some time. It's not that we don't make subtle changes, but we do believe that we have the right measure for success. With that, Mike, may I see you come up?
Thank you.
Yep.
International Operations. First, please take the future with a pinch of salt. Where was this? Yes. International Operations, that's the place home to, I would say, some 430 million people with diabetes, 570 million people with obesity, and maybe more relevant for this meeting, a place where about half of the Novo Nordisk value is generated. That value has been generated quite sustainably over the last few years with the rate of approximately 4 to 6 percentage points any given year. There have been a number of changes when you look at the regional dynamics during this period. When you added all the numbers up, historically, IO has been growing some 4 to 6 percentage points. Last year, we broke away from that trend to 7% growth for 2018.
For the first nine months of this year, we reported 11% growth, and we're predicting that the full year for IO will be around the 10 percentage points this year. Most of this is coming through demographics. This is the place where majority of the world's population lives. It's coming through value upgrades and the new generations insulin, as I spoke earlier on also in my morning session presentation. What we have not done well in IO is market share growth. You could see from the red line, our market share has been under pressure for a number of years. For more than 10 years, actually, in International Operations, we have lost market share, slowly but surely. We have not been very happy about this, and Lars spoke to that also in his opening speech.
Of course, what that means then, for a period of time, and you can see this on the light blue line, we were growing substantially less than the darker blue line. Something changed some couple of years ago, and it says market fit approach introduction. We have tons of products available to us. They're all supposed to do more or less the same thing with some differences here and there. We also have a lot of countries. Historically, we took all of our products and we launched them in the same way with the same messaging, same everything, actually, regardless of how the countries were different. Countries are very different. Healthcare systems are different, affordability is different. We decided to actually take the assets that are available to us and take a look closer into how and which ones are best fitted in which markets.
The result of that has ended up in more introduction of some of the products that we would have otherwise not maybe launched, and for sure, growth drivers that with the old type of strategy, we would not have had. Now we see that over this period of time, we've really been able to improve our share of growth, and as a result, are also growing much, much closer to the market at 9% versus the 10% that the market shows. Historical growth of, let's say, 5%, I would say that's a little bit of history. We are projecting to basically, as we go forward, to up that game to about 6%-10% growth rates. This is not going to be easy. It's not going to be easy because first, we have to protect the light blue section.
There is a large amount of products, legacy products, mature products, DKK 39 billion worth of sales, that a bit of a percentage up and down will make a difference for us. We need to invest and make sure that the base remains as it is. On the other hand, we also need to recognize that the future growth holds upon us by focusing on three and only three elements, doing better in the insulin basal market, selling more within the GLP-1 segment, and really expanding and making more out of the obesity market. Two-third of the growth going forward to 2025 will come from those three elements. I'm going to use the next three slides to explain a little bit more in detail each of those elements. If I'll start with insulin, basal insulin.
This is by far the largest insulin segment that exists when you compare it to the mix and the bolus segment. This is the place where we are not a leader. In the other two segments, we are leaders. We have approximately a third of the market, and for a decade or so, we've been fighting in this market with our asset Levemir and have not been able to do well, better than 30%. Now we have assets that can give us hope we can also become leaders in this segment. Tresiba, Xultophy are going to play a major game changer in our market share increase. As long as we can keep the share of growth above the market share line as it is now at 45%, I am quite hopeful that we can actually achieve this.
We need to play the Tresiba and the Xultophy game quite correctly. We have Tresiba available in 80 markets today. That's a lot. More recently, we also introduced it in three very large markets, Germany, France, and China in the national reimbursement. This is now giving us a very good base because, of course, after U.S., we're talking about the second, the third, and the fourth largest basal market now having Tresiba, which we didn't have just 18 months ago. I'm extremely hopeful on this, and add to it another 10 launches over the next couple of years. Xultophy has become a major growth driver for region Europe, 30 launches we have had, and we are planning to have another 15 across the world equally, really exciting for us.
We will protect the base, be it on human insulin or Levemir, and then push the growth with Tresiba and Xultophy. Hopefully we can get leadership in the basal segment as well in due course. GLP-1. You've heard a lot about GLP-1 in the context of U.S. specifically, but it's also equally important for us in international operations. This is a place where we have not done well again. Especially we saw a major headache after our partners on the other side of Atlantic, the American company, launched their once weekly. We basically saw that we are not able to run as fast as we were. We got a bit of a boost with the CV label update of Victoza.
We got a little bit more boost with Victoza joining the Chinese national drug list, we really pushed forward with 23 Ozempic launches so far, starting in Europe and a bit in AMEA. Really turnaround picture as you see of share of growth, still the dark blue line is not as high as our market share, which means if you keep it like this, we will continue to lose market share. We have to change things around. It is basically Ozempic and RYBELSUS, the same as just Doug explained, for us that will change the picture. You could see that I changed the graph to only show what happens when we launch Ozempic. In markets where we have launched Ozempic, we are able to actually gain market share and have a share of growth higher than our market share.
This gives me extra hope that as we roll out Ozempic into international operations, then we should be able to do much better. Add to that, of course, the RYBELSUS, where we're going to have 30 launches. 30 launches of RYBELSUS and 40 launches of Ozempic coming up. I just heard actually a breaking news that one of those 40 is soon going to be Germany, an extremely important market where we will have Ozempic ready. That's going to be super exciting. Obesity. This has come as a surprise, I think, to us in international operations. We've done really well with obesity, and that gives me a lot of confidence that we should be able to do well as we go forward as well. This is a DKK 4 billion market in international operations right now, growing around 12%.
We are growing around 60% currently with Saxenda adding about a half a billion DKK. We're really the only growth driver in this market, and I hope we can continue this as we are spanning our launches also with Saxenda, going from 43 to 15 more in the next couple of years. But it's more than just the launches. It is also building the market, patient support programs. It's a way of trying to find out how we can keep the patients longer than the two to five months they're currently on the product, and in general, building infrastructure and having as many patients as possible, so when we come with sema obesity, then the platform is right for us. Huge unmet need, and I'm extremely optimistic.
If there's a couple of things you should remember from my slide, history and our 4%-6% growth numbers no longer holds water. We have an ambition to grow 6%-10%. We can do this by holding our base, but also putting a lot of pressure on ourselves to increase market share in the basal insulin segment, sell more within the GLP-1 on the back of Ozempic and RYBELSUS, and do better with Saxenda in the obesity market until sema obesity joins us. With that, I think I will invite Lars for the-
We have exciting breakout sessions coming up, but if anyone has some questions to Doug and Mike's presentation, we'll entertain them, before we break out. Please join me here, and we'll start by Only one question this time, Martin.
I promise that. That is for Mike. 6%-10% is a very broad range, given that you have been going around saying that it has been very stable historically with the 5%-6%. As I understand it, tender-based contracts are becoming less and less of your business in some of the international markets, which should also reduce volatility. Why this very large gap?
The 6%-10% is the growth projection we have till 2025. I'd like to say that we hope to be growing at the top of this range as we go forward. Currently, we are doing that right now. Demographics, good volumes, and all the launches that I spoke to speaks to that possibility. We're also dealing with a region that has possibly any given year risks associated to it. Political risks, macroeconomic risks, pricing risks, and as well as currency risks are some of the things that can actually drag the growth rates lower any given point of time. I do think when you're thinking about now till 2025, the range of 6-10 is a good place to be.
Good. We'll go to the back over there.
Hello, Marco Sormani, Varenne Capital Partners. I have a question concerning the potential competition and cannibalization between, as you mentioned, the best oral and the best injectable, but it's still the same molecule. Do you see a potential competition between the two products, and how do you position them? Because if I am a patient in some way, unless the oral is more expensive than the injectable, I should prefer an oral version instead of the injectable. I agree the research has been very good, so you have the best products in both categories, but how do you manage the fact that it's the same molecule behind? Thank you.
If I give it a shot first, I don't think patients care that much about what is the underlying molecule. They're looking at what is the situation whereby they use the product. Obviously, if you are on a, say, an early phase type two state, that's where tablets are dominating treatment. You expect to get a tablet-based treatment. That's where we position RYBELSUS. Obviously, if you have a more progressed type two diabetes, efficacy becomes more important, and that's where injectable treatment kicks in. We don't see it like a way to get one molecule. It's about the disease state you are in. It's about the efficacy and the ease of administration that matters. There are distinct different categories.
Of course, some of it will be overlapping, but we are going to face in a way larger point of patients, and we believe there is significant growth in that. We will keep one more question over there, and then we will make a jump to the other end.
Thanks. Pete Verdult with Citi . Just one for Mike on China and GLP-1. I mean, 1% value share for the class right now. Can you give us any sort of timelines in terms of Ozempic or RYBELSUS in terms of approval and reimbursement? How you're thinking about that opportunity or how we should think about the timelines around that? Thank you.
I think the good news is we are right now on our own with Victoza. While of course, we would have hoped to have Ozempic already on the market, our competitor with their once weekly is also not there. That gives us a bit of a competitive advantage over some of the other markets. I would say within the next couple of years, I hope to see Ozempic in China. We're working very hard, of course, to bring it in. Usually it takes a year or so, a year or two, depending on when the Chinese government opens up the national drug list before it gets reimbursed. Until then, of course, we still can get regional access and work quite hard on it. That's the timeline. I'm very optimistic that we are able to continue seeing Victoza grow quite nicely until that time.
Great. We go all the way to the back. It's not working. Hold on. Another mic coming up.
It's Keyur Parekh from Goldman Sachs. Doug, one clarification and one question. You said you expect the U.S. to be broadly flat in the short term and to grow single digits in the midterm. How do you define short and midterm? That's a clarification. Earlier this year, I think at your full year numbers, the phrase used was, you expect RYBELSUS to have an unprecedented launch. Do you expect RYBELSUS to be a blockbuster in a shorter period than you did that with Ozempic? Well, that's how we would understand unprecedented.
Yeah. Thank you for that one question around RYBELSUS. Firstly, on What was the first one?
No, they were both.
First to Doug.
Yeah. Let me start with unprecedented. Again, that's a term that we're trying to motivate the team, and it is. Our intent is to make this as big as possible. We're not guiding to an exact dollar amount as we did with Ozempic. We are trying to make this as big as possible. We're not guiding to a dollar amount this year. Again, that's dependent upon access and things of that nature, as you know about. Now I even forgot the first question.
Short term, long term.
Short term, midterm.
Yep.
What is short term, long term?
Short to midterm. Short to midterm is zero to two, and then three plus, I guess, in relative range.
I think Doug's message was-
Was enough?
Turning around 70% of the business was illustrated until 2022. That kind of indicates. Did you have more questions in the back? Okay, we move over here.
Thank you. It's Peter from Handelsbanken. At the Capital Market day two years ago, you were extremely bullish on GLP-1. That has turned out to be true. Also there was a question regarding the impact on insulin volume growth, where you were sort of relatively optimistic that it wouldn't sort of deteriorate, now we are to flat growth in the U.S. Assuming that the Ozempic really will have an impact on the market and will probably a longer stay time on that compound than current oral drugs, then going on to another GLP-1, Ozempic. It's hard to imagine with the flat growth of basal insulin in the U.S. of 0%, that that will not turn into a negative number over the next couple of years. Your comment on that one. Thank you.
Do you want me to?
I think we look at a significant price pressure in the U.S. on insulin. When we look at the value of it, I think the delta on price pressure is bigger than the delta we see on volume growth. I think it's actually a positive if it turns out that we have lower insulin growth than we might have expected. That's a testimonial of very strong GLP-1 dynamics where we will win more of that. I would actually welcome that. I think that would be a sign of the strength of actually treating type 2 diabetes based on a GLP-1 based treatment rather than going to injectable insulin treatment. I would welcome that, to be honest.
The only thing I'd say, Lars, is that we have many components. There's channel mix, there's rebate impact, there's affordability initiatives, there's legislative initiatives. There's a lot of things that go into impact the insulin component other than what is another product category that is much more meaningful.
Yeah. We have one more question down there.
Yep. Thank you. Carsten, SEB. For you, Doug, you're the only one with a little bit of a muted outlook here the next couple of years. Do you mind describing when you look at the insulin franchise, you made some initiatives. There's this maximum $99. There's affordable insulin in Walmart. You have a follow-on biologic. Is it fair to say that 2020 could potentially be a much worse year for you in terms of insulin growth than what we have seen in the last couple of years? Just try to give us an idea about how the incremental changes work here with all the new initiatives.
Yeah, I'd first start by saying that flattish growth is something that we're pretty proud of because of the drag that we have in certain components of the business. We're going through a transition period, when you're turning over that much of the revenue in a short period of time, I think we're pretty proud of what we're doing. Now, having said that, I think that the affordability initiatives are just for that affordability. We are not competing against others in that space. We're not competing against our own branded products. We're not trying to post a scorecard about how well we're doing in affordability. We want to make sure we have the right programs for patients, that we widely communicate that.
The majority of patients in the U.S., the vast majority of patients in the U.S., are in some sort of system that works for them today. There's a small amount that are in the healthcare system today, like I said earlier, that are not able to afford it, a small amount. There's another amount that does not have insurance, and there's a few that fall into the cracks. The vast majority of patients are in the system today, and the system's working for them. That's where we compete with the majority of our products. It's not to compete with ourselves.
On the pricing in 2020, not that we guide for 2020 yet, but I think it's fair to say that the competitive dynamics we see will also be there in 2020.
Yep.
There will be continued price pressure.
Yep
On our insulins in 2020.
Absolutely.
Take one more question down there.
Simon Baker from Redburn. Continuing on that theme for you, Doug. 2020 is also the year of the U.S. presidential election, and in a campaign which is being dominated by healthcare, and healthcare which is being dominated by drug pricing, and drug pricing which is being dominated by insulin pricing. How do you see that influencing, and how do you respond to the pressure you undoubtedly going to come under next year? Because from what you've been saying in the previous answer, it seems like this is a communication issue, that the system is nowhere near as broken as some politicians would suggest from what you were saying about the provision within the U.S. How do you respond to that political challenge? Is this longer-term an issue of revisiting the position of rebates, or what can be done to ease through that period?
I'll let Lars comment as well. He's become almost a resident expert. I would say this, the system is misaligned, so it's not that the system is perfect. Every president that I can remember has tried to reform healthcare in one way, shape, or another, and there's a lot of misaligned incentives, which leads to a lot of challenges for people in the U.S. It's not that it's perfect in any way. What I would say is that I'm not here to predict what would happen in presidential campaign. I would say this, is that there is a fundamental debate that's been happening in D.C. for quite some time around, and in particular, the affordability of healthcare and the challenges of that. We play an active role in terms of what we do as an organization. We have an office in D.C.
We're members of PhRMA. Most importantly, we do the right thing with our affordability programs. It's not because we have pressure to do it's because it's the right thing to do. I think that in the end, both sides of the aisle, they're going to continue to play a lot of politics, and I'm not sure where that actually ends up. I would never want to wager a bet there. Lars, you want to I don't know if you have.
It's probably the topic I spent the most time on understanding and following. You have a point in saying that insulin is in the center of that political debate. I also believe when politicians, observers, et cetera, actually look into the underlying market structure and the forces of it becomes very difficult to change it because it's probably the heaviest rebated category in the U.S. healthcare system. It's a category that funds the most of the healthcare system. If you start moving with that, you get a significant funding gap. I feel like we are actually the one that's suffering, besides the patients who struggle in this, by having a significant deteriorating selling price. Our price has been going down for five years.
In this whole change, I think we can still have an attractive business no matter what change is made because we actually take home a significant smaller part than most people think. It's a combination of a free market and regulation, and whenever you combine that, you get some unhealthy gridlock structures compared to when you have a purely regulated market or pure free market. Let's see. We're taking for sure the beating now. I doubt that a change can be much worse than the current market structure. I think we have time for one last quick question, and we'll do that here.
Sachin Jain, Bank of America, and they're never quick, so apologies.
Yeah.
RYBELSUS and commercial strategy, Doug, for the U.S., you didn't really touch on it much. Just a very high-level question. If you could compare and contrast how you're doing this versus Ozempic, are there any differences in the strategy or any things that worked well for Ozempic that you're doing more of? Specifically, if you could touch on the couponing and sampling program?
How we should interpret the very early prescription data, which is driving quite a lot of excitement. Thanks.
I'll start with that. It's very early. I don't think that we should make any I don't know. It's way too early. I think it's too early for us to start looking at that prescription data and make some sort of assessment based on that. Certainly, we're pleased with it. It's way too early. What I would say is that we built a strategy for launch with Ozempic, and we spent a lot of time doing that was built around access, and we are modeling the same. What we don't want is we don't want to send a representative into an office with robust clinical data, get a physician excited about writing a prescription.
They write the prescription, they go to the pharmacy, and they either get it rejected or it's at a list price where that wasn't the intended play because it's not on a formulary. That negative feedback loop that happens could be 12 to 18 months. What we do is we go out and we have this beautiful molecule called Ozempic that right now we're still promoting, and we did the same before we had access with Ozempic. The roadmap that we follow is that we're going to continue to sell Ozempic until we've built enough market access to turn on RYBELSUS in the first position. RYBELSUS will then be in the first position once we get enough access.
What we did that was a little bit different that we learned is that the focus launch, we did bring in about 600 individuals just about five weeks ago, and those individuals were not only trained on the molecule, but they were trained on the early initiation that we're doing. We're out right now with specific targets, with specialists and some primary care reps to build the engagement and the excitement with physicians around the molecule. That's the early experience that we want to gain. As we do that, the plan is to build market access, then we toggle between the two. In a lot of ways, it's the same, but we've improved upon what we did with Ozempic.
On that happy note, thank you for the questions. We break for the regional sessions. Mike, you have some of the logistics.
I have gotten 10 minutes to talk about IO, and that did not do justice for the large geography I am responsible. I am extremely excited that actually, the next 45 minutes, you are going to be hosted by one of my team members. In the front, we have a lady and four gentlemen that are making me look good every single day with the results that they deliver in the various different regions that they are responsible for. We are taking you in two of these three workshops and trying to have the experts try to explain you specifically on each of these geographies, how we do and why we are doing so well.
In room S47, which is basically right to your right-hand side when you go out, you will have Mads from Europe and Ole from Japan and Korea, moderated by Karsten, is speaking to Europe and Japan, Korea region. In this room, you'll have Christine touch upon region China together with Camilla as a moderator, and then across the hall, you will basically have in room S05, you will have Frederik and Andre, together with myself, speaking to Latin America as well as AMEA. You will have about 25 minutes of presentation in each of these workshops, followed by about 10 minutes of Q&A with you, and then another 10 minutes of walking around to the next workshop. If you don't know which and where to go in your little tagline, then you can see which two workshops or breakout sessions you have been assigned to.
With that, we are finished for the session.
Yeah. Good.
Good luck, guys.
Hello there.
All right, everyone. Are you ready to get started on Region China? I am happy to introduce to you our SVP and General Manager of China, which is Christine Zhou. Christine is an expert in China, having worked there for many years, but also worked in the U.S. Christine, welcome. You will give a 20-minute presentation, and after that, we will do the Q&A.
Yeah. Great. Well, thank you very much, Camilla, for your introduction. Good afternoon, everyone.
Good afternoon.
Welcome to Region China session. As Camilla introduced, my name is Christine Zhou. I am the SVP for Region China. A little bit about myself, I am a physician by training. I studied medicine for six years and practiced medicine for six years in Shanghai, China. I have been in the industry for 25 years. I had a chance to work in the U.S. and in Malaysia for 11 years, mainly in the U.S., three years in Malaysia. It is really great honor to lead Novo Nordisk Region China. I am pleased, and also it is a great pleasure to be here to share with you about Region China story. China is the second largest pharma market globally. Really, it is driven by strong unmet medical needs and also supported by the solid GDP growth.
The rise in the middle class with the increasing disposable income really provides improved patient access to the latest innovative medicines. Despite the efforts and the progresses made, diabetes remains as one of the most challenging health situations in China. Currently, there are 121 million people with diabetes. However, less than half of them being diagnosed, only a third of the 121 million people are receiving the treatments, around 16% of them achieving the blood sugar glucose control. As you have heard today, Novo Nordisk strives to really changing the diabetes, therefore making China as an important market for our company, not only for the business potential, but also really for the huge healthcare burden of diabetes in China. With many other markets, it is quite a complex market with huge diversity across the provinces.
The diversity is reflected by the differences in the economic development, as well as the healthcare and medical sophistications, as well as the reimbursement measures at the province level. Therefore, applying the market fit approach at the provincial level is often required. The government is aware of the strong unmet medical needs and has put health in the center of government policies. The government encourages innovation, emphasize on the quality, and also improves access. Three important areas I would like to highlight. The Healthy China Action 2030 provides very clear framework on delivering the specific health outcomes, health goals in China. 15 projects are being rolled out. Diabetes management is one of the 15 projects, which is very much aligned with Novo Nordisk ambition and commitment. It has historically taken a long time to get the products approved by the health authority.
However, looking at this chart, recently, the time to approval has been shortened significantly, particularly past several years. This is really driven by the continuous healthcare reform, and we really appreciate the government's initiatives that they are taking. As a reminder, to ensure broad patient access in China, products need to be reimbursed at a national level, then also implemented at a provincial level, as well as listed in the hospital level. Now, of course, and as you can see from this chart, there are some very promising and encouraging developments to see how fast now the products can be reimbursed, without getting into too much details. Of course, along with the opportunities from the new exciting developments, there are particular two challenges I want to highlight.
In order to balance the healthcare budget and to address unmet medical needs, the central government is also quite conscious of the pharmaceutical pricing. The government has rolled out several cost-containment measures. One of it is the well-known 4+7 model, or we call it a value-based purchasing. Of course, the continued price erosion also is happening along with the provincial bidding. Along with the opportunities coming up in the market, the competition continues to intensify from both local and also multinational companies. Novo Nordisk has very strong presence in China. This year, we are celebrating 25 years of success as well as contributions through our full value chain operations in China. Recently, we have been recognized as one of the top 10 multinational companies, and for the special contributions that we have made to the healthcare development in China.
We are number 8 MNC pharma and number one in diabetes market in China. Our strong presence throughout the past 25 years is reflected by the continuous development of our business. After a stretch of quarters of single-digit growth, we are pleased to see that we have returned to the double-digit growth in the first nine months of this year. As you can see from the chart, the growth is mainly driven by the modern insulin and the next generation insulin, as well as the GLP-1, our Victoza, which is very much aligned with our strategic focus. We have clear strategy, which is called WIN+2025, to sustain our growth and leadership.
We would like to remain as a trusted partner in diabetes area, and we would like to, through our efforts and leadership, to enable at least 60 million patients to be treated by 2025 from currently around 39 million patients with diabetes being treated. We will do so by focusing on the following four areas. Through maximizing our portfolio, continuously driving the commercial excellence, of course, continuously shaping the market, as well as accelerating innovation to the China market. I'm going to walk you through some specifics in next couple of slides on these four areas. The diabetes care market continues to grow in its dynamic fashion. The insulin will remain as a core segment in China diabetes care market. You know the diabetes care market very well, but I'm going to point out a few segments that are very important to Novo Nordisk.
The modern insulin and the next generation insulin segment will continue to grow. These segments are very important to Novo Nordisk to continue to lead in. Human insulin will have its place, but will be challenged by the conversion to modern insulin. The modern non-insulin antidiabetic segment is very different from the other markets you have seen already today. It is an emerging segment in China and driven by the reimbursement and also the new entrants to the market, including the DPP-4s, including the SGLT2s, and the GLP-1s, and including, of course, our Victoza. Traditional oral antidiabetic segment also has a high market share and similar to some other markets. However, the growth of OAD segment is slowing down, including our NovoNorm. This market segment may be the hardest hit by the price volume pressure going forward. Insulin in China contributes to half of the diabetes market.
We have 47% value market share. However, our market share currently is under pressure, mainly driven by the human insulin we are not actively promoting, and also intensified competition in the premix segment. Talking about premix segment, this segment used to be the largest segment in insulin market in China in both value and volume. It now has been surpassed by the basal segment in value. However, it is important to point out that the premix segment will continue to be the largest in volume in next couple of years, and it remains important segment for Novo Nordisk. Basal insulin segment represents a very strong opportunity, as you have already heard from Mike earlier. It is now the largest insulin segment in China in value, and we have 15% of value market share with Levemir only right now.
In line with international operations strategic goal, it is important for us to become the basal insulin segment leader in Region China. It is our goal. Of course, the bolus segment has solid growth, but it's a smaller segment. Novo Nordisk remains the high market share at around 80%. Winning in all three insulin segments is a strategic priority, and we have opportunity to achieve that. Tresiba is our new basal insulin. We launched Tresiba in China, and we are very pleased to have Tresiba listed into the National Reimbursement Drug List. It will be effective January next year. We have established a dedicated basal sales force, and we have a clear strategy to drive Tresiba uptake. Ryzodeg is our new offering in premix market space. As we speak, we are launching Ryzodeg into the cities in China.
We got Ryzodeg approved early, after only 14 months after regulatory submission. We are very excited to see the first prescription was filled over the weekend in Tianjin, China. Ryzodeg will further strengthen our position in the premix segment. However, the real uptake will have to wait until the National Reimbursement Drug List inclusion. The GLP-1 segment represents another very important opportunity, and driving GLP-1 growth is the priority for International Operations as well as Region China. Victoza has done well in Region China, particularly after it is included on National Reimbursement Drug List in late 2017 and led by our Camilla. We have expanded the market access and our investment in commercial as well as commercial focus. We have grown Victoza by 41% over the past three years. We have expanded GLP-1 class from less than 1% to currently 2% in China diabetes market.
We are maintaining the Victoza market share in GLP-1 class over 90%. It is only the beginning for both Novo Nordisk GLP-1 franchise and also for the GLP-1 class in China. We are seeing the new entrants come to the market, including Trulicity, and in next couple of years, perhaps biosimilars will come as well. It is very important for Novo Nordisk to keep driving the commercial excellence, starting with our dedicated field force, as well as expanding our GLP-1 franchise by launching Ozempic and also RYBELSUS in next couple of years. Doug alluded earlier that the Chinese GLP-1 market is in its infancy as compared to other markets. If the market dynamics develop as they have been globally, there is expectation that we can see the China GLP-1 class continuously grow in the diabetes market. Biopharma market in size is modest.
However, we are seeing a good uptake. In China, currently, the business contribution of biopharm business is not that significant yet. However, the biopharm franchise is very important to the patients we serve in China. We have NovoSeven and Norditropin marketed in mainland China, and we are seeing the good uptake in terms of growth. The key things for growing the hemophilia market in China really is to addressing the access challenge, as well as to bring in the full portfolio, and we plan to do that. Obesity is one of the strategic focus areas for not only international operations in North America, but also the whole company. Obesity, it is a growing problem in China. However, the market is yet to be established. We have large population right now in having obesity. The good thing is that the government actually is aware of that.
The government advocates individuals by paying attention to their weight. The guidance is included in the Healthy China Action 2030. What this means is that this gives us a great opportunity to Novo Nordisk to be a part of the solution. This gives us a great opportunity to work together with the government, with the other external stakeholders, actually, to work together to build a market and bring our innovative medicines to China and to address the obesity challenge. In addition to our core contribution of innovative medicines. Because diabetes challenge is a scale of problem. Novo Nordisk has been working very closely with the government, with professional societies, with the healthcare providers, as well as our partners, to shape the market, to build an ecosystem of addressing the diabetes challenge. To make sure enabling diabetes early diagnosis, proper treatment, and enable patient to have better control.
Starting from 2017, we have contributed to the screening of 640,000 people at risk of developing diabetes. 280,000 people who have diabetes, at a risk of complications. We have been contributing to the initiatives of building diabetes management infrastructure at the county hospital level, also building the capability by training the GPs. We are partnering with the digital health companies to build digital health solutions to help doctors also to empower patients to better manage their disease. For example, there's a program called Blue Connect that is an app-based digital platform. We are working with a company called WeDoctor. That platform connects the healthcare providers and their patients. That will offer an opportunity for the patients to have online, offline consultation and to have better adherence, as well as better control. Coming back to our core contribution of innovative medicines.
Novo Nordisk is committed to continue to drive the growth and the quality of that growth, which means that we will continuously bring in the innovative medicines. Right now, we have 15 products approved and launched in China, Region China Market, and we are going to accelerate our innovation and through the following three things. We are going to accelerate our innovation by bringing the products to China market faster. We are going to diversify our innovation by bringing the innovative medicines that are beyond the diabetes, and we are going to accelerate our innovation through simultaneous submission. Right now within China, the clinical development has been integrated into the global clinical development. This strategic decision has enabled us to deliver a simultaneous submission as a possibility, and also the external environment is ready for that. You have heard the introduction today that LAI287 is our weekly injection insulin.
This could very well be the first innovative medicines within Novo Nordisk that the Chinese patients may be able to access to in the almost similar time as the patients outside China to access to, because the teams are working very diligently and working very closely to strive for the simultaneous market authorization submission. In summary, as you all know, the pharma market in Region China continues to grow, and Novo Nordisk is well-positioned to capitalize the growth opportunity. We have a holistic and a clear strategy to drive sustainable growth in the long term, and we have the great pipeline of innovative medicines. We focus on maximizing the portfolio and win in all major segments that is beyond insulin and beyond diabetes.
We would like to remain as a trusted partner, we will continue to work with the government, healthcare providers, professional societies, and our other partners to make sure join hands, build an ecosystem, really to drive the change to defeat diabetes and other serious chronic diseases. With that, I thank you very much for your attention.
Thank you, Christine. Now we are ready for some questions. I think I can help keep track on who asks first, and then you can answer the questions, Christine. That would be great. We'll start here. Okay, Michael.
Is it on? Yeah.
Yeah.
Michael from Nordea. A bit on the NRDL inclusions. They've been extremely volatile historically. You showed on this slide that it'll take two to four years for Ozempic, four to six years for RYBELSUS, to get fully in the market. I guess that also indicates reimbursement and inclusions. How good transparency do you have to this? Also in respect to that, how good transparency do you have to competitors getting on the list? We know that Trulicity is also likely getting on the list. I don't know when, but at least there's a chance for it. Also talk about potential competition coming in before you coming in with Ozempic.
The timeline, two-four years, four-six years, is the launch timeline that we put it there. In terms of the transparency of National Reimbursement Drug List, we are seeing the increased frequency of the NRDL review update, which is evidenced by this round of National Reimbursement Drug List review. This actually was only after the last review happened in 2017. Now, the future when the NRDL will be reviewed again remains uncertain. What we would hope that the government would increase the frequency of the review, at least following the current guidance, but it remains unknown. The one thing that is actually quite informed is the government also is looking into a dynamic, a review mechanism. If that happens, we can see that more frequent NRDL reimbursement review will become a reality. You asked about Trulicity.
Trulicity was approved in late February, and early this year, the government did roll out the specific criteria of the products being eligible to be evaluated to this round of NRDL. The cut-off date was the end of 2018, therefore, Trulicity missed this round of evaluation. Yeah.
Do you foresee significant competition from Trulicity in the next two years?
I think, as I mentioned earlier, right now, GLP-1 is still in its infancy in the China diabetes market. At this point, Victoza has over 92% value market share in GLP-1. If I understand you correctly, you're asking about the competitive landscape in the GLP-1 space. In that case, actually, in the last CMD day, Byetta was already on the market, along with the local GLP-1 that is injected three times a day, called the beinaglutide. We have not seen them have the traction yet at this point. In this round of NRDL, there are a few products are eligible to be evaluated, including the four GLP-1 products, excluding Trulicity. The NRDL review result has not been published, we do not know what the result is, we cannot speculate on that. Yeah.
Very good question.
Yeah.
Thanks. There's a question over here.
Thank you. It's Mike Leuchten from UBS. At the moment, the insulins are outside the scope of VBP. Your visibility on when they might be included. Is there any visibility as to when, say, volume-based pricing might come into the category?
Yeah. When the biologics will be included in the volume-based purchasing remains unknown. Yeah. Because the government has not mentioned that. You are right, the current VBP, the scope is limited to the chemical products.
Very good. Thanks. We have a question here.
Thanks. Naresh Chouhan from Intron Health. Could you just give us some color around the biosimilars? There are 20 biosimilars expected to launch by 2023. How many of those are basals? How should we think about the uptake, given there are 15 other insulin manufacturers that only have a third of the market? They're clearly not taking huge amounts of share. Just a bit of color around the impact of biosimilars in-
The biosimilars have been on the market for many years, including the human insulin and biosimilar products. We can see that at this point, if you look at the market, many physicians and the patients, they do prefer branded products, given the proven efficacy and the consistency on the quality, and so on and so forth. Biosimilars does have a place in the diabetes management. However, biosimilars uptake is very different from the chemicals, and the biosimilars, when they introduce to the market, they will need to run the clinical trials first to get approved, and also they need to invest in marketing and sales to drive the uptake. What's important for Novo Nordisk is that we need to make sure continue to drive our commercial excellence, and which you have seen the opportunities that we have in all the three segments.
In the meantime, we need to make sure continue to accelerate innovation and to China market, to continue to stay ahead of competition.
Very good. Thanks. A question down here.
Simon Baker from Redburn. You've given us a lot of useful color on the evolution of sales within China. Perhaps you could give us an idea about the evolution of the relative profitability of China compared to the group and other regions. Other companies in the European pharma sector, not those as diabetes-focused as you, have said that the profitability of China has now reached, and possibly slightly exceeded, that of Europe. I wonder if you could give us some color on where Novo stands in that picture. Thank you.
We actually have a session also in the afternoon where we get into that a little bit, not in detail, but roughly as a span.
Yeah.
Karsten will talk about that.
Yes.
What I can share with you is that it's very important for us, and I still remember when Lars came on board as the CEO, he highlighted his three priorities. First is to drive commercial excellence, the second one is to raise the bar on innovation. The third one is to drive the cultural evolution. For us at Novo Nordisk, what's very important is first, we need to have the patient front and center for everything we do. We need to accelerate innovation. In the meantime, we also need to make sure stay agile, to be connected to the external environment to drive our commercial excellence. With that, I do believe that we can not only actually bring innovative medicines, but also continuously and consistently to drive our business by profit or by the top-line growth.
Okay. We will get a little bit more into the margin question later in the day also. There's a question over here.
Hi. Marc Booty from Pictet. You referenced the local player with the three times a day GLP-1. When would you expect local players for daily or weekly injections in the GLP-1 space?
There are some expectations on the biosimilars coming to the market and in the GLP-1 space. We cannot comment on the competitor's information. I think along with the expiry of our patent, and there's an anticipation on the biosimilars coming to market.
Yeah. There's a question behind there, and then over here, and then there. Yes.
Marco Sormani, Varenne Capital Partners. I have a question concerning the obesity. In how many years do you see a potential development of the market also in China? Thank you.
Currently, we don't have obesity treatment launched in China within Novo Nordisk. We do have plan to start our sema-obesity trial pretty soon. What's important is, at this point, and I think as Camilla alluded earlier, there are challenges on making obesity as a disease and to help obesity patients in other markets. The similar challenges we observe exist in China. What's important is that we work together with the government and to actually build the market, and in the meantime, and we start the clinical development of our sema-obesity in China. We can expect it in next couple of years.
Thanks.
Thank you. It is Matthew Weston from Credit Suisse. You highlighted the government program on Healthy China, but the other government program is to try and get 70% of, I think, biologics manufactured domestically for China over the next five to seven years. I wondered, as the market grows, particularly for biopharma within diabetes and obesity in China, whether or not you feel the need that you are going to have local manufacturing, and if so, are there any plans for that given the lead time it takes?
We have our Tianjin site. We have a large manufacturing site in Tianjin. Actually, that's one of the 5 strategic manufacturing sites in Tianjin. Currently, site Tianjin manufactures some insulin products, and we do hope that in the next couple of years, so we can localize the manufacturing of some products in China.
Yeah. Thank you.
With GLP-1, I wonder about the standard. Do you have plans to make domestic manufacturing sites?
I cannot comment on the future plan.
Thanks, Camilla. Pete Verdult with Citi. Just on the basal insulin market in China, can you just remind us today where we are in terms of price points, brand versus biosimilar?
With Tresiba launching in January, what is the commercial strategy here? Are you going with a premium? Are you level with Levemir? Just a bit more detail about the dynamics of that basal insulin market in terms of price points and market strategy.
There is a biosimilar glargine on the market, largely, the price gap between the current biosimilar to the basal insulin is about 15%-20%. For Tresiba, our price is largely similar to the Levemir price.
Yeah. Very good. One last question up here, and then we need to go to the next session.
Up here or down here? Down there.
Down there. Yes.
Down here.
That's okay.
All right. Thanks. I was just thinking about your geographical reach in China. Are you present in all tier one, tier two, and tier three cities? Are there any unexplored? You had a lot of new growth coming in because of new launches, new innovations.
How about broadening your footprint in China? Is that also something you can gain more growth from? Just a quick question on Norditropin, which in China looks like a rounding error. What's the reason for this?
Yeah. To answer your first question, we deploy our field force based on market fit approach, depending on the product life cycle. For newly launched products, we would start from the key market first, and we do have broad footprints for our insulin products. To answer your second question, Norditropin, we just launched Norditropin in China last year. This is a great product. The best-selling product worldwide for 30 years, but we just launched. It is a DKK 4 billion market, and with an established local company, has been there for 20 years. We believe our brand, and we are investing.
Thanks a lot, Christine. We will have to end the session here. If anyone has a question, Christine is also here after the day, after 5:00 P.M. Thanks again. Please take a look at your map where you are and go to the next session.
Thank you. Welcome. All right. Yes. Welcome to this session. We're going to talk about Region China, and to do that, we have, of course, invited our SVP and Head of Region China, which is Christine Zhou. Christine has worked for many years in China, but also in the U.S. We'll start with approximately 20 minutes presentation, and after that, there will be opportunities for you to ask questions. Welcome, Christine.
Thank you, Camilla. Good afternoon, everyone. Welcome to the Region China session. As Camilla mentioned, my name is Christine Zhou. I'm the SVP for Region China. A little bit about my background. I'm a physician by training. As you can see that I'm a Chinese. I'm a physician by training, studied medicine for six years, and had a six-year clinical practice in Shanghai, China. I have been in the pharma industry for 25 years, and I had a chance to spend 11 years working overseas, mainly in the U.S., and three years in Malaysia. It is such a great honor to lead Novo Nordisk Region China, and I'm also pleased to have this opportunity, and it's a great honor to share with you about Novo Nordisk story in Region China. China is the second-largest pharma market globally.
That is driven mainly by the strong unmet medical needs and supported by the solid GDP growth. As a rise in the middle class with increasing disposable income, this provides a better patient access to the latest innovative medicines. Despite the efforts and the progresses we made in diabetes management, currently, there are still 121 million people with diabetes in China, less than half of them being diagnosed, only a third of them receiving diabetes treatment. Around 16% of the 121 million people with diabetes have reached the blood sugar control target. At Novo Nordisk, we strive to change diabetes, therefore, this has made China a very important market to Novo Nordisk, both from business prospect perspective as well as the helping addressing the diabetes challenge perspective. As with many other markets, China market is a complex market, with large diversity across the provinces.
It is reflected by the differences both in economic development and also the healthcare and the medical sophistications, as well as the different access level in the province. Therefore, applying the market fit approach at the provincial level is often required. The government is aware of the strong unmet medical needs and has put health in the center of government policies. The government encourages innovation, emphasizes on quality, and also improves access. Three very important things I want to highlight. The Healthy China Action 2030 provides a clear framework on delivering the specific ambitious health goals. Currently, 15 projects are being rolled out. Diabetes management is one of the 15 projects, which is very much aligned with Novo Nordisk's ambition and commitment. Historically, it has taken many years to get drugs approved by the health authority.
However, recently, the time to approval has been shortened drastically, particularly over the past few years. This has really resulted from the continuous healthcare reform, which we are very pleased to see that the government has taken the proactive approach to make the progress. As a reminder, to ensure broad patient access in China, products need to be reimbursed at a national level and also reimbursed at a provincial level, and are listed into the hospital level. Recently, there has been quite exciting and positive developments without getting into too much details, and we can see that how fast the products can be reimbursed, particularly in past two to three years. Of course, along with the opportunities from the new developments, there are two specific challenges I would like to highlight. In order to manage the healthcare cost, the government authority is also conscious of the pharmaceutical pricing.
They rolled out some cost containment measures. One of that is the well-known 4+7 model, or we call it volume-based purchasing. Of course, pharmaceutical products pricing continuously erode along with the routine and the bidding activity. We see the growing opportunities in China market and the competition continues to intensify from both local and multinational companies. Novo Nordisk has a strong presence in China. This year, we are celebrating our 25 year of success and contribution through our full value chain operations in China. Recently, we have been recognized as one of the 10 MNCs for the special contributions to the China healthcare industry development. We are the number 8 MNC pharma, and the number 1 in diabetes market in China. Our strong presence is reflected in our continuous business growth year-on-year.
After a stretch of quarters of single-digit growth, we are pleased that we have returned to the double-digit growth in the first nine months this year. The growth is mainly driven by modern insulin and the next generation insulin, as well as by GLP-1 product, which is Victoza. This is very much aligned with our strategic focus. We have a clear strategy to sustain our growth and the leadership. We call it WIN+2025 strategy. We would like to remain as a trusted partner in diabetes area, and we would like to strive to see through our leadership and joint efforts to enable 60 million patients with diabetes to be treated by 2025, from currently only 39 million patients being treated.
We will deliver that through the focus on the four areas, and maximize the portfolio, continue to drive commercial excellence, and shaping the market, as well as accelerating the innovation to the China market. I'm going to share with you some specifics on these four areas in next several slides. Yeah. The diabetes care market in China continues to grow in its dynamic fashion, and the insulin will remain as a core segment. I know that you know diabetes market very well, and I would like to just highlight a few important segments and to Novo Nordisk. The modern insulin and the next-generation insulin market will continue to grow, and these are the important segments for Novo Nordisk to continue to lead in. Human insulin will still have its place, but the human insulin will be challenged by the conversion to modern insulin.
One segment is different to other markets, as you have heard today, is the modern non-insulin antidiabetics market. It is an emerging segment in China diabetes market, driven by the reimbursement and the new entrants, including the DPP-4s, SGLT2s, and the GLP-1s, including our Victoza. Oral antidiabetics have large market share similar to other markets. However, the OADs growth is slowing down, including our NovoNorm. This segment may be the hardest hit by the pricing volume pressure going forward. Insulin contributes to 50% of the diabetes market in China. Novo Nordisk has 47% value market share. However, currently our market share is under pressure, mainly due to human insulin we are not actively promoting, and also increased competition in the premixed segment. Talking about the premixed segment in China insulin market.
As you know, premix used to be the clear leader in insulin segment in both value and volume. Now has been surpassed by the basal insulin segment in value. However, it's important to remember that the premix insulin segment in China will continue to be the leader in terms of volume, and this continues to be an important segment for Novo Nordisk. The basal insulin segment presents a strong opportunity. Yeah. Currently, we have 15% value market share with Levemir alone. In line with the international operations strategy, becoming the leader in basal insulin segment is our important goal in Region China. Bolus insulin segment has solid growth, but is a smaller segment. Novo Nordisk maintains the high market share at around 80%. Winning in all three insulin segments is a priority for us, and we have great opportunities to achieve that.
Tresiba is our new basal insulin. We launched Tresiba to China market last year. We are very pleased to have Tresiba listed into this year's National Reimbursement Drug List with effective January 2020. We have built a dedicated basal insulin sales force. We have clear strategy to drive the Tresiba uptake. Ryzodeg is our new offering in the premixed space. We are very pleased that we have got Ryzodeg approval early this year, only 14 months after our regulatory submission. As we speak, we are launching Ryzodeg to the many cities in China. We were so excited, as Mike shared with you earlier, that over the weekend, we got the first prescription filled and in Tianjin, China. Ryzodeg is going to strengthen our position in the premixed space, but the real uptake will have to wait until the next NRDL listing.
GLP-1 market presents another very important opportunity. As you have heard today from both Mike and Doug, that driving the GLP-1 market growth is an important strategic priority for international operations as well as for Region China. Victoza has been doing well, particularly since the inclusion of the National Reimbursement Drug List in late 2017, and thanks to Camilla, and with expanded market access, and also the investment in the commercial excellence and focus, we have grown Victoza by 41% over the past three years. We have expanded the GLP-1 class in China from less than 1% to currently 2%. We are maintaining Victoza's market share in the GLP-1 class over 90%. However, this is only the beginning for both Novo Nordisk GLP-1 franchise and also the GLP-1 class in China market.
We are seeing the new entrants coming into the market, including Trulicity, was approved in late February this year. Therefore, it is very important for Novo Nordisk to continue the commercial excellence, starting with the dedicated sales force. In the meantime, to expand our GLP-1 franchise by launching Ozempic and RYBELSUS in next couple of years. As you have heard from Doug, the Chinese GLP-1 market, compared to other markets, it's in its infancy. If the market dynamics develop as we have seen globally, and there are certain expectation we can see that the GLP-1 class increases the market share in diabetes market over the next couple of years in China. Biopharm business is modest in market size, but we are seeing the nice uptake. Although the current biopharm business contribution to total Region China, Novo Nordisk Region China business contribution is not big.
However, it is very important to the patients that we are serving in Region China. In mainland China, we have NovoSeven and Norditropin launched in the market. For the hemophilia markets, two important thing that matters a lot. One is the continue to drive the patient access in hemophilia segment, and we also plan to bring in the full portfolio of hemophilia to help patients in China. Clearly, obesity is one of the strategic components, not only for International Operations and for North America, and for the entire organization. Currently, obesity is a growing problem in China, similar to other markets, but the market is yet to be established. As you can see from this slide, we have large population with obesity in China. What is very important, and a very good thing, that the government is aware of that.
The government actually encourage individual pay attention on their weight. That is included in the Healthy China Action 2030. What this means is that it gives us, Novo Nordisk, a great opportunity, and to be a part of the solution, and to work together with the government and also external stakeholders in next couple of years to actually build the market and bring the innovative medicines, and to address the obesity challenge in next couple of years. In addition to our core contribution of innovative medicines, and because diabetes is really a challenge of the scale of the problem, so Novo Nordisk has been working with government and also the external stakeholders, including professional societies, the healthcare providers, and also our business partners, working very closely to shape the market and build an ecosystem to tackle the challenge of diabetes.
To enable early diagnosis, proper treatment, and also better control of the patients. Since 2016, we have screened 640,000 people that at high risk of diabetes, 280,000 people with diabetes, but at high risk of complications. We have been contributing to the initiatives of building the diabetes management capacity and capability, including the county hospital establishing the endocrinology department, and also GP training. We are partnering with the digital health solution companies to develop digital health platform to enable patients better manage their diseases and to improve adherence, as well as to achieve the desired outcome. Coming back to our core contribution of innovative medicines. We at Novo Nordisk are committed to continued growth and also the quality of that growth, which is through the innovation and partnership.
Currently, we have 15 products approved and launched in China, and we would like to deliver the core commitment and innovation by accelerating our innovation to the markets, which means to get products to the market sooner, and also to diversify our innovation, which means we are bringing the innovative medicines that are beyond diabetes. Another very important thing is that we are striving for achieving simultaneous regulatory submission. Just recently, Region China clinical development has been integrated into the global clinical development program. This strategic decision has enabled the simultaneous regulatory submission possible. Specific example is LAI287, as you have heard earlier today, that is a once-weekly insulin, and the teams are working very diligently on this to strive for simultaneous regulatory submission.
LAI287 could be, very well could be, the first Novo Nordisk innovative medicines that Chinese patients can access to in the same time as the patients outside China. This is our commitment. To accelerate innovation, diversify our innovation, and also strive for simultaneous submission. In next couple of years, you will see the portfolio you reach in China, that will be more diversified and will be innovative. In summary, as you all know, the China pharma market continues to grow. Novo Nordisk is well-positioned to capitalize that. We have a holistic and clear strategy to drive sustainable growth, and we continue to maximize our portfolio and win in all major segments that are beyond insulin and beyond diabetes.
We at Novo Nordisk would like to remain as trusted partner, continue to work with governments and professional societies, healthcare providers, and other business partners to build an ecosystem to drive the changes that will defeat diabetes and other serious chronic diseases. With that, I thank you very much for your attention.
Thanks a lot, Christine. Thanks for the update. Now we have time for questions. I can keep an eye on who has questions, and then you're the best one to answer. We start with Martin.
Martin Parkhøi, Danske Bank. In the other presentations today, I think we have got a little bit more aspirations on targets and goals to reach than I think that you have something winning 60 million patients. Why don't we get any kind of aspirations on your expectations for your basal share, which I think is, you're investing a lot in it. You're saying you're in it to win it, I think. Does that mean you expect to be the largest in the basal insulin market within the period until 2025? Then also going to the GLP-1. I've just been into the [EMEA] and Latin American presentation. They are expecting to double the GLP-1 sales within the next three years. We don't really get any feeling of where you are in China.
Thank you for your question. As alluded earlier, we are not giving out the guidance. The formal guidance will be communicated in February next year for the group guidance. What I can share with you, though, we do have our goal to become the basal insulin segment leader. We have Tresiba as a great opportunity for us to achieve that. As you said, we actually deployed a dedicated field force who have a clear strategy to drive the uptake. At this point, because the National Reimbursement Drug List implementation will only start next year, we cannot speculate how fast the uptake is. In the GLP-1 market, we are clearly the leader in GLP-1, and we are expanding GLP-1 segment.
We do have clear plan to launch Ozempic and RYBELSUS into China in next couple of years to continue sustained leadership.
Yeah. Question here.
Thank you very much. Wimal Kapadia from Bernstein. Could you talk a little bit about the competition from local companies? When I look at the market share trends, companies like Gan & Lee are doing pretty well. They seem very credible, and they have a relatively long list of pipeline, both in insulin and GLP-1, and there are other companies. How much of a threat are these companies long term? Thank you.
I think if I understand you correctly, your question is about biosimilar challenges.
Sorry. Also am I incorrect in saying that these companies are also developing innovative products themselves? The threat from both aspects, please.
Yeah.
Thank you.
Yeah. Sure. For the biosimilar products heavy on the market for a couple of years, including human insulin, as you mentioned, and from the local manufacturers. Currently, there are many physicians and the patients, they still prefer a branded products, and then given with the proven consistency and efficacy, but the biosimilars does have a place and in achievement. What we can see is for the biosimilar manufacturers, it does take time for them to conduct clinical trials, and once they're approved, and it does take them to invest in sales marketing to drive the uptake. That is the expectation. For Novo Nordisk, and we are currently the leader in the market, what's important for us to continue to have the commercial excellence and continue to accelerate our innovative pipeline launch in China so that we can stay ahead of the competition.
We have a question over here. First, this gentleman.
Thank you. Florent Cespedes from Société Générale . My question is on basal insulin. Your goal is to become the leader on this segment. Could you share with us how you want to achieve this? Is it a market expansion or do you expect to grab market shares from the actual leader on this field? Thank you.
As I answered the question earlier, similar is that now we have a chance to have broader market access, which Tresiba is listed into NRDL, through broader access, it does take time. As I highlighted earlier, when the product's listed onto National Reimbursement Drug List, we also need to make sure the provinces implement that. Also, the hospitals were listed innovative medicines. It is a long process. Make sure we continue to optimize the access status that we have with Tresiba. In the meantime, we have built a dedicated few folks who will need to make sure and actually drive the commercial excellence and to drive the uptake. By the way, Tresiba is really I'm a physician by training. Tresiba is by far the greater product and for helping patients. It offers great value to the patients.
That's good. I see a gentleman over there, and then we can take you again, Martin, because you had one question already.
Thank you. Eric Le Berrigaud, Bryan Garnier. 4+7 does not impact your business yet since it's not impacting injectables and insulin in particular. Where do you see that kind of threat playing out in China? Is it more a short-term or medium-term issue?
Yep. 4+7 is a model that the government wants to make sure that contains the healthcare cost by offering the quality products. As you said, and at this point, given the nature of 4+7 model, Novo Nordisk is not impacted yet because the scope of 4+7 is limited to the chemical products. However, when or whether biotech products will be included in the similar model as 4+7, it's not certain. It's not known. This is initiated by government and it's up to the government decision.
Martin Parkhøi again. Two questions. On premix pricing, we know one of the beauties with the basal segment is that it's much higher daily treatment price in China than compared to the premix segments, as I understand it. Ryzodeg include the Tresiba component. Could you talk a little bit to the pricing of Ryzodeg versus NovoMix? Now you have treated the first patient, how much did they pay? Also when it entered the National Reimbursement Drug List. The second question, just to the growth this year, because you have seen a phenomenal pickup in growth this year. In your other regions in IO has been driven by new products. You only have Victoza. Are there any extraordinary factors which have been driving this growth? Is it just improved commercial excellence? What is exactly has been driving it?
I think you have multiple questions. Let me try to answer one by one. The first is about when the NRDL will list Ryzodeg, right?
The price difference.
The price difference. I generally cannot comment on the price information at this point, but what I can share with you is the price is similar to the price in other regions, and the premix price actually is quite reasonable in China. Daily cost is quite low. The premix segment is reimbursed. That's one, the information on price. The second question is about.
Our growth year-to-date, whether it is internal and driving commercial excellence or external factor. Yeah. I would say you're talking about GLP-1, I think specifically mentioned that Victoza, right? I think the external factor is that actually the medical society recognizes the GLP-1, the value of GLP-1 that offers through diabetes management, as I shared earlier. Actually, the diabetes management situation in China is not ideal. I think slowly but surely, after Victoza has been listed into NRDL, I think through the efforts, the medical society is realizing the GLP-1 value. I think that is the external factor and that helps the patients. Internally, of course, as you said, and we are driving the commercial excellence and for market excellence.
Yeah, because it's not only Victoza, because the insulin growth has increased quite rapidly also this year. I was also maybe speaking a little bit to that. If there's anything extraordinary there, has the market picked up, because it's much higher insulin growth this year than historically?
Yeah. I think as Novo Nordisk is a leader in the market, we are trusted partner. The trusted relationship counts a lot as well. This year we do have increased the commercial investment and also continuously driving the commercial excellence.
Yeah.
I think that's the key factor.
Also that the insulin market in general has picked up, and actually from the IQVIA data
Yeah
There is a double-digit growth in the insulin segment.
Yeah.
Also growing, as you saw, and Christine mentioned, in total is a little bit faster than what we do.
Mainly because of the human insulin component where we are losing share.
In general, the market has been picked up and the government has had a very strong focus on driving also treatment of diabetes also in lower tier segments. That might also help fuel the insulin growth to some extent. We have a question over here I see.
Thank you. Jimmy from Investec. A quick question on GLP. You launched Victoza relatively recently, you mentioned that Trulicity was approved in February. I'm just wondering, when Ozempic comes to the market, how are you going to manage that GLP strategy, GLP-1 strategy?
Victoza was launched in 2011 and was listed into the National Reimbursement Drug List in 2017. That's the facts. Yeah, Trulicity was approved in late February. Yeah. I think if I understand your question correctly, is you're asking about the GLP-1 competitive landscape, the dynamics. Is that right? Yeah.
Yeah, also our positioning strategy when Ozempic comes on the market.
Yeah. In a nutshell, as Doug alluded earlier, the GLP-1 segment in China is still quite small. In its infancy, it's only in the beginning. There is room for us to continue to actually drive the GLP-1 growth because the GLP-1 product offers great clinical benefits to the patients. For us, our strategy is to make sure continue to actually optimize our access, drive the commercial excellence to grow Victoza, in the same time, to bring accelerated development of Ozempic and RYBELSUS in China. That is our strategy. We do believe that different medicines offers different benefits to the patients, driving the market access is also very important. We are very closely monitoring the NRDL listing situation, our strategy is to make sure accelerate the pipeline development, also in the meantime, to drive the access.
With that, we believe that we can continue to actually sustain the leadership position in GLP-1.
You can say there are two types of markets that we are working with when we are launching Ozempic versus Victoza. There are markets where we get reimbursement in one go, and then we go all in on Ozempic in general for all new patients, so that they can get the benefits of Ozempic, but not trying to switch Victoza because some patients also enjoy Victoza and the benefits that that has. There are other markets where we only get gradual reimbursement, and there we take it more of a stepwise approach. Like you've seen in the U.S. In China, of course, it's a little bit of a mix between the two models because we will have reimbursement if everything works out well, then the reimbursement will open at some point, and we might get reimbursement.
There is also a potential to get reimbursement on a more sort of a local level, and have also out-of-pocket pay. It is a little bit of a different model. That corresponds more to the U.S. model until we get the full reimbursement in that case.
Yeah.
Yeah.
We also believe there's a big volume there in the patients. The diabetes is really under-diagnosed and untreated.
Yeah. Absolutely. A question over here, please.
Holger Blum, Patinex Management. It seems that China is catching up in terms of importance for regulatory trials. Do you foresee also in the future China to emerge as a center of excellence in R&D? Let's say if regulatory restrictions might be less tight in certain areas compared to Europe?
Can I clarify your question? You mean the China as a country?
China as a country that you conduct clinical trials, stem cells in patients.
Yeah.
Anything like that.
That's a great question, actually. China as a country, we have seen tremendous progress in the regulatory reform front. Early this year, China has formally become the ICH member, and which provides the country great opportunity to actually harmonize the regulatory and the measures along with the ICH members. This provides a very good opportunity for China to lead in several fronts. It is possible. It's yet to see, because then we need to observe the progress then moving forward.
Yeah. At this point in time, we don't have plans like that, but we do have our research center in China that, of course, are into also new technologies and see how we can adapt those in the future. It's one of the research centers we have. We have, of course, also research centers in the U.S., in Oxford, and then here in Denmark. Question here?
Maybe it's a little bit too early to push, but just thinking about the potential for reimbursement of obesity medications more broadly in China. Have you had any high-level discussions about how the government and regulators think about obesity as a disease, and whether they would be relatively receptive when you bring a product to market?
At this point, we have not had such discussion, but as I shared earlier, the government is aware of the risk of obesity, overweight. The government actually has paid a lot of attention, including that managing weight in the Healthy China 2030 Action Plan.
Yes. I'm just looking around to see if we have one last question. Otherwise, I would say thanks a lot to you, Christine, for presenting Region China. Then to the rest of you, there's now a break until 3:30 P.M. where we will meet back in this room. Thank you.
[Break]
Ladies and gentlemen, welcome. I hope you had some excellent workshops. Welcome to the final session. The best things, as we say in Denmark, always come last, and that is, of course, emerging therapies. The things that are going to keep the company growing way beyond even the patent expiry of semaglutide in the '30s. With me, I have our Senior Vice President and Head of Global Drug Discovery, Professor Dr. Marcus Schindler. We're not in Germany, we don't need to say it like that. I will actually introduce the topic, it will be Marcus who entertains with most of the slides about the technologies, the biologies, the ways we are moving towards in our research departments. This is the usual disclaiming statement.
What you have up here is really saying that R&D investments in the company to sustain leadership in diabetes, obesity, delivery devices, and a strong position in biopharmaceuticals will need to stay there over time. We will continue to invest. There are areas such as the adjacent metabolic areas to diabetes and obesity, namely NASH, cardiovascular disease, and chronic kidney disease, where you should expect to see increased investments. On the platform technology side of things, well, it's a well-hidden fact that Novo Nordisk has been working on stem cell therapies for 20-plus years. Marcus will today give you somewhat more granularity on that molecular platform or treatment platform for the first time ever at a capital markets day.
If we look into the investment pieces of our R&D platform or organization, you should expect to see us grow the amount of clinical assets that we have in the phase I to III pipeline considerably in the years to come. That will be actually even disproportionate to the amount of dollars invested in R&D because of the efficiency gains and the modern technologies, digitalization and so on, that are being deployed in the R&D unit. That we can discuss later, the intention is to grow sizably the portfolio. The way we will more specifically do it is maybe move from having a industry-leading likelihood of success per phase of development. What you have here on the right-hand side is the range of industry success rates from the given phase all the way through to market.
These are validated data from the Centre for Medicines Research, and what they show is that Novo Nordisk is actually the top company for each phase, showing that we have had lower attrition rates than the industry over the past decade or decade and a half. What we want to signal with the blue arrows pointing downwards is that with the advent of biomarker-based readouts early on in clinical development, we actually are willing to sacrifice projects, i.e., kill them early if they're not competitive and differentiated versus industry. We'd preferably do that in phases I and II rather than in phase III, where we would hope to continue to have a 100% hit rate going forward. That is a forward-looking disclaiming statement, but that is the intention based on the things we are doing in translational science, translational medicine, and so on, between research and development.
The last thing I will say is just to note that the way that we are driving the biological adjacencies, CVD, NASH, CKD, and so on, is actually by leveraging and spearheading our way into those areas by the use of our wonderful semaglutide molecule. It gives us experience base with key opinion leaders, with investigator sites, and with a better understanding of those therapeutic areas than if we had nothing to offer from the get-go. That is a bit in contrast to the old days, where we ventured into immuno- oncology and immunomodulation in rheumatoid diseases without truly understanding what it was all about. We believe it's different this time, I think, Marcus, we need to talk about our core capabilities and where all of those take us.
Thank you very much, Mads, and warm welcome to our very analog version of a drone video. We'll lift you off and hopefully broaden your horizon. Most importantly, we're not losing touch with ground control. We are the leading biologics company in our space, and this will remain so. We're working very hard to keep a cutting-edge science. You've heard already what we're already doing in the oral space. That will continue, and I think you will see actually more exciting developments in this space coming our way. There is, however, a world outside of biologics, right? It is important that we can target ideally all the targets out there, because our patients really do not care whether we are very good at one particular technology or another. They want to see the best medicines from us, and this is what drives us as scientists, obviously.
Over the last couple of years, we've made significant investment, not only in the oral space of biologics. Just as a very short anecdote, I've just been to Boston to some leading scientists at the Whitehead Institute, and they said, "Well, thank you very much, Novo Nordisk. Now we need to rewrite our textbooks because we have written there that biologics cannot be applied orally." We have changed it, and I just think if we explore this further and anticipate what is hopefully just around the corner, I think we've come a long way. We're investing heavily in stem cells, and you might have heard about a new organizational construct, transformational research units. Units with a high level of autonomy that act, behave, and drive science like a biotech, but they are very much integrated within Novo Nordisk.
We're seeing actually really, really good successes both on the science, on the partnering, but also the culture that is actually created in those units. That gives us a lot of confidence that even in a company that has a lot of tradition, there's a lot of emphasis here on new ways of working and cutting-edge science. You might have seen some news that we have invested very recently with Dicerna coming into this into the oligonucleotide space. A space that is not so far from our home. We're making first steps into call it gene therapy or gene editing. A space that is really sort of cutting edge right now and the collaboration with bluebird bio is the first for us, I can promise you not going to be the last.
We also do not stop to say, well, if there is a target that is uniquely suited for a small molecule, we find the right partner. We're working with Evotec here usually, to actually execute on this target. That doesn't mean we build all of those capability organically, quite the opposite. I think maybe this is one of the biggest transformations we have seen over the last couple of years, is that our way of working will be one where we are very knowledgeable about our core capabilities and what we're really good at, but we supplement and build, together with key strategic partnerships. The slides or the partnerships that we're detailing here are basically a snapshot of what we have done over the last 18 months or so. The interesting thing here is it is about platforms.
It's about single assets in particular diseases, sometimes in disease areas where we are not so knowledgeable in at the start. It is about target identification, they are all unified by being cutting edge and differentiated. I want to call out a few in particular. Dicerna, I will detail in a minute. Gilead, a way to actually explore a new disease area, in this case NASH, where I would say across the industry, we do not have all the data yet, but it is absolutely a disease area we would really like to explore and we can see a significant opportunity, a large unmet medical need, and thus also potential market. A single asset company, Staten Biotechnology, with an asset in dyslipidemia, we come back to that in a minute. Then a key enabling partnership at the University of San Francisco.
You see large pharma or peer pharma, you see biotech, and you see universities. I think that is the way of the world that will find the best partner that is suited for the task and not one size fits all. We've just announced a significant platform deal with Dicerna, a Boston-based biotechnology company, listed on Nasdaq. Dicerna really is a company with really deep experience and broad expertise in the siRNA space. Why are we interested in this space? Our targets currently or our modalities currently do not enter the cells. We wanted to see how we can target intracellular targets. By the best of our analysis, this is actually the majority of targets that we need to find and to be able to deal with. Rather than blocking proteins or mimicking proteins, what if we actually stop them from being produced?
This is what siRNA is all about with a really high fidelity, and we also see increasing confidence in the technology as such because we've seen now phase III data and even some marketed products. Having said that, those marketed products right now are in a small, usually rarer disease space. We feel we are the best possible partner for a company like Dicerna to take this technology to a very broad cardiometabolic space. This is why they were also really keen to engage with us on a broad platform collaboration that covers more than 30 targets over the next three to five years. It's a space, as I mentioned, where the nucleotide chemistry is actually not so different to our peptide chemistry. We're also talking about injectables. That's also a space we know one or two things about.
We're also seeing here synergies being built up in the areas that we're already comfortable with. We're really looking forward to this collaboration, which is kickstarting very soon. We have a very high ambition because we know they can make drugs to nearly every target that is out there as long as it's in hepatocytes. That, of course, is a beautiful segue into one of the key interesting novel disease areas, non-alcoholic steatohepatitis or short NASH. A disease that really affects, and bear with me, these numbers are all estimates. Because one of the key elements that is still missing for this field is a simple diagnostic, one, but it's also awareness about the disease. Because 10, 15 years ago, nobody really talked about NASH. There's a high degree of comorbidity with people living with obesity.
Weight loss and metabolic parameters and the improvement thereof, I think, are important for the treatment of NASH. We expect the number to increase that are being diagnosed significantly over the years, but I would lie if I say I'm happy with 1.7 million. I think there are many more millions of people who deserve being diagnosed and ultimately that deserve to be treated with the right medicines. NASH is a progressive disease. As nearly all the diseases we're dealing with, if you leave them untreated, it will get worse in most cases. Yeah. It will lead to a fatal outcome, liver cirrhosis, and death. The good news is there might also be arrows pointing the other way. We know the biology might have a level of dynamic, that the body actually can respond to some of those damages.
What we obviously want to achieve is that the arrow backwards becomes much, much bigger through therapeutic intervention. This is what we're working on. A key element here, Mads already mentioned the buzzword of translational science. I think we will see this much, much broader, not just in NASH, but in NASH it's particularly important to, A, understand really your patient population. In which stage of disease are those patients? Do we have the right biomarkers that we can measure to understand where those patients are? Do we understand fast progressors, people who are particularly prone to progress fast to the next stage of disease? Do we understand biomarkers that are specific for our targets so we can actually predict whether targets are going to work or novel medicines are going to work or not?
Rather than having a sort of homogeneous soup of a patient population, all-comer population, we will see much more of a fine-tuning, and I do usually take some inspiration from our colleagues in oncology, who've obviously taken this to perfection with the benefit that you can get biopsies obviously from tumors, which we're not able to do. We're working very hard on that. We're actually, by the way, also engaged with a number of across-industry efforts to find those novel biomarkers, non-invasive methods of diagnosis, which are no longer requiring biopsy, and so forth. We're really firing on all cylinders to explore this particular space. How do you do this if you've never worked in hepatology, and if you really don't have the network of key opinion leaders, if there's no deep science on, in particular, liver science.
On the other hand, obviously, we have a pretty good understanding of obesity, diabetes, and similar diseases, and a number of tools. Our answer was to find a partner that actually suits us and we hopefully also suiting the partner. We chose Gilead, and Gilead chose us. It was a mutual process. A leader in hepatology and in combination therapies, real deep understanding of liver diseases, not only in NASH, also in the viral space, and really a very well-established network with key opinion leaders. I would extend that also to having a real good network and dialogue with regulators because that is a difficult space here. We don't really know where the endpoints will move eventually once we talk about a non-biopsy-based diagnostic here. semaglutide is currently being evaluated in clinical trials in NASH, three trials in particular.
One which is largely imaging based, and we will see whether semaglutide's many effects, and I think Mads highlighted that, will actually have a fundamental effect on NASH progression or worsening of NASH. There is a biopsy-driven trial and one trial in particular in a very late-stage population of NASH, which will be very interesting because that is actually a space where people suffer the most and they are nearest to liver cirrhosis. It's also probably biologically one of the most difficult spaces because the liver is already severely damaged, and can we rescue functionality and get those patients basically back on track? That will be super exciting in its own right. Here comes the new thing where actually Gilead and we partnered in a combination trial, which I think is a really nice design.
We use two of their clinical molecules, an ACC inhibitor, it's an ACC 1 and 2 inhibitor, to be precise, and their version of an FXR agonist, which we believe actually has a nice differentiation angle to anything else that is out there. We're combining those two molecules together with sema. We're combining the molecules individually with sema, then we compare and contrast what works most. We don't know what the outcome is, fundamentally in the field, we believe that most likely combination treatments will be important. There might be combinations at any given point in time. It might be combinations over time because the biology actually of those patients might change. Watch this space. Next year, we'll know more about those really exciting data.
I don't want to dwell on this too much because both, I think Camilla and Mads have already spoken to cardiovascular disease and how close this is to both our current patient population, but also on sort of the neighboring patient populations. Just to remind ourselves, with our leading drugs, we show cardiovascular benefit, significant cardiovascular benefit, full stop. We're already in this space. The question is, what else do we want to do and how hard will we push this space? Is there an area where our science and our projects can make a particularly good impact above and beyond semaglutide or Ozempic, RYBELSUS. Two areas we're particularly interested in, atherosclerosis, largely driven through dyslipidemia, and heart failure. We'll get to that in the end, sorry. Just to remind you again, you have seen the data, SUSTAIN, PIONEER, SOUL was detailed.
It is a space where we collect an enormous number, and I would say probably one of the world-leading databases of cardiovascular effects of our drug. You've probably heard previously that we have our own version of a PCSK9 inhibitor. I'm sure many of you are familiar with the concept, PCSK9 being the one protein that ultimately binds to the LDL receptor, prevents recycling of the LDL receptor to the surface, and by doing so, prevents really a significant uptake of LDL from the circulation. By blocking PCSK9, we enable the LDL receptor to do its function, and consequently, LDL levels fall. That has been shown many times. There's genetic evidence, there are antibodies out there. We have a peptide version of a PCSK9 inhibitor. The cool thing is this really falls into our technology sweet spot. We know exactly what we're doing here.
We know exactly how to manufacture this moiety. Rather than to think about this as now, and I can see you, "God, what are they doing with the PCSK9 inhibitor?" See it as part of a portfolio build, how we will enter the cardiovascular space. That could be the project on its own in various shapes and forms. It could be the backbone of combination therapy. Yeah. I think we want to give ourselves optionality in this space where it matters most, and I already spoke to the Staten molecule which is a sweeping antibody concept for triglyceride particles. The other sort of bad part of the blood lipids or the remnant cholesterol, which maybe hasn't quite yet gained the traction as LDL, but gains really more importance as we speak. The triglycerides, I think, will be very much in focus of the years to come.
We're very happy with those. The stem cell platform, to get to my last two slides here, is obviously one, and Mads has alluded to that we've worked on the basic science for two decades. A few years ago, we realized this platform is now ready for prime time, so invest heavily in this. I just want to detail a few disease areas where we started to work on. It doesn't stop here, right? It's a platform that is versatile, it's scalable, and it actually lends itself to a large variety of diseases, cutting across all our traditional core disease areas, biopharm, and actually disease areas we don't even know yet. We know the technology space.
More importantly, I would say, and that's coming from an early scientist, is many people can make stem cells and make them produce particular hormones or to get a particular phenotype. I think our particular value proposition here is the quality and the reproducibility of making those stem cells, controlling the protocols, getting a GMP manufacturing right, and in a baby version of what Henrik has shown you, we have opened up a small manufacturing site on the U.S. West Coast, which really shows our commitment. We think this game, this is a competitive game, and others are really out there. This is not going to be won in the lab or in phase I. This is going to be won on the market space with the right product, with the right quality, the right distribution system, and by the way, also the right partner.
I want to end here and hand over to Mads for the home run.
Thank you, Marcus. You can stay up here because there will be time for a couple of questions in just a couple of minutes. What I will actually end up doing is really tell you a story about the news flow that is happening over the next couple of years. It is quite sizable. If we start out with the other serious chronic diseases, the most important thing to have a good eye for next year is the NASH studies that report in the second quarter on semaglutide and sema plus the loose combos from the Gilead collaboration.
We look into biopharm, there's a lot of excitement surrounding getting somapacitan approved in some of the major markets, having Esperoct submitted in China, and also of course getting into the clinic with new products such as Mim8 and getting out of the clinic with mature phase III projects such as concizumab. We move then into the space of obesity, we have also here next year in second quarter a clear inflection point in that not only does STEP 1, 2, 3, and 4 read out, i.e. the pivotal semaglutide obesity program, but also the AM833 monotherapy, and even in combination with semaglutide, we will have all of those data to form the basis for submission, hopefully of the NDA for sema-obesity and phase III progression for AM833 and its combination partner, semaglutide. There's also a lot of earlier research reading out at that point in time.
Because of the crowdedness of this slide, I even had to remove the title up at the top to get space for diabetes. In diabetes, of course, we cannot shy away from the notion that the cardiovascular indications for Ozempic and RYBELSUS are up for decision on January 20 next year, which is truly exciting. As exciting as the LAI287 readout, the phase II readout in the early parts of next year, that together with the LAIsema multiple dosing readout, will form the basis for progression of both of these projects into phase III trials. Of course, we have a number of earlier stage phase I activities, not to forget the high-dose sema, the sema FORTE, that will complete second half of next year.
Actually, I think I will wrap up by saying that, first of all, you've heard us today, now we're wrapping up on the entirety of R&D, that we are, as a company, truly raising the bar further within diabetes R&D and innovation. We have heard that we are developing a broad, wide, deep, and exciting portfolio of anti-obesity medications that we'll be discussing much with you in the future. You've also heard from Ludovic that we are strengthening and progressing the biopharm pipeline, giving maybe more hope and expectations for the future than we thought just a year or so ago.
Finally, you have just heard that we are establishing a presence initially in the pipeline within other serious chronic diseases such as NASH and chronic kidney disease, and already establishing ourselves with the first couple of products, namely Ozempic and Victoza, and hopefully even RYBELSUS in the field of cardiovascular medicine. In fact, we have a few minutes to take a couple of questions, and for once, I will facilitate the discussion. If the colleagues with the microphones are standing ready, we can only allow one question per person, and we'll do it very fast. Yes, there's one right there.
Peter from Handelsbanken. In terms of establishing a presence in a disease, clearly right now it's just a pipeline, as you say, but one of the key secrets or one of the secrets to your high margins is your therapeutic focus. Establishing disease, does that also mean, let's say, more heavier?
Infrastructure going forward, let's say, in five-six years or whenever that may be relevant. I here, of course, think about commercial, et cetera. Thank you.
Well, really, that's of course the question to Camilla and her team. If you look into the cardiovascular space as a company with the advent of the cardiovascular label claims for GLP-1 based products, we are already establishing a presence and strong connections with the cardiology community. Of course, there's a difference between going all in with a dyslipidemia drug and being present within the, you can say, the zones around diabetes and cardiovascular medicine. That is something that we'll build over time. I have to say, already at this point, we have a sizable network in the field, so it's not a overnight thing, it's a thing that we'll build over time. The other areas such as NASH, et cetera, are quite often handled either by the endocrinologists that we already see and talk to or, of course, by hepatology specialist centers.
Right now, of course, we're relying on discussing and partnering with Gilead, and there are quite a few years before we are in the market space. We can discuss that as the pipeline matures and as we get closer. Disease for disease, it depends on what stage of the disease. If it's kidney disease early on, it's quite often the general practitioner that sees a eGFR that is reduced and refers the patient, and that we can handle. Of course, there are nephrology centers that we do not have access to at this point. It will be a multifaceted answer that Camilla can go into great detail with at a later point. Yep. We'll take one over here. Richard?
Hi. Thanks. Richard Vosser, JP Morgan. Just thinking about the LAI 287, and future development. What sort of program could we envisage for phase III, sort of size, scope, CV trials?
Yes. Generally, I think I'll take that one because it's on Lars' side. LAI287 is an insulin, and typically insulins, unless there are signals of danger out there, do not demand cardio outcome trials. The DEVOTE kind of thing that we saw in the case of degludec should not prevail for LAI287. What we foresee is that if we can prove that it is as safe as, for instance, glargine and degludec in bringing patients to target, also in terms of hypoglycemia safety, then that will define the target product profile rather than doing humongous trials of 8, 10,000 patients as we did in the BEGIN, and BOOST, and SUSTAIN programs. This will be a more limited scale, but where we are considering to deploy modern technology, digitalization, dosing algorithms, devices, and connectivity in a way that you've never seen before.
It will be a smaller scale trial program, 3,000-4,000 patients. It will allow inclusion of the LAIsema so that we can piggyback on the factorial benefits of doing drug A and B, and A plus B even in the same trials. Then we will seek to get a degree of glucose control that is unprecedented for an insulin driven by some of the technologies that enable us to do so a year or so from now when we start the phase III program. Peter?
Pete Verdult with Citi . Mads and Marcus, lots going on with the pipeline, lots of excitement. I know you're not going to talk numbers, when you budget or when you do your R&D budget, should we be thinking conceptually that that's going to outpace top line growth or be in line with top line growth? Just, I know you're not going to give numbers, I just want to make sure I understand conceptually how we should be thinking about what it's going to cost to fund all these programs.
In reality, Karsten will address that in the next section, talking about the gradual over time increase in R&D to sales ratio, which comes on top of a increase in top line, we have to remind ourselves. What you will see, Peter, is that as some of these major outcome trials come to an end, SELECT, SOUL, FLOW, what have you, then you will see a relative redirection, at least temporarily, of late-stage outcome trial money into earlier stage, more science-like money. One last question from the same table, and that will be the last of the session.
Emmanuel Papadakis from Barclays. Just a quick one on the stem cell program. What needs to happen between now and the second half of 2021 to get that ready to go into man? Then how quick could that clinical development program ultimately be?
Marcus.
I think the key element here is for the type 1 program, the device. Obviously the cells need to be protected in this particular space. We're working very hard on that. That will be through a key partnership, which obviously we haven't detailed and announced yet. That for us is actually also one of the key elements is apart from the cell production and reliability of our cell lines and the protocols, it's the device for the type 1 program that needs to be accelerated. A number of quality tests, obviously, and preclinical tests. The one thing I can assure you that the team in the stem cell unit actually is working at full speed on, in particular, three key programs.
One is the Parkinson's program, one is the type 1 program, and we're also creating sort of a master cell bank, to be fit for the future. I think that for us is sort of the key elements. Early in research, we do have an interest in trying to stealth our cells. In the future with other diseases, we can get around needing a device. I think that will be really a huge sort of key enabler for us and, hopefully, next time we meet, I can share more on that with you.
With that, thank you, Marcus. I think, Karsten. No, sorry, Henrik, my dear Product Supply colleague. Henrik will now host the final session.
Thank you very much, Mads. You can interrupt me, Karsten, if I move over my part of the time, I guess we have a shared session here. I can start out because we share this introduction to what we're going to talk to you about now. Basically, just building on what we talked about this morning, I just want to spread a bit out the explanation of how we built the supply chain in Novo Nordisk, not only on RYBELSUS, but actually on our full portfolio. What you see behind me is actually that we have spent the last years of actually changing product supply from a little squeezed manufacturing unit with a lot of really high utilization level, actually to become a strategic partner both to R&D, also to our commercial units.
If I just should pick one example that you just saw, then the full pipeline that Mads just showed you. Basically, in the old days, we only were concentrated on the phase III programs, and we didn't use any time of looking into phase I and II. Nowadays, R&D people and product supply people are watching the whole pipeline. Of course, we are not using a ton of amount of phase I in product supply, but we understand what they are doing, and we are preparing the full manufacturing supply chain and try to think in if we are able to actually help very early in the phases. We are just talking about the long-acting insulin 287.
Actually, I have already a facility ready for that right now, because we have seen it coming so that we can actually, one of our existing facility, we can utilize that for that one. It's just one example. You can say, "Okay, well, yeah, but that you have talked about for many years within API that you can do this." It actually also goes within our aseptic area, our filling area, the tableting, and then you can continue like that. Assembly is also a good example where we work together with device R&D actually to develop next generation devices. We have broadened our perspectives and working much more together with R&D.
In the commercial side, we have also actually become much stronger in protecting our mature product in the pipeline that we are utilizing a lot, especially in IO, to open up new markets where we actually are maintaining some of our mature products and the facility behind them, keep them in really good cGMP control. You can say, "Okay, well, that's just maintenance." We are using exactly the same efforts in those facilities basically to bring down unit cost even further on the mature products as we do on the newer products, which again open up more markets, especially in AMEA and in regions like that, so that we can basically develop the markets there. All in all, I think it's fair to say that nowadays product supply is delivering increased agility but actually also expanding the possibilities that we have within Novo Nordisk.
We also find it really exciting to talk about, even though we are early phase I, we actually also find it really interesting to discuss cGMP levels of stem cell production in California with you, even though that you own the phase of the program still. If I should bring a little bit the footprint into the discussion, then you can say that it's a well-known picture for many of you. We have all the competencies and all the capabilities placed in Denmark close to R&D and close to development, and we keep on maintaining that. There is some movements on this slide and actually now we are producing biopharm API in U.S. That's the first API ever we have done outside Denmark. Now you saw the drone video earlier today.
That means that our North Carolina site can now do not only oral semaglutide, the RYBELSUS, but actually also if we want to do it can also do the injectables. We have built a second platform of API production and I will come back to what we are also able to do. We have three really high efficient sites. They are similar in size and what they can do. It is in Brazil, it is in France, and it is in China. They are running with a really high efficiency and keep on optimizing their outputs, really well-functioning sites. We added actually a little sister to that in Russia the last couple of years. That is also a really nice facility. We have local manufacturing in Algeria and local manufacturing in Japan.
This is, when I see it, a really strong manufacturing set up and we can scale it in many ways. We have a lot of flexibility that we can play around with. We have a really high level of cGMP compliance level nowadays. We feel that we have a really solid base for further growth and for further utilization of this network. Basically both towards R&D, but certainly also towards all the dynamics within commercials that we see. We feel, to be honest, really self-confident that we can follow the speed in sort of both ends of the value chain when you speak to that. If you just-Go a little more into details of the RYBELSUS set up. Actually, we put this on paper five years ago, and I'm happy to say today that it actually looks better than we thought.
Right now, today already, Denmark is producing API and we are really busy 10 kilometers away from here producing tablets and pack the tablets for the U.S. launch in Måløv. You saw the Clayton slide. We actually here in August, we were really lucky to buy a facility close to our Clayton facility in North Carolina. The beauty of buying almost a new facility from another partner is actually that we can speed up the implementation of further volumes within oral sema and RYBELSUS. That we are going to do and we have just bought it, so it's a little difficult to say when it's up running precisely. We have a saying going that we think that they can catch up with the API side.
They will speed up and then hopefully they will be ready at the same time as the Clayton facility. That will be half price of what we paid for the Måløv side. It will be double the speed and maybe double the capacity. That's a good deal. We'll work with that. If we take it from another angle, then we take all our brands and actually also all what we have in the phase III clinical trials, then you can see that I can basically claim that we can follow the full pace of all the products. When we both talk next generation obesity medication, we talk our new biopharm products, we know exactly how to do those, and we are working together with R&D on those to develop them into operations.
You can also see on the right-hand side that we have had a local peak upwards on our CapEx. I think it has been really intelligent investments in this. Actually, the reason why Karsten and I, we are on a stage together is that none of us likes to build facility, we like to optimize. Both of us, we are actually happy that we are now in 2019 and we look into 2020 and the future because we are coming back to a more what we call normal level of investments in Novo Nordisk. That also means when we had a couple of years where we have invested a little bit more, where the majority of this is actually RYBELSUS, it also means that we hold a lot of potentials for optimizations, and that we like.
If we should talk a little bit about that, then I try to not to reveal what we think about RYBELSUS over time, then at least what I can do is that I can show what we have done with the products that we have already produced. This is the development that we normally see of the APIs that we are producing. We do not shy away from actually trying to do exactly the same on RYBELSUS. We have initiatives across the value chain, across the supply chain, targeting the different cost structures that we have on that.
As I alluded to this morning, we have actually after the PIONEER trials, we have increased our expectations to what we are able to do with RYBELSUS, which means that the demand on us in product supply has increased beyond the design capacity what we thought we were building. We have so far followed those forecasts, and that of course means that our ambitions of lowering the FMCs will also follow. That is going to be a really exciting journey in the next couple of years. In conclusion and over to Karsten, we think we are well-positioned both today and actually also in the future. We have a high manufacturing capacity across the products. We have an agile manufacturing set up in a more complex environment. We have reduced manufacturing risk by actually having API in more footprints.
Some of the initiatives that we have taken within cGMP and actually also technology has actually removed man away from the lines with also a higher safety level. Finally, we will never stop driving efficiency and chase lower unit cost. Do you like that, Karsten?
I like that a lot. That's music to my ears, Henrik. That's a really good segue from manufacturing to financials. Think about this, lowering CapEx, no major new CapEx projects in the foreseeable future, and a bullish head of manufacturing driving down unit cost. What's not to like? Now you've heard from my colleagues across the value chain about our plans and aspirations for the medium term. Now it's up to me to pull it together in terms of financial consequences and how we see the financial medium term outlook.
I think what you've heard from my commercial colleagues has proven that we are intensely focused on driving top line, whether it's in international operations or it's GLP-1 growth, or it's obesity, how big we can make it, RYBELSUS. Top line focus, top line obsession, as Mike would talk to, is something that we really focus on driving each and every day. We just covered manufacturing. Driving down unit cost. That's the name of the game. That's what we discuss each and every day. In R&D, you heard from Mads, Marcus, Martin. We have the pipeline. We have the innovation. We have the investment opportunities for long-term growth of the company, future value-generating assets in our pipeline.
From our commercial colleagues, you heard that to drive the top line growth, of course, we're going to invest in our growth opportunities, whether it's launches, whether it's growth markets, whether it's growth products. We will actively be investing in driving our top line outlook. Let me take it through each of these elements in a little bit more detail. Pretty much one financial line by time. First of all, gross margin. Sorry. I'm moving too fast here. First of all, gross margin. Just to take the starting point on gross margin, we have a gross margin above 80%. When you compare that to most other companies in the industry, this is a very competitive gross margin. That's the function of what Mads presented with a highly successful, low attrition, internal organic innovation approach.
That's our starting point. What we're looking at for the medium term is a broadly stable gross margin. There are some different factors impacting the gross margin. You heard Doug Langa talk to the pressure on insulin pricing in the U.S. On top of that, there will be an impact from affordability programs also, and that is a conscious choice that Doug also covered before. That will have a negative impact on our gross margin. Henrik talked to RYBELSUS and the unit cost for RYBELSUS and the optimization opportunities we have there. Initially, when we are launching RYBELSUS into next year and in the short term, there will be a negative impact on our gross margin simply due to higher RYBELSUS unit cost initially. The growth profile of the company you heard about with international operations growing faster than North America.
There will be some negative impact on our gross margin. I'll come back to the regional profitability in the later slide. However, offsetting these three factors is, first of all, productivity. I don't think I have to come back to that. Henrik covered that very nicely. Given the fact that we have the production network, we don't have to fool around with investment projects or anything like that, then we can simply just focus on driving productivity and lower unit cost. You heard about our growth opportunities. A very big part of our growth in the medium term will be driven by GLP-1 with an above-average gross margin. Hence, we'll have a positive product mix element in the medium term. Just one final comment for the short term vis-à-vis the RYBELSUS impact.
Do note that in 2019, which is the base year of this, we do have a one-off related to the asset impairments we reported in Q3 related to the intangible assets. We do have a kind of a negative impact in our base that we will not have going into 2020. How are we then going to allocate our gross profits between shareholders and investments in the company? Mads basically stole the party line just before. Given the opportunities we have in R&D and our pipeline, and given the fact that we are pursuing an innovation-based strategy, so we are an innovation-based business, so we will be investing more in R&D in the years to come. Part of that, of course, we get the benefit of a growing top line.
Even at a stable R&D ratio, we would be able to spend more on R&D on that in isolation. Beyond that, we are looking at, over time, gradually increasing our R&D ratio. Marcus very nicely covered that. Our opportunities in building the pipeline, the increasing number of assets you see on the slide. Martin covered the significant increase in patient years in the coming years. Just to caution, because when you try to translate a tripling in patient years into financials, then the math is not that simple. On the contrary, the tripling in patient years. There's a big element being trial mix. The cost per patient in many of these outcome trials is significantly lower than some of our earlier trials.
Furthermore, the efficiency drive we have, both through digital and basically general process optimizations in global development, enables us to offset a huge part of the volume increase by productivity and mix gains in R&D. One final note, of course, we have a very solid balance sheet. You heard Ludo talking about opportunities in broadening our pipeline in biopharm as an example, and you heard Marcus talk about in-licensing opportunities and partnering opportunities in the more early stages. We have the balance sheet also to accommodate that should the right opportunities arise. Offsetting the gradual increase in the R&D ratio, then what you should expect over time is an S&D ratio that will gradually decline.
What we're doing in our commercial investments is, just hearing the boss in a number of the sessions, resource allocation is really the name of the game these days. In simple terms, what we're doing is that we are reducing investments in low-growth products, low-growth geographies, and allocating those resources against large products, growth products, growth geographies. That's the simple storyline to it. To give you a couple of examples, in Japan, we have reduced our promotional efforts, and then we've been able to take these resources, and as you have heard recently, then we hired 400 reps in China related to Tresiba national reimbursements. That's an example where we basically go across geographies, take down one place and increase another place. You saw Doug Langa's U.S. strategy.
We are defending on our insulins, and defending also means that we're optimizing our promotional resources against those products. We take those resources and deploy against our growth opportunities in GLP-1 and obesity. That said, in the short term, when you look at our pipeline and our product portfolio and our approvals, then we're at a very special point in time. Between Ozempic rollout, we're only in 20-some countries currently, and RYBELSUS, where we are hardly launched in one country. The opportunity we have between those products is extraordinarily big. That opportunity is not something where we say we optimize that for the next year or the next two years. You all know the duration and the lifetime of assets like that. We're talking 10, 15 plus years.
For that reason, it's extremely important for us really to fuel the takeoff of these products and continue to fuel it in the short term. What that means is that while we're rolling out Ozempic on a global scale, we keep pressure on Ozempic in the U.S. marketplace. You see the truly phenomenal market share data and the blockbuster performance in the U.S. We keep pushing Ozempic once-weekly best, once-weekly GLP-1. At the same time, of course, we need to roll in RYBELSUS. Without taking our foot off the speeder, we roll on RYBELSUS. That means that we have to be really tough on our resource allocation in order to free up resources to invest in RYBELSUS. We also do need to have incremental resources on top of that.
In 2020, you should expect us to invest additional incremental resources against RYBELSUS to ensure that we have a fantastic take-up of the product and a long, successful lifetime of the product. As the other functional areas, efficiency is also in fashion in commercial. Those of you attending the European session heard Matt Regan talk about driving efficiency in a European setting. Efficiency, whether it's manufacturing or R&D or commercial, that is part of freeing up resources so we can invest in our future growth products and platforms. I promised to bring you our regional profitability, because being a global organization and marketing products in almost 200 countries and having a footprint in almost 100 countries, there will be profitability differences between each of these countries.
That is driven by pricing, product mix, cost of operations, economies of scale, and of course, the growth potential, how hard we're investing ahead of the curve. When I roll all this up on a global level, actually the differences end up being moderate. You see that, for instance, just in our financials for this year. Then in the first nine months, where we have all our growth from IO in terms of absolute growth contribution, all growth from IO and no absolute growth contribution from North America, we still have a pre-R&D operating profit that's stable compared to last year. That can only be possible if the regional variances are moderate. I'll try again. Concluding on our margins and our ratios, we have a fantastic opportunity to drive sales growth. I think few people disagree on that one.
Through productivity gains, we are aiming at maintaining a broadly stable operating gross margin. Over time, we'll be increasing our investments in R&D and gradually increase our R&D to sales ratio, while at the same time, also over time, gradually decrease our sales and distribution cost ratio. I saw some smiles then. Finally, our administrative cost ratio. We have a long history of reducing our administrative cost ratio and will continue to do so through optimization, offshoring, automation, et cetera. Of course, the question is these results, how's that then being allocated in terms of real cash and allocation to shareholders? What you've seen, historically, we have been converting more than 90% of our net profits to free cash flow. These are reported net profits. This is not adjusted our business net profits or whatever it's called.
These are our reported net profits, more than 90% converted to free cash flow. From free cash flow to cash return to shareholders, for the last three years, as an anecdote, we have returned more than DKK 100 billion to shareholders between dividends and share buybacks. We've basically, over the past three years, also been returning more than 100% of our free cash flow. 23 years of increasing dividends per share and a solid balance sheet that can cover any M&A activities, we've been guiding up to DKK 5 billion as a threshold for what we're looking at for M&A activities. We can do that without impairing our abilities to have an attractive capital return to shareholders. I like to keep score. This is a scorecard for our current set of long-term financial targets. This is based on our Q3 numbers.
Of course, we need to totally close it out by full year. Based on our Q3 numbers, more than 90% cash conversion as a three-year average and operating profit after tax to net operating assets in excess of 100%. An average operating profit growth based on our full year outlook for this year of 4.7 compared to a target of five. This is just to confirm we are on track to deliver on our current set of long-term financial targets. In conclusion, our medium-term outlook is deliver solid sales and operating profit growth. You heard Mike talk to the 6%-10% growth in IO. You heard Doug talk to the 70% conversion of our book of business in the U.S. You heard me and my colleagues talk to driving operational efficiencies in order to invest in growth assets.
Finally, you just heard me talk to that we'll continue to focus on delivering free cash flow and an attractive capital allocation to shareholders. With that, I'll hand over to our CEO, Lars Fruergaard Jørgensen.
Thank you, Karsten. This is the last presentation today, and I feel now the energy is getting a bit low in the room. I'll try to keep it up, and then we'll wrap up with a final Q&A session. I hope you, throughout the day, have sensed our optimism, our confidence in the future. We are addressing large markets. We have the strongest-ever portfolio to do that. We have strengthened our execution. I think we are on a very good track, and we can document that in the sales development we have demonstrated. We have lifted performance level in IO. We have launched the best launch ever in the U.S. Actually, if you look at the additional markets where we launched Ozempic, stellar performance. We feel really good about where we are as a company.
We started the day by introducing the framework for the strategic aspirations. Throughout the day, we have actually given you what those aspirations are. Let me just summarize them for you one by one. If we start with the purpose and sustainability quadrant. We believe in the importance of being a purpose-led company. A company that adds value to society, a company that's based on a set of core capabilities where we can be among the best performers in the industries we operate in. It's about being a sustainable company from a financial point of view, but it's also about being a sustainable company from a social point of view, and to conduct our business with an eye for our environmental footprint. The specific targets we have defined based on this, is that we want to be respected for adding value to society.
There are specific surveys and metrics behind that, so that we can demonstrate tangible evidence on how we track that. Equally important, we want to progress towards having a zero environmental impact. Already next year, all products from Novo Nordisk will be manufactured based on CO2 neutral power. There are few companies in the world who can actually make that claim. We've talked about capabilities a number of times, it's important to keep investing in your existing capabilities, but also gradually expand your capability platform and evolve a culture to support doing that. We have good plans for how to do that across this first quadrant. Moving to the second quadrant, which is about innovation. I hope you also agree with me that we have seen tangible evidence of how we are lifting the innovation bar in Novo Nordisk.
Mads spoke about the ambition to move insulin treatment to be based on glucose sensitive insulins. That would be a major disruption. It would redefine insulin as a product, I would claim. We also heard about the ambition of simply moving the GLP-1 market to oral market. A significant opportunity for patients and for a company like ours in driving differentiation. We've heard very bold ambitions in actually trying to make bariatric surgery procedures into actually a medicine-based approach. Bariatric surgery in an injection. We heard about that in biopharm, we are having now late stage assets, phase III assets, and we also have an approach to potentially make the best hemophilia product better than the product that's taking share today.
Then we just heard that we have an ambition to move into adjacent areas and also build what I believe is a very interesting stem cell-based platform, which is completely different business model than the business model we use today. It's not about deploying reps on ground, negotiating contracts. It's about curing a number of diseases. I believe that's a very attractive outlook, and we have defined, as you just saw, a set of also tangible aspirations for 2025 here. First one is to raise the innovation bar in diabetes treatment. The second one is to develop a leading and superior treatment portfolio for treating obesity. Then we want to strengthen and progress our biopharm pipeline and want to establish a presence in other serious chronic diseases.
For all of these, we also have specific targets that we'll be tracking and reporting progress on to all of you. Moving to the third quadrant, the commercial execution, starting with diabetes. We are very proud about the step change we have made in commercial execution. We have gone from losing market share to winning market share, that's within insulins and it's within GLP-1s. It's not in one market, it's across our markets. We are getting more value out of our leading portfolio than we have ever been able to do. Mike spoke to the ambition of tripling our next generation insulin business. We heard about how we believe we can continuously grow both the GLP-1 market and our share of that. Last time we had the Capital Markets Day, we were excited about the opportunity with Ozempic.
We're equally excited about the opportunity with RYBELSUS. It's early days, early signals are good, but yet we have to land the contracts. My big nose, my big ears, tell my stomach that that's something we can handle. The good news is that already over the coming few quarters, we will have tangible evidence of that happening. Next time we communicate to you at the full year, we hope that we can give the first signs of not only scripts in the market based on us supporting patients affording them, but actually based on contracts. We are very excited and actually also very confident on our ability to do that. Turning to obesity and biopharm. Obesity is a huge opportunity for Novo Nordisk. It's an opportunity where we need to develop the market. It's an opportunity where we need to develop more efficacious products.
You heard that we're doing that. We are opening that market, and we are developing those products. In biopharm, we are actually having a broader portfolio also than ever. We are launching more products than ever, and we can see that we can complement the decline we see in NovoSeven based on that. There's also there a sustainable growth opportunity. Wrapping up, we have communicated that we want to drive our market share in diabetes to a third. It says more than a third. More than has kind of sneaked in also here. We talked about the obesity opportunity that we want to more than double sales in obesity. With what we have going in biopharm, we want to create a sustainable growth outlook also for our biopharm business. To the fourth quadrant, the finance quadrant that we just heard from Karsten.
I'd just like to once again remind you about the massive efforts that's going into converting our U.S. business. If you think about converting 70% of half of Novo Nordisk business in a matter of a few years, that's a very strong commercial execution. We are reducing our dependence on insulin in the U.S. Still we'll be treating millions of patients with insulin in the U.S. Insulin will not go away, prices are coming down. We have a fantastic opportunity in our GLP-1 business, and it's growing, I would almost say like there's no tomorrow in the U.S., and we're now finally coming back and taking share. That's a huge commercial opportunity. We need to get out of this medium term turnaround of the book of business to get to growth again.
Our colleagues in International Operations, you heard the great commercial colleagues here talk to their business and how we're getting more out of our portfolio, how we have changed the mindset, how we are moving resources to the growth areas, and how we are basically rewarding ourselves more now on driving growth, beating competition than meeting internal profit targets. It doesn't mean that profit doesn't matter. If you're losing market shares, you should not be a hero just because you met your budget. We are in the business of gaining share, bringing our innovation to patients, and that we can only be satisfied with when we grow above the market with what we have, and that we are now. On the financial outlook, driving efficiencies is fundamental.
I hope nobody is in doubt that Henrik runs a very tight ship, very strong competitive advantages for Novo Nordisk in the manufacturing platform we have. We have a very robust, high quality, highly optimized manufacturing platform, and we can produce at higher quality and lower cost than anyone in the industry. By having this installed capacity now, there's a continued opportunity to drive down unit cost. This is what the colleagues do in product supply, and they actually find that that's a bit of a sport. You cannot meet a colleague from product supply unless you have this drive in constantly doing things better. You heard about our cost ratios. We allocate resources to drive top line growth. We believe in a broadly stable gross margin. We believe that we will gradually have to invest more in R&D.
Top-line growth obviously drives an ability to invest more in R&D. Mads spoke to that the composition, it's the late-stage activities in R&D that's really expensive. Research is relatively inexpensive. We are right now having more patients than ever in late-stage trials, including the cardiovascular outcomes trials. On the other side of that, there is significant flexibility in R&D spend. We are gradually going to increase our R&D ratio. We believe at the same time that we'll have leverage on the S&D ratio. It would be nice to be launching as many products as we do forever after, but that's not realistic. There is a bolus, there is a spike in launch of products now, and the other side of that, there'll be leverage. Karsten just went through it.
We will stay disciplined on how we manage our balance sheet and how we return cash to our shareholders. There's no change there. In short, the financial outlook is to deliver solid sales and operating profit growth, 6%-10% in [essential rate]. You heard Mike talk to that he wanted to be in the upper end. There will be years where there are macroeconomic issues that has a negative impact on our business, so it can be lower, but we're aiming for being in high end. You heard the 70% change the book of business in the U.S. Short term, that'll be a drag on our growth. We're down to, say, flattish growth, say 0%-2% growth in the U.S. On the other side of that, we should be back and growing, say, mid-single digit.
We do not know exactly how RYBELSUS goes, but it's clear that there's a huge commercial opportunity. That'll be defining for where that steady state growth level will be. I can tell you, we are investing what it takes to make it go as high it can goes. We've spoken a lot about leveraging and driving operational efficiencies across the value chain. It's moving resources across value chain functions, but it's also within the value chain functions. There's a new discipline in town called reallocation. For many years, colleagues in the company were used to getting larger budgets. That's no longer the case. Some gets lower budgets. We reallocate much more than we have ever done. The cash discipline returning an attractive cash in form of buybacks and dividends to shareholders. This is in simplicity, our strategic aspiration for 2025.
I can tell you that the board has kept us honest and there are specific targets behind each one of them. We will in the future, in our quarterly releases, report to you how we're progressing on them. For confidentiality reasons, we cannot share all targets upfront with you, but we will stay accountable with all of you in how we track on these aspirations. With that, I would like to invite all my colleagues on stage. We have the final Q&A. You know the drill of one question and you try to cluster it around the tables to get going. We have an active table over here, so we get the mic.
Hi. Sachin Jain, Bank of America.
Sorry, please.
Questions for Karsten on the margin side, if I may. You've clearly moved away from prior commentary of EBIT growth in line with sales and an implicit flat margin. Just two questions linked to that. One is extent of SG&A decline versus the R&D increase. Could you provide any color how those balance out? Clearly, the SG&A budget's a lot bigger. Secondly, just to make sure I've not misinterpreted commentary for 2020, you provided some directional commentary on gross margin, and you're making it very clear that you will invest what it takes on SG&A for RYBELSUS which is completely correct. Could you rule out a margin decline for next year given those two comments? Thanks.
Thank you. Karsten.
Yeah. If I take my 2020 commentary first, then our formal financial guidance, as you know, for 2020, will be issued February 5th of next year. What you should be looking at is that what I said was we have a negative impact from RYBELSUS launch on the gross margin, but we also have a somewhat easier comparator due to our impairments earlier this year. There you see two more or less balancing effects. What I said is that it's very important that we get RYBELSUS successfully into the market and that we'll have incremental investments into RYBELSUS, especially linked to our U.S. launch. There you should expect that to be over and above a flat S&D ratio.
Then for the medium term, our gradual increase in our R&D ratio in the medium term, that is also a function of the opportunities we see at a given point in time. It's not something that we've carved in stone that three, four years from now that the R&D ratio will be XYZ. What we are looking at is that we are seeing opportunities to invest in more in our pipeline, and that we also see the need to invest more in our research efforts and platforms. That's why it's important to signal that we will be increasing more, but that we also see the leverage in SG&A over the medium term. Whether it will precisely be offsetting, let's see in the individual year, but it will more or less be offsetting.
Just to add, in my experience, there is a bit of a rate-limiting factor in R&D compared to S&D. My experience is that in S&D, it's much easier to spend money because they move a bit faster. In R&D, you actually need to have some activities that you actually run. The growth we're talking about here and the additional spend, it takes smart people to actually put that into good action. Not to kind of harass any of my commercial colleagues, but I think there's a natural rate-limiting effect there.
Hi. Thanks. Richard Vosser from JP Morgan. This year in 2019, you're guiding for 5%-6% sales growth, and yet next year, 2020, you're launching RYBELSUS which should be additional growth. You've got a smaller doughnut hole impact next year that we know about. The pricing environment is broadly the same next year as this year. That speaks to higher sales growth next year. Yet you seem to be suggesting in terms of the near term that the growth would be similar. Could you just give us some color on that? Thanks.
Yeah. Again, as Karsten says, we don't give specific guidance, but your elements there are correct. Obviously, the first launch year of RYBELSUS will be a limited impact, obviously depending on when we get the access. We'll know more about that already when we meet next time. Obviously our guidance will be a function of that. We also spoke to that we are launching a number of affordability issues where we're going to support patients who cannot afford our insulins. That also plays in. Yes, there's continued pricing pressure on the insulins. Those are ballparked the moving elements. The specific guidance, you will have to wait for January 5th.
February.
Sorry, February 5th. Yeah.
Hi. Naresh Chouhan from Intron Health. Just a question on Victoza. We're seeing volumes coming down, and we're obviously seeing the mix getting worse with Medicaid. Should we see a deceleration of sales over the next couple of years in Victoza, or should we expect a similar level of decline as we've seen through 2019?
Anyone?
I don't see any reason why we would see a broadly different change of the current slope of Victoza.
I think.
We have stay time, Naresh, of about three and a half years, so we know that patients, how long they stay on the product, and I don't see any other event that would change that slope in the short term. Karsten, I don't know if you have a.
I would say historically, when we've looked at chronic care products, then they tend to have a longer tail than people normally anticipate. I think we have a stay time on Victoza to the tune of three years or so, and we're launching in with Ozempic and RYBELSUS. I think all our promotional efforts are against the new generation innovations, and thereby you see a trend where if you take our U.S. data points, that we're dropping some 10% market share year-on-year. That trend you should expect to continue. Of course, we always have the option, depending on the exact market conditions, if we want to be more forceful in terms of our promotional efforts.
Good. I guess.
Can I just follow up on that? Just what might drive the sales down further is if you're seeing Medicaid mix and price cuts in commercial driving the Medicaid price down. Is that potentially? We've seen that mix already. We've seen it. It's happening this year, and we've seen that happen on Levemir, for example, where it did decelerate. Are there any reasons why we wouldn't see that in this scenario?
What do you say ?
Yeah.
I think the key point and the key strategic premise for us with Victoza is basically to sell Ozempic and RYBELSUS. Then we have no push behind Victoza for all practical purposes. If we talk about the U.S. market as saying we have lots of push in different markets. Then you have the normal churn of patients and the stay time, and that's the trajectory you see. If there are any changes in some of the channels, then of course we will evaluate at that point in time what our tactics are. Again, our focus is on Ozempic and RYBELSUS.
It's the volume dynamics in launching a new product that we believe drives the development of the business the most more than the contracting.
Yeah. Maybe I can just clarify that with Ozempic focused on new patients. You saw the preferred injectable, and that's what our focus is. You also see the decline from Victoza coming from that. There are just fewer new starts in the U.S.
Good. We move over here.
Yeah. Thank you. Florent Cespedes from Société Générale. A non-financial related question. On RYBELSUS and Ozempic, how crucial is the label update expected early next year in the U.S. on the cardiovascular mortality benefit claim for the success of the product and for the negotiation with payers? If you could give us an update on this point, would be great. Thank you.
Yeah, Doug, comment on that?
Yeah. Right now, we're in the middle of negotiations. Again, that would be an added benefit come January if we get that, and we will certainly, once approved and able to, we will use that in promotion. It's not affecting the negotiations with payer to date one way or the other.
Good. There's one more question.
Holger Blum, Patinex Management. I think last year you alluded to cardiovascular disease, NASH, and chronic kidney disease as future areas for you to focus on. I think today you presented several projects in cardiovascular and NASH, but nothing yet on chronic kidney disease. Has it been more difficult there, and what can we expect maybe for the next Capital Market Day that you can show us then in terms of pipeline?
Thank you. Mads, you're eager to get in here, I can see.
Yeah. It's not all about finances, no. The FLOW trial, I'm not a numbers guy, but the FLOW trial is actually very exciting. It's hard endpoints. It's about death and dialysis and so on, and that should grant us a chronic kidney disease indication for Ozempic that we will then bridge into RYBELSUS. That's the agreement with the agencies, assuming certain factors such that the SOUL trial has the same endpoints as secondary endpoints, even though the CV trial has the same endpoints as the FLOW trial and vice versa, so we bridge. The other thing is we just in-licensed a so-called VAP-1 inhibitor from a Japanese company called UBE as late as last week, and that has potential not only in NASH, but also in chronic kidney disease.
Good. Thank you. Carsten, back.
Yeah. Thank you. Just a question to the financial outlook to the two targets you have out there. The 6%-10% sales growth is pretty easy to understand for Mike. Doug, you are supposed to transform 70% of sales in the U.S. Is there any way you can quantify this? What will 10% conversion give us in terms of P&L? Also, the footnote says 2015 to 2022. How much have you actually converted since 2015?
I think Lars addressed it appropriately just a couple of minutes ago, and I would say that, as I said in the presentation, we're about halfway through that conversion today. Again, we're not going to get into the specifics of the 70% and what that means in a P&L standpoint. I think Lars addressed it nicely in his close.
While doing this modest growth, we still aspire for having 0% to 2% growth. On the other side of that, the full kick in, so to say, of the GLP-1 growth. That should yield, say, mid-single digits, and we will have a better feel for that when we get further into the RYBELSUS launch and see how that uptake is. The initial signals are positive, but as Doug mentioned before, it's on a very early basis, we cannot really do a straight line based on that. Move over here.
Thank you very much. It is Matthew Weston from Credit Suisse. You have given us guidance for gross margin in terms of 2020, 2021 and 2022 capture the Clayton plant coming on stream. Obviously you highlighted DKK 2.5 billion of spend, so I presume a big step up in depreciation. Can you just give us some help in 2021 and 2022, how the rollout of Clayton and then the full impact of Clayton will add further pressure to gross margin over that period? Because you obviously don't have the offsetting one times in 2019 that you have talked about.
I think it was very clear that for the medium term, we expect a broadly stable gross margin, first of all. I covered the dynamics in 2020. Going into too many details in the following years, I don't want to go there. It's important to note a couple of elements. First of all, Henrik covered our approach to taking Clayton online. It's a staggered approach. It's not like you get DKK 2.5 billion and multiply it by X in depreciation in one year. First you have the staged approach in terms of when we start depreciations, and secondly, there's also a phasing vis-à-vis that when we start depreciations, then the product goes on inventory and then they're being costed in the P&L at a later point in time.
You should see the RYBELSUS impact from the Clayton facility as staggered over a number of years.
There was one more question for this table.
Hi, [Susan Che from Everett Harris]. Could you provide more detail, I think, on why you said the textbooks have to be rewritten on the mechanism of delivery for oral biologics, and what scope of your products might eventually be delivered this way? Also a little bit more on the timeline of that.
Good. Great question. Mads, you have rewritten the textbooks, not personally.
With my friends and colleagues.
Yeah.
No, I think any textbook from med school will say that molecular weights above 500, 600 Daltons, i.e. dipeptides and above tripeptides, will not be absorbable via the human gastrointestinal tract or other species. It is a rewriting of the textbooks. That is true. We have normally said that peptides up to the size of 30, 50 amino acids, are amenable to the absorption enhancers, the GIPET and the SNAC that we are deploying, and that when we go to bigger proteins, such as factor VIII being a very big example, then you need to go into orally administered delivery devices that will make sure the absorption takes place directly into the gastric mucosa, like the SOMA device. We have a strategy. We're not going to talk about it today, but we do have a strategy in this field.
That goes both for smaller peptides and how they're delivered orally, and for big proteins and how they will be delivered. I suggest it could be a topic for future deliberations. I don't think we have time for it right now.
No.
We are going to go there.
You might corner Mads during the drinks and my experience is that he's very guarded, so he ends up talking. Over here.
Thank you. Eric Le Berrigaud, Bryan Garnier. Maybe some aspiration also towards conversion from profits into cash flows. Maybe some missing points here. Should we expect any meaningful change in tax rates, in capital, not in CapEx actually, but maybe in working capital, given the changes in mix in product, in geographies and maybe also share buybacks or anything like this that could impact this capital ratio?
Yep. I think we are kind of hinting that we will keep the same discipline that we have deployed in the past. Karsten, some specifics about.
Yeah
Tax rate, working capital, et cetera.
Yeah, you shouldn't expect any structural changes vis-à-vis our tax rate, first of all. In terms of our ongoing cash conversion and working capital, the only significant change in the working capital that we're looking at is, of course, when you get a new product on, a potentially big product like RYBELSUS, then of course that drives additional inventories. At the same time, we are de-risking our manufacturing network, we can also adjust some of our risk inventory policies on our work in progress. We have some balancing effects there. Nothing major on trade receivables, et cetera. Continued high cash conversion and allocation to shareholders. You saw the CapEx going down in Henrik's presentation. Of course, there might be, depending on the opportunities we have, some more spend on business development activities, but net, still very high cash conversion.
We'll take a final question from the back. Yeah.
Keyur Parekh from Goldman Sachs. A few kind of things. One, your underlying growth this year is going to be at the midpoint 5.5% plus 1.5% of drags, 7% underlying revenue growth in 2019. Your aspirations as you lay down today, roughly 50% international growth at 6%-10%, that gives you 4% U.S. Like you said, broadly flat near term, single digit longer term, gets you to 5%-5.5% overall growth for the company. You're sitting on flat margins. You're sitting on the biggest product launch you've ever done. Should we think of this longer term strategic aspirations going back to the good old Novo days of being really conservative when you set initial guidance? If that's not the case, then why are your aspirations not higher, and why isn't the board pushing you more towards a higher aspirational target?
Thank you for that question. I think we have outlined our growth opportunities, and we have said at least a third of the diabetes market, at least doubling up obesity. We have a fantastic momentum in our GLP-1 business, and we of course expect that to be even stronger in the RYBELSUS launch. We have not seen that launch yet. The guidance we give is an overall guidance of the dynamics in established operations moving towards the high end, and then we talk to make sure that everyone understands that we're converting the book of business in the U.S., and that we need to get through to show the real growth potential of the U.S. I'll not comment on your, say, underlying math. That we keep for February 5th. It's also important that we will be investing in the launch we have coming up.
We have shown that when we invest in our launches, we can drive very strong uptake. We are going to do that on RYBELSUS also. There will be 2020 is a year where we will be determining the trajectory for RYBELSUS in the U.S., and Doug mentioned that our investment level is a function of when we have access so we can go to strike mode. If that comes late, obviously there'll be low investments. If it comes early, there'll be high investments because we can invest for a bigger part of the year. You'll also have the sales coming in, and so the higher exit rates flowing in for growth acceleration in 2021. I think that's as precise we can get it for now.
We'll soon be releasing our outlook for 2020, and that will of course be based on deeper insight into where we are on the RYBELSUS launch. With that, I'd like to thank my colleagues, I'd like to thank all of you for coming. This is the drinks voucher, so you need to fill out this survey. With that in hand, you can get access to management and drinks outside. Thank you so much for coming, and see you outside in a short while.