Afternoon, everybody. I'm James Quigley, your VP Pharma and Biotech Analyst for JPMorgan, standing in for Richard Vosser. It's my pleasure to welcome you here to the Novo Nordisk 2nd Quarter Management roadshow. With today, we've got the CEO, Lars CFO, Carsten and Chief Scientific Officer, Mads. So with that, congratulations.
I thank you for hosting us. We'll go through the slide deck from our release relative quickly, and then we'll have ample time for Q and A. This is our sales update that I will give, R and D update and then the financials and outlook. You all know that we'll be talking about the future, and the future might not turn out exactly as we preach. So take care about these forward looking statements.
So when you look at the 1st 6 months, we're very pleased with how we have started the year. We see strong commercial momentum from our portfolio of products, actually in all markets, across all products, we are still facing tough pricing in the U. S, but we see very strong commercial momentum also in the U. S. So this has led us to operating both our outlook for top line and operating profits.
We also made a small change through my executive team, Lars Green, whom some of you know, has passed in finance in Novo Nordisk, has moved on to a position as Chief Financial Officer in Novozymes. And that has led me to elevate Monicata into the executive team. So we have a dedicated people and organization. This is known as terminology for HR at the table. And then Lars' other responsibilities have been allocated to cast and tanite wolf.
So I believe this is, again, a strong team with a good blend of long timers, newcomers, genders, nationalities, so a good diverse team. If you look at the sales growth for the 1st 6 months, 5% growth driven by International Operations and then offset by the decline of 2% in North America Operations. And when you look at International Operations, it's worthwhile noticing that we see all regions pulling through. So strong growth coming out of all regions. The U.
S. Is what drives down North American operations. So U. S. Declined by 3%, linked to the wholesale reductions we saw in the Q1.
So that's a geographical split. If you look at the product split, we see that we have a flattish growth insulin, and that's composed of IO still delivering strong growth in the insulin business, and that's based on the full portfolio of products that's increasingly being rolled out and prioritized in IO markets. And then we see a drag from the U. S. Market.
Despite the fact that we actually take a bit of share, the price development means that we see a declining U. S. Insulin business as we have seen for quite some years now. Very strong momentum in the GLP-one franchise, growing 18%, and that's both International Operations and North America. Solid 56% growth of our obesity business, again, both International Operations and North America.
And then we actually see the strongest biopharm growth we've seen for some quarters, biopharm growing by 3%. If you look again on our competitive performance, we are adding 0.8% market share in the global diabetes market. So that's a relative strong commercial performance. And we have been investing in number of products for many years. So we have this market state approach where we are increasingly letting markets in several operations own their own markets, make sure that gets as close to the customers as possible, leveraging our portfolio, and that turns into this increasing market share.
We're also taking share in the U. S, and you can see on the right hand side that we're actually adding also infant market share, somewhat compensating for the price pressure in the U. S. If we look into Ozempic launch, we have now launched in 21 countries, 18 of those being in Europe. And here you can see our uptake in Europe, strong across all markets.
Some markets grow slightly lower, have a slightly lower uptake. Those are markets where you do not have one step broad access, but you have to secure regional access after national access. That's markets like U. K. And Sweden.
All other markets, very strong uptake. And you can see that with our increasing share of growth, we are now approaching our market share and hence, a turnaround in European GLP-1 market share performance. Similar strong performance in the U. S, more than 50% no, 53.3 percent share of new scripts and very strong performance. And we see a continued strong growth in the U.
S. Market, fueled by the launch of Ozempic, but actually each and every recent launch of innovative products has fueled that market growth. Saxenda continued strong momentum. We actually see a step up in growth compared to the average growth we have seen last year. So we're very encouraged.
It's slightly different business in the term in terms of reimbursement and a lot of the growth actually being driven by out of pocket spends in markets outside of U. S. Biopharm, 3% growth. We see that the dynamics around NovoSeven is slightly more positive than we had expected. We see that there are still breakthrough bleeds for patients using HEMLIBRA, and there NOV7 is the preferred rescue treatment.
The broad portfolio of hemophilia agents also helps mitigate that. So NOVA-eight is doing relatively well, and now we're also rolling out our long acting Factor VIII and IX. With that, Mads, I think we should go into Arndi.
Thank you, Lars. Thanks. As you are aware, we are trying to maximize the value of the semaglutide molecule by also conducting even further mid outcome trials, including a renal outcome trial using Ozempic or semaglutide 1 milligram called the FLOW trial to get diabetic kidney disease onto the label. Likewise, we have a time driven diabetic retinopathy trial seeking to, over a 5 year period, document that the excellent glucose control offered by semaglutide will enable eyesight, as measured by the ETDRS scale, to improve by 3 points or more over a 5 year period. Sustained Forwarder is a life cycle management activity basically poised to make intensification of Ozempic 1 milligram possible.
As you are aware, over time, A1C increases. And by going to 2 milligrams, you can have further extension of the stay time on that brand. Sol is an oral cardiovascular outcome trial to further confirm the protective benefits of the semaglutide molecule in the oral version. Now looking at what has happened over the last period, quite a lot in the overall milestone or pipeline. SEMA has been submitted as a tablet for approval in Japan.
We've got the New England Journal of Medicine data from the ELIJIT trial on to Victoza label with a patent term extension in both U. S. And Europe. We have a couple of interesting approvals in Asia, Saltify in Japan and Rhizodeq in China according to a fast track approval path actually in that country. And a couple of Phase 1 clinical interest new molecules, 1, a very special insulin for diabetes and LAGDF15, which is a new mechanism within the field of appetite regulation.
Biopharma wise, Esperoct got approved in Europe, following on to the U. S. Approval approximately 1 quarter later, and we are now in Phase III with the kids with growth hormone deficiency for somapacitan, the so called VL4 trial. And also, I think I'd like to highlight the Gilead collaboration where we are taking our semaasset and combining that with a non steroidal FXR agonist and also a ACC inhibitor from the Gilead pipeline so that we will have a coinciding of Phase II data from the big biopsy study we are doing with ZEMA as monotherapy and these combo data with the Gilead molecules around the summer of 'twenty, I. E, next year.
I will not go through this one in great detail, but only suffice to say that in terms of diabetes milestones over the next couple of months or quarters, for sure, the oral semaglutide action date on September 20 with the FDA is the number one thing to look out for, followed, of course, in January by the cardiovascular indications, both for Ozempic and for oral semaglutide. In terms of biopharm, I think we should highlight that concizumab, our pan segment antibody against TFPI for all kinds of hemophilia is going to start Phase III across these different hemophilia segments during the second half of this year, but also that we're submitting somapacitan for the adult growth hormone deficiency indication in both Europe and U. S. Over the next couple of quarters. I think I'll let it be there and hand over to you, Karsten, for the financials.
Thanks, Mads. Financials, as you heard, the last 5% sales growth in local exchange rates for the first half. We have tailwind from currencies. So the U. S.
Dollar is up some 7% compared to first half last year against the kroner. So that's why we are reporting 9% sales growth. On our gross margin, in same currencies, we're down 1 percentage point, and that's purely ascribed to U. S. Pricing.
So everything else is benign. Then we keep investing in our business. So our sales distribution is up 4%. Main driver is investments in growth products and markets and international operations. So that's the main driver behind the 4%.
Then R and D down 10% in the same exchange rate. That's not because we are cutting the math big time. That's we had the gain in Q1, as you recall, about the inventory reversal, where we had a onetime benefit to our P and L of some DKK 500,000,000. So that's one driver. Adjust for that, R and D is flat.
And then do bear in mind, we're kind of in between trials. So we've been ramping down the PIONEER trials, and now we're in the process of ramping up in especially on the Select program and then the 4 late stage trials that we put into our announcement. So it's kind of we're ramping up again in terms of patient loads. So that yields a 6% operating profit growth and reported 12% given the dollar. Then we have, of course, the hedging approach that has not materially changed compared to what you've seen in prior quarters.
And our tax rate also in line with Q1. So based on that first half performance, and I would say mostly driven by the strong 12% growth in IO, we've been able to strengthen our outlook for the year. So now our local currency sales growth is 4% to 6% compared to 2% to 5% at Q1. So we're raising the midpoint there. And we're also raising the midpoint for operating profit.
We raised that with 1 percentage point by raising the floor in the guidance range for operating profit. And then we have some minor tweaks on net financials, which is linked to emerging market currencies. And then we're tweaking narrowing the range for our free cash flow, but no major change there. So with that, these are the key takeaways. Lars, I don't know if you want to go through those or you
want to I think we have been through them. Maybe we should just get over to the Q and A. But I'll just wrap up by saying that we are very encouraged by the momentum we have right now. We can see that some of the changes we have made in how we execute commercially are paying off. We've also been investing more, but we can see that it responds.
And what Wes and colleagues for many years have been developing, we are getting more value out of than we have ever been. So we see that as boding well for the future. And of course, the news we have coming up late September in terms of oral sema will be very exciting in terms of momentum, further accelerating going forward. But I think we should invite Mads and Karsten up, and then we can take your questions. Yes.
Sorry.
Thank you very much. So first question on Victoza. So there was a rebate adjustment in Victoza, which similar level to last year, so assuming around DKK 300,000,000. What are the key drivers for that? If it's for prior periods, does that mean that the 2% to 3% of channel mix that you've mentioned in terms of the growth impact?
Is that could that go up in the second half? And secondly, on the special new insulin, the new generation insulin, What have you seen in the early stage trials and the preclinical models that makes it differentiated versus Tresiba and also the long acting the weekly insulin?
Yes, Arsten.
So prior periods, that's pretty easy because on Tier 21, the prior periods nets out. So it has a zero impact. And hence, the channel mix in Q2 is similar to what we saw in Q1, channel payments. Okay. I'll try to answer equally simply on a more complicated question.
In general terms, after the Baselklarg thing in 2016, as a company, we've decided only to pursue engines that do something over and above pharmacokinetics improvements. That means either it has to go beyond other route, such as oral, or it has to be doing something unique, such as being glucose sensitive and only basically not demand glucose monitoring and so on. This is actually falling in another category where it has benefits on comorbidities related to diabetes by having a unique pharmacodynamic relationship. And I think we'll get back to that more into the future, but it is not just a Tresiba Me better at all. It is a basal, but it's basal that does other things.
Thanks. Somewhat tedious housekeeping question for Carsten on the financials and then one for you, Lars, on China. So maybe the more interesting question first. Look, I know you're heavily reliant on the old portfolio at the moment in China. Can you pardon my or pardon my forgetfulness, but can you remind me the time lines you're working to in terms of filing Ozempic in China, oral sema?
And am I right that Tresiba and Victoza are already on the market and have received reimbursement? So just terms of the future growth drivers, what just remind us the time lines for China. And then for Carsten, on the $2,000,000,000 plus investment you're making, can you just give us is it €100,000,000 depreciation from 2022, just the depreciation schedule? And then lastly, the dynamic, I'm not going to ask about oral sema pricing, but given this is an oral drug, should we should the market be thinking about quite heavy sampling in the first year just to make sure that we don't get carried away with that initial ramp in sales?
So first on China. So Victotala is on the market reimbursed and doing very well. Tresiba, we do not yet have broad reimbursement. We are in the final stages of getting that. And that's a very important product for us to get onto the market because there's a dynamic dynamics now where we are losing in the basal category.
There's a relative strong glargine market, and there's even a couple of glargines in the market, at relative attractive price level. So hopefully, we will have that in the near future. We are also pushing Rizodeck in China, so we have approval. We just have to have market access. So we see actually an interesting dynamic in China where we are a bit behind in getting, say, the growth drivers from the rest of the world to the market in China.
So we see a good opportunity in that. And it's a sophisticated market in the sense that the Chinese regulators use some of the tactics they see from around the world in how to manage cost and pricing. So we see that we get fairly good price. And then obviously, you have good access when you have that. And Maersk, maybe you can comment on timing for Ozempic and oral sema?
Yes. Semaglutide, as soon as all the clinical activities are done, of course, will be submitted with priority. The discussions we're having with the Chinese FDA are actually moving towards them wanting innovation earlier to market. So all the usual prerequisites for not being able to start a Chinese dedicated trial until you have home market approval. All of that seems to be becoming a thing of the past, which I think is good news, but that is really what is underlying why we've been so much delayed as have other companies.
But actually, for the time being, Victoza is the only reimbursed GLP-one agonist in the Chinese market and is doing well. But of course, we're moving as fast as we can. I think I'll give you a time line when we're a bit closer. But the other thing to say, Sema, the obesity market in China is not really there at this point, but we feel a great deal of interest also on behalf of the both health but also regulatory authorities of looking into BCG in China. So that's also on the radar.
Yes. And then our Clayton investment of $2,000,000,000 plus. So of course, the positive note is that our CapEx, we see that coming down over the coming years. Right now, we're at this DKK 9,000,000,000 this year or some 8%, and we see that coming down over the coming years. Then, of course, it doesn't come for free because then we start depreciating.
Our approach to depreciations for the Clayton side is that we start depreciating when we start to use the assets. So you will not see kind of a significant onetime step up. So it will be phased or starting with the utilities in 2020 and potentially a purification partly in 2020 and then come recovery and fermentation later on. And then there's the entire inventory effect of that. So what I simply put, don't expect a step up, but expect a gradual ramp up over the next 3, 4 years.
On sampling, sorry, could you just repeat?
Also, whether we're going to do all semi sampling?
Yes. So like any other loans then sampling is part of that. And yes, sampling is a safe distribution cost, of course.
Jo Walton at Credit Suisse. Two questions. 1 R and D, concizumab, what sort of patients will you be looking to recruit? And how would you how should we think about the design given that we've now got something like HEMLIBRA out there and you've got long acting and regular Factor VIII? What would be the appropriate comparator?
And how would you expect to see that enroll? And my other question is 1 on health care reform. A few months ago, we were thinking it was going to be great that we might get rebates removed. And you do some really fantastic slides, Slide 60, just highlighting just how high your rebates are. Now we seem to be moving to something without rebates with a change in the donut hole and possibly a sort of Medicaid type I wonder if you can talk about how you think health care reform might come about, what you think you as part of pharma can do to influence it to be perhaps more positive?
And as investors, should we just assume that the positives that you get in the lack of doughnut hole are eaten up with Medicaid tax or something like that? How would you suggest that we forecast changes in the U. S?
Yes. Sure. I'll start with that. So I think we have seen politicians in the U. S.
Agreeing that something is needed to improve affordability for patients. So that's probably the one thing politicians can unite around. When it comes to actually uniting about what to do, it's a completely different topic. So as you referenced through the first proposal to take away the safe harbor for rebates, I think it was originated out of a wish to make products more affordable for patients. It dies because it turns out that politicians realize how much rebates are actually funding the health care system.
And if you take that away, it might be that it becomes more affordable for those who are actually sick. And typically, those who benefit the most from rebates are in disease areas like diabetes, chronic diseases where there is choice, and that leads to actually significant rebates being sucked out. So potentially on the account of many would have to pay more for insurance. And so the budget deficit that comes out of that kills that proposal. I think that's quite symptomatic for the discussion in the U.
S. That while everybody can agree, then we need to do something for the patients. Often, it ends up costing for the one who paid for it. And then the solidarity with the patient kind of diminishes. If you look at the Finance Committee's proposal, which is interesting to learn from because it's actually a very powerful committee.
It's a committee that's bipartisan. So they align about a proposal to bring forward. The first thing that happens is that actually both sides start discussing and coming with amendments to it. And suddenly, it kind of disappears slowly again. So I cannot tell you what will happen, but I can my feel is that it's becoming increasingly difficult to actually unite.
And there's a lot of excitement about parallel import, importation, reference pricing, all of that. And when you start then looking into the complexities of it, it turns out that that's not something you just do overnight. So in parallel, I think the industry is looking at what are the things we can do to actually help some of these patients. And I can tell you that we are focused on individuals who lose their parents' insurance coverage and live with Type 1 diabetes, that's a very fragile group because you have low income. Typically, you have no insurance or you have low quality insurance.
We have increased the threshold for how to qualify for the patient assistance programs we have. So an individual, a young individual making less than $50,000 a year can get free insulin from Novo Nordisk if you do not have insurance. A family of 4 making less than 103,000 can get free medicines from Novo Nordisk if you have no insurance. When you have to these get to these high deductible plans, that's tricky because then you actually have insurance. But it's the insurance plan design that's taking away the affordability from you because you're not the rebate, we pay are not being shared with the patient.
So that's a bit trickier. But we're also considering how we can do that. So I'm not overly optimistic in terms of the political system actually solving it. That's a problem because that just means that the pressure continues. And it means that we need to consider what can we do.
But again, as you alluded to, the high rebates means that we actually have some room to work with, and there are different opportunities. One of the recent proposals is linked to creating the opportunity to have a second NDC code. So it was portrayed as actually importing your own products. I think that's because importation is, from a political point of view, sounds like a solution. But it is, in essence, that you have additional product, which you sell at a net price.
So I think within the system, there are some opportunities. It would be patchwork. It's not necessarily these affordability issues, I think, we can actually bring forward in a way where it's not changing our net price for the product a lot, but it's changing for the patient a lot how the affordability looks like. So my concern or the risk I see is that if nothing is done, the political pressure increases, and that means that you look at industry pay for us, you ask the industry to pay for something like what we have currently with the 2% of global sales impact, the €2,000,000,000 impact on our sales because this coverage gap mitigation. So I think that's a bit of a recap.
I can unfortunately not tell you how to model this because I don't know. I think most people are struggling a bit and actually figuring out what could happen. It becomes very fast, very political and a lot of individual politicians probably having more loyalty to the state and the constituents than the party when you have these discussions. Yes. So when you look I'm not coming on individuals, but if you look at the totality of the Finance Committee proposal, I think the totality of that was neutral or maybe slight positive for us.
Obviously, there were elements that were more negative than others. So we already give 100% rebate in the Medicaid. And if you kind of increase what we should pay, it turns a bit it's a bit of a funny market because then you actually you give your products away and you also put money in the box when you give it away. I don't think that's really a market structure that's sustainable. So obviously, I don't think that's a good idea.
On the other hand, the Part D reform that was proposed would actually benefit a company like Novo Nordisk selling relatively inexpensive products compared to some of the more expensive Part D products. So yes, I can only observe that whenever these proposals are being brought forward, there is some initial actually a very dramatic share price reaction. And then a few days later, the whole political process starts. And the U. S.
Government structure governance structure is one of making very difficult to make dramatic changes. So yes, I can keep up with powers on this topic. I'll try
to do the much easier concizumab question a bit faster because if you compare to Envipra, then mechanistically speaking, concizumab doesn't need a specific activated clotting factor to be present on the platelet like factor 9a in the case of IMVEVA. So that means that a clear niche that is obvious and which is why we got a breakthrough status from the FDA is, of course, hemophilia B to become the 1st subcutaneous agent and also hemophilia B with inhibitors. But that being said, the efficacy of concizumab is expected to be similar across these various populations, And that also means that we're making a broad program. And in terms of comparators, the CBAS division for blood products has not had a history of asking for active comparators also because it is a rare disease. So what you do is you take the historic bleeds and they're there, your historic comparator, and then you actually just monitor what is the ABR, the annualized bleeding rate, either median or mean, and then you go for a low target and hope for the best results in that regard.
And I think we have gotten the dosing right. We've done a Phase II where we actually fully understood that there was no safety concern, clinically speaking, even at the highest dose we were using, and that has paved the road for discussions with the agencies where we actually can do proper dosing from the get go in Phase 3. So I think we have done our homework. It's going to be a cross segment agent, hemophilia A, B and B and A with inhibitors. And do bear in mind, Joe, that it's not as if in a given therapy area, one drug class sweeps it all.
HEMLIBRA is a fantastic product, but it is not the drug to end all hemophilia treatment innovation because there are patients either who do not respond or who bleed more frequently than is reasonable or for other reasons will not be targeted by HEMLIBRA. So obviously, we see a place for a new mechanism of action, in particular, if we are 1st in class and have good data. So we're optimistic, and we're starting the whole thing late this year. In a good device and top to change the administration. Yes.
Thank you, Carsten. That's actually my usual comment because actually in Phase II, the feedback we got, we used the leading Novo Nordisk FlexTouch delivery technology. The feedback we got on these patients who've always had intravenous infusions and suddenly they have an ultra fine needle and they felt nothing. That was unique. So the user experience so far is really positive.
Thank you.
It's Mike Loechten from UBS. Two questions about the margin, please, Carsten. 1, you were talking on Friday about why the increase in operating profit guidance for this year is slightly less than the top line. You referred to some projects you were able to now kick off that the first half performance was better. So just wondering if you could flesh it out a little bit more.
What is it you're working on now that previously wasn't on the cards for this year, maybe save for next year? And then the second question is around the gross margin. So like you said in your commentary, down 100 bps in constant exchange rates, but GLP-one growing 18% in the first half in constant exchange rate, insulin is down. Presumably, that growth is mostly U. S.
So can you talk about that negative drift of the gross margin relative to the GLP-one growth that was extraordinarily strong in first half?
Yes, yes. So just covering gross margin, and I said it initially also. So the 100 bps in local currencies gross margin erosion is driven by lower U. S. Prices.
So the product mix benefit we get from selling more GLP-1s is offset by negative geo mix by IO growing 12%. So basically, human insulin volumes or insulin not in human, but insulin volumes in American markets. So that's the balancing part to the GIP-1s. And so the first one was
The optionality
there. Yes, sorry, the guidance ranges. So on the guidance ranges, if you take all for Inovo as a company, then with an operating margin north of 40% in the 45% range in the first half, then the value creation for shareholders and our ability to drive value creation is not through a leverage type strategy, but more so through a top line expansion strategy. So of course, that's what we're looking at. So the logic choices for us to pursue investments in and keep driving and allocating as many resources as you can against this, keep pursuing growth in IO, geographies and products.
GLP-one, I'd say globally, but especially in the U. S. With the pressure on DTC campaigns and so on and combined with obesity as another one. Then we look at our pipeline and both look at our R and D ratio. So both looking at early research for future generations of products, but also the ramp up of our late stage portfolio.
And then the 4th and last thing is oral sema pre launch preparations. So all the pre launch we can do to make oral sema success is, of course, also high priority. So those are the 4 dimensions. And you shouldn't think about this as something that just pops out, but it's part of us looking at these are our strategic priorities and value drivers for the company. Then with the strong performance in IO, then we look at so what's the right balance in yielding a higher return to shareholders while also investing in the company for future growth.
So two questions, please. So first on rizodeg. So it doesn't get much love in terms of questions. But China and the premix market is still a significant growth market. And when we speak to the Chinese physicians, that doesn't really seem like that's going to change.
So premix is going to be largest market moving forward. So how should we think about NovoMx and RhyzoDeg in China? Should we expect cannibalization? Or could RhyzoDeg be a relatively large product standalone on top of Novo mix so that you got a very big mix market in China? And then my second question is on obesity and the OUS market.
So my understanding is that the OUS market is completely out of pocket today. And tell me correct me if I'm wrong on that, but you guys are obviously growing extremely fast in that region. When do you actually think you'll start to get reimbursement? Which regions do you think you'll get reimbursement in first? And how could the growth rate change considering we've got such fast growth just based on out of pocket?
Thank you.
Will you talk to Ryzodeg?
Yes. I had the privilege, Wimal, of attending the result meeting on the Rhizotech China study quite some time ago, but I love seeing results, and I remember them typically quite well. And this set of data was good. So if you look at NovoMx30, how that is differentiated versus MxTAR-thirty is actually mostly, to be honest, in the late postprandial phase where you have less of a shoulder, which gives you less of risk of hypoglycemia, but it's small, yet it's really meant that Nuvo mix became one of the top products in the Chinese market overall. Ryzodeg really beat certain parts out of the Novo mix in a head to head comparison.
So Ryzodeg data, if and we got Fast Track approval, if and when we get reimbursement, it is natural for us to be just like we're doing with Tresiba, that this is the new thing. Do bear in mind that the meal related component, because we still did take in quite a lot of carbohydrates, does call for quite a lot of premix usage in China, and this is truly 2 different insulins in one combination for the first time ever. So we'll go all in on Ryzodeg when we can based on strong data and a strong label. It's a little bit interesting because when I compare the Ryzodeg data with the Tresiba data, I would actually say the Rhizotech Chinese data are even better than the Tresiba Chinese data. But as Salas alluded to, what has happened over the last years is that Sanofi has priced Lantus at a very high level compared to the premixes in China.
So each patient, to my understanding, on a new basal like Tresiba or LENSUS is actually more valuable to the company than a premix patient. But we haven't disclosed how Rhizodeq is being priced because Ryzhodeg is Tricipa plus, you can argue. So I think it's more for the commercial folks to work out. I think just 2 additional data points. So 1, in Japan, we've shown that rice steak can really take over after Novo mix.
So we've seen Japan used historically to be a mixed market, and we see really strong uptake of Ryzodeg in Japan, so that's one data point. Another data point is in the Chinese insulin market is growing high single digits in volume currently. So and it's across all three segments. So launching into that market is both launching for the new starts, which, of course, easier to acquire than drive switches. So that's a benefit.
And then on top of that, with competition pursuing biosimilar mixed insulin, then this is also a way for us to upgrade in the mix segment and compete in the mix segment.
And on obesity, it's correct that outside of U. S, outside North America, it's largely out of pocket. And so it's an interesting reflection that Saxenda comes at a relatively high price point because we have linearity in the pricing, yet people find it worthwhile paying for. So in a lot of settings, we talk about health technology assessments, etcetera. Here, we actually have the consumer using the product saying that this is actually worthwhile paying for.
So there's a massive spend on all kind of weight management tools. And so there's an established market for that. There's not an established drug market for weight management because efficacy has not been good. So we see that one thing is to actually establish obesity as a disease area, and that's probably what it takes to get most, say, advanced economies to then also reimburse for it. So that's a journey that's ongoing.
So a part of our, say, market building activities is to create that market. So establish it as a disease, make sure that physicians are educated in that now there's a medical intervention to obesity. And of course, we are hopeful that semi obesity, where we'll have some data coming up in a year's time, will further open up for that. Of course, we're also doing late stage outcome trials to prove that it's not just about weight management, it's actually about health management. So it's a longer horizon that we're building for, but we believe that we both have the products that can make it a successful journey getting there, but we also have the innovation that can actually be brought into that market when it's fully established.
So it's a strategic commitment for us, And we can see that others are kind of getting to the same conclusion that it's worthwhile developing products for this because why is it we treat type 2 diabetes? Why is it we let obesity lead to a number of other diseases when you can actually address that by medical intervention. So we enjoy the growth, and we keep investing in building for our long term here.
It's Keyur Parekh from Goldman. Three questions, please. Lars, the first one for you. Since Nova's inception, the way you think about long term targets has been pretty consistent. As you think about the variables, I think you alluded to this both on the call on Friday and today as well.
But as we think about when you revised long term financial targets for the next cycle, what are the variables we should be thinking of? Is it still operating profit growth or should we be more focused on kind of top line growth or are there something else beyond that? One. Secondly, as you think about geographically, do you expect North America to return to growth in 2020 given everything going on or will North America still be a drag on your growth? Linked with that, international operations historically used to be kind of 4% to 6% growth.
First half is 12%. What should we think of as a sustainable growth rate going forward? And then lastly, on NovoSeven?
No, into a 4th question. I'll bundle some of the first ones into one answer.
The NovoSeven, I think Mads, you said on the call on Friday that when you originally guided to down kind of 50% or 50% being at risk, that was under certain assumptions and things have worked out better than you expected with contraindication for fiber and things like that. So what is the new number as opposed to the minus 50?
Good. So you all know that we have operated with long term financial targets for many, many years. They have been set in a way where we have had an anticipated, say, 4 to 6 years ambition horizon. And we are approaching the end of that horizon for the past guidance. But I'll not today give any speculation about what we'll do after that.
We are focused on achieving the existing long term financial targets. I think we are well on track to do that. And then we have also announced the Capital Markets Day where we will have a bit more time to explain our extra story and how we look into the future. In terms of growth, I will not guide for 2020 either. It's clear that we have 2 segments, 2 major segments of U.
S. Business. 1 is the insulin segment, 1 is GLP-one segment. And for years, we have seen a declining price point in the insulins. And this 1st 6 months, the value of the insulin market dropped by 12% compared to a year back.
So we have had this trend for years. I think there will also be price pressure next year. I'll not get into speculating the clearly positive momentum we have in the GLP-one side of things, how well can that mitigate that, we'll guide on 2020 when we get to the full year. IO is growing really nicely to 12%. We have said that underlying growth is 9% to 10%, and that's what we expect for this year.
So far, knock on wood, this is a year without major well, I think we have issues around the world, but we'll not have any major issues from a geopolitical of a geopolitical nature that actually impact our business. I think there are enough challenges around, but not something that has hit us. So the 9% to 10% should be seen as a run rate this year in a year without major issues. Of course, you can think about Iran, just one country you can talk about, trade wars. I don't think we will be hit by that short term.
I think we have a China to China set up and a U. S. To U. S. Set up.
But I think there are enough issues in the world that you can see that level coming down in a year where we hit by 1 or more of these events. But stay tuned for the Capital Markets Day, then we can give a bit more terminology at how we see the future growth.
Louis Ham? Yes. Just quickly, so I think what we said on Friday or tried to say is that we originally speculated that the Hemlibra targetable elements of NOVOSAVEN consumption, I. E, that did not include operative or surgical recovery, did not include acquired hemophilia, did not include on demand acute bleeds, etcetera, but the rest, I. E, the prophylaxis part of IMNIPRA, that was at risk.
It's quite clear now that we're not changing guidance, by the way, because we need to understand the data points much better. But it's quite clear that the slope towards that potential trough level has been softer than expected. And part of that is, of course, due to the fact, as I think we alluded to, that in real world, HEMLIBRA patients do actually bleed every now and then, and they can only use NOFA-seven, and that is disclosed both by us and by Roche for patient safety. So that is a positive that we are not predicting those days. We've been better and better at educating the medical community that when a patient who's not known to be a hemophiliac but who still bleeds profusely during surgery, during cancer treatment, during part of birth or whatever, that should be investigated for acquired hemophilia.
And if that is the case, you need to treat with NOVOS 7. And we're seeing more of that. So there are some subtleties are in favor of NUPLO7, but we don't understand the whole environment well enough to change the guidance. We're just happy that it is shown to be more resilient than our original speculation. And perhaps just adding one point to that, and you followed our business for a long time.
Just go back to full year last year, NovoSeven sales down 11% in constant exchange rate. So it's just the CFO cautioning that the trend is still downwards on NovoSeven. It looks better, but don't judge it on 2 quarters, including a positive reval adjustment.
You've had your hand up a number of times.
So what will be the key topics for the CMD? And also would you consider guiding for 1st year sales of oral sema as you did for Ozempic? Yes. So CMD, we'll get back on that one. So the intention was to we put it into announcement and hope to date, and then you'll keep the suspense there.
But of course, it's a classic explaining our history story and the outlook for the various business segments we're in, including our pipeline. So all semi, we'll come back to that exactly how we communicate about that. Right now, let's just get the regulatory approval squared off, and then we'll talk about commercialization after
that. So as we think about launch into year and the market will obsess on IMS launch curves, maybe just talk about what you think is an appropriate benchmark. SGLT2 volume is very different to GLP-one, and there's lots of reasons for that price positioning. And what's the best benchmark to think about for oral sema? And then beyond volume launch, obviously, end game is sales.
But what are your metrics to the organization in terms of payer access, physician feedback surveys, total GLP-one growth? How are you orientating the organization ahead of that launch? And then just one for Mads. We've talked a lot about hemophilia. Is gene therapy in hemophilia exciting for you?
Do you think that can be transformational?
So in terms of benchmarks, so of course, the logic benchmarks, you have to look in diabetes goes without saying. Even when we benchmark our Ozempic performance, one could say is Ozempic that's simple because then you compare against the latest deal to 1 weekly, that's Trulicity. But is that a fair benchmark or no? Because the market has changed so much. So do we benchmark on scripts where we are like 80% above or do a benchmark on share and what's the right benchmark.
So for all semaglutide, of course, the injectables would be 1 benchmark to look at. And then the latest kind of SDLT II launch trajectories would be the other benchmark to look But there's no perfect benchmark because you know the story of Trulicity and when they got access and the phased approach. And the benchmark is a function of both the market size, but also the access steps and how that works. And we haven't gotten to access, and that's not clarified at this point. So regulatory and then there's the access approach.
And that links into the second part of your question about performance management vis a vis the organization. And in general, in the U. S. Organization, then we make people accountable for the performance on which they can influence in the territories. So they're not accountable for changes either way on formularies.
So if you are like a Tier 21 rep, then if you have a huge formulary win or loss, then that's adjusted in your baseline. So we take all the kind of the pricing contracting market access out of the reps, and it's a very small team that's accountable for that. And we have done patient, physician and nurse research, obviously, with archetypical target profiles, including oral sema. And there, it looks good whether you're in the PCP domain or in the endo domain.
And you could say, we know how to launch products. We have, based on experience, collect the kind of best practice templates. So we know there's a long list of activities we go through, and it's really the market building activities where we make sure that physicians starting with the key opinion leaders, later on GPs, but also the medical directors at the payers really understand what is the product about. So there's a comprehensive plan for how we conduct that. And of course, right now, we follow we reward people based on actually implementing that plan.
And then on hemophilia. So a couple of things, Sachin. Yes, of course, we are everyone is somewhat excited by gene therapy in hemophilia, and so are we. A couple of comments to just start with. A, the 1st generation, at least, will only be utilized for people who are adults in body size because, as you know, the gene transcript will be diluted as the liver grows in kids.
So it's more of an adult hemophilia thing. And do bear in mind that the treating physician, at that point in time, where you're like 18 years old, has typically been in contact with the boy, his family, for years there is a very close relationship over a lifelong experience. And that means that the point in time where they decide to take a concrete action on a given individual, they will realize that in some ways, they're letting go of the treatment principle because it's a one off treatment and it's a big decision. So the things that I when I talk to the hemophilia specialists here is that they are looking into the need for steroid therapy, how good is expression over time, does it deteriorate in year 2 and 3 and so on. But yet they are, of course, also excited on behalf of the patients having the more or more or less bleed free life, if that can be achieved.
So they're really weighing pro and con before they would consider using. So I don't foresee a dramatic because we do have factor 8, 9, 7, Zymlibra, whatnot available. So I don't see a dramatic 1st generation takeoff overnight, but I think it's coming of age, and Novo Nordisk is, of course, looking into where could there be opportunities. I do think the point in time where it will really take off is when you have a non steroidal regimen where you can potentially redose if expression levels go down over time, and you have found a payer model that is acceptable to everyone. So I think there are a few things that need to come into place before and make the hemophilia specialist totally comfortable about the principle before it will really take off.
Starting second round, Michael first, and Pete.
So just a quick follow-up on the manufacturing side that you recently acquired. How does that fit into Clayton? And why did you need that as an external investment as opposed to build it organically?
It fits in perfectly. So no, but it's actually rather simple logic in the sense that we spent this more than $2,000,000,000 building the API facility in Clayton, which has enough API capacity for a very, very long time. So if we run out of capacity on that one, then it's a really, really positive problem. And then where we then have a bottleneck in terms of scaling for oral sema is on the tablet changing facility we have in MOLLE that some of you saw at the last Capital Markets Day. So that and there's, of course, a lead time from your take an investment decision until it gets online.
And then we and a tapestry facility is much simpler type investment. And then we had this make buy decision where we say either we build it ourselves or we buy something which is not completely finished, but like reasonably finished. And then we got a good deal here, and it's in North Carolina, not too far away from our side. So thereby, there's limited investments required to finalize that as a traplacing facility, which will then enable a full U. S.
To U. S. Supply chain from API to tableting to demand. And Carsten, if I can just add from the R and D perspective, it's a beautiful scenario for R and D to be able to actually liberate the facility that's right in the middle of the discovery campus that today is commercial, liberate that for the emerging portfolio of oral biologics that can then actually be made ready for the clinic and then it can become kind of a development facility, which is highly needed because we have high aspirations.
And the final question?
Car2, quick ones.
Yes. The time line on sort of the higher yield or lower volume or however you want to call it, sema? What's the best case time line for that coming to market? And then secondly, would you agree or push back that future innovation, be it in diabetes or obesity, however good it is, will always come in at a lower price point than we have to now? Do you still think that there is the ability to innovate with a premium price to current pricing levels in the and obviously, thinking more about the U.
S. Than the rest of the world?
Yes. So Pete, quite frankly, if and when we understand in totality this is the new formulation, it offers this element of increased biopotency. Then the trick is actually just to do one regulatory trial where you show that this mimics totally an established dose of oral sema. So it's not a big deal. But when you decide to do that trial, you really should feel that you know what dose you put in that new formulation to make sure which, by the way, is patentable and whatnot, but to make sure that you hit the endpoint of showing this is similar to the existing product in that, you can say, clinical trial.
And the short answer is I still believe there's pricing power in the U. S. So that's very interesting and very effective generic devotion of pricing. And you can say that's kind of what we see in a way in the insulin space because there's choice. But if you come with a differentiated molecule just to pick 1, a glucose sensitive insulin, that would be a game changer.
And if you look across innovative products being launched in the U. S, they're still being launched, it's made at very high pricing. So it's a function of the innovation. So I believe there's, say, some commodity nature around some of the existing products. But with a differentiated product, there's clearly opportunity to price that at a different point.
Good. Thank you very much for your time. I hope that it stopped raining. Thank you for the interest in Novo Nordisk, and see you soon in the future. Thank you.