Thank you, operator. Welcome to this Novo Nordisk Earnings Call for the first Nine Months of 2022, and the outlook for the year. My name is Lars Fruergaard Jørgensen, and I'm the CEO of Novo Nordisk. With me today, I have Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Sylvest. Executive Vice President and Head of North America Operations, Doug Langa. Executive Vice President and Head of Development, Martin Holst Lange. Finally, Chief Financial Officer, Karsten Munk Knudsen. All of us will be available for the Q&A session. Today's announcement and the slides for this call are available on our website, novonordisk.com. Please note that the call will be webcast live, and a recording will be made available on our website as well. Call is scheduled to last for one hour. Please turn to the next slide.
The presentation is structured as outlined on slide two. Please note that all sales and operating profit statements will be at constant exchange rates, unless otherwise specified. The Q&A session will begin in about 25 minutes. Please turn to slide three. As always, I need to advise you that this call will contain forward-looking statements. These are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, please see the company's for the first nine months of 2022 and the slides prepare for this presentation. Please turn to a next slide.
In the first nine months of 2022, we delivered double-digit sales and operating profit growth, which has enabled us to raise our outlook for the full year. I would like to start this call by going through the performance highlights across our operations for before handling over the work to my colleagues. We continue to make progress across all dimensions of service and sustainability. Our carbon emission decreased by 18% compared to the first nine months of 2019, and we continue to reach even more patients compared to the same period last year.
Within our aspiration of being a sustainable employer, we expanded the number of women in senior leadership positions to 38% compared to 36% by the end of September 2021. Within R&D, we are pleased with the encouraging phase II data with CagriSema in type 2 diabetes, as wells as the successful completion of the pivotal phase III program for once-weekly insulin icodec. Both support our aspiration of further raising the innovation bar for diabetes treatments.
Martin will com back to this and all our R&D milestone later in this call. In the first nine months of 2022, we delivered double-digit growth, reflecting solid commercial execution across geographies and our therapy areas. While both operating units contributed to sales growth, we saw particular strong sales growth in North America, driven by accelerated demand for our GLP-1 treatments. This has anabled us to increase the outlook for the year. Camilla and Doug will go through the details per therapy area later. Lastly, Karsten will go through the financial details, but I'm very pleased with our sales growth of 16% and operating of 14% in the first nine months of 2022. With that, I'll now give the word to Camilla for an update of commercial execution.
Thank you, Lars, and please turn to the next slide. As Lars mentioned, our 16% sales growth in the first nine months of 2022 was driven by both operating units, with North America operations growing by 22% and international operations growing 11%. Our GLP-1 sales increased 40% by North America growing 39% and international operations growing 55%.
Insulin sales decreased by 11%, driven by a 7% decline in international operations and a 20% sales decline in North America operations. The US insulin sales declined by 22%, driven by lower realized prices and a decline in volume. Insulin sales in international operations were impacted by the implementation of volume-based procurement in China from May 2022, as well as lower sales in EMEA. Obesity care sales grew 75% overall. In international operations, obesity care sales grew 73%, and in North America operations, obesity care sales grew 77%. In the US, obesity care sales grew 81%. GLP-1 sales grew 2%, driven by a 4% sales increase in international operations, offset by a 3% decline in North America operations. Please turn to slide 6. Our 14% sales growth within diabetes care is faster than the overall diabetes market.
That means we have improved our market share by 1.7 percentage points to 31.6%. We continue to be on track to reach one-third of the diabetes value market by 2025. This increase primarily reflects GLP-1 market growth as well as share gains in both operating units. Please turn to the next slide. In international operations, diabetes care sales increased by 9% in the first nine months of 2022, driven by GLP-1 sales that grew by 55%. Novo Nordisk remains the market leader in international operations with a GLP-1 value market share of 61.6%.
This is driven by share gains across geographies. Ozempic continues to expand its GLP-1 market share leadership in international operations with a 41.3% market share. While the GLP-1 class is growing more than 40%, GLP-1 penetration remains low at around 4% of total diabetes scripts globally. With that, I will hand over the floor to Doc.
Thank you for that update, Camilla. Please turn to the next slide. The US GLP-1 market volume grew by more than 40%, comparing the third quarter of 2022 to the third quarter of 2021, with once weekly injectable GLP-1s and Rybelsus as the main drivers. The recent competitor launch in the GLP-1 has supported the continued acceleration in market growth from an MBRX perspective, as well as all-time high levels for our portfolio of GLP-1 products during Q3. Measured on total prescriptions, Novo Nordisk has maintained its market leadership with a 52.4% market share. Additionally, Ozempic continues to be the market leader with a 38.7% TRX market share. Rybelsus continues to grow and has now been launched in 43 countries.
In the first nine months of 2022, it was the second largest contributor to growth in Novo Nordisk after Ozempic. Please go to the next slide. Obesity care sales increased by 75%, with 77% growth in North American operations and 73% in international operations. Furthermore, the global obesity market expansion continues with a volume growth of the global branded obesity market of more than 60%. We continue to be encouraged by the performance of Saxenda in international operations. Region EMEA is a key growth driver with 96% growth in the first nine months of 2022. Specifically, the growth continues to be particularly strong in countries that have some level of reimbursement, such as the U.K., Norway, and Israel. In the U.S., obesity care sales grew by 81%, with both Wegovy and Saxenda contributing to growth.
Following the previously announced Wegovy supply issues in the U.S., our focus remains to continue continuity of care to the patients that have already initiated treatment. In line with expectations, this has negatively impacted Wegovy prescription trends. Positively, Saxenda prescription trends have accelerated and continue to be at all-time high levels. Regarding Wegovy supply, we expect to make all doses of Wegovy available in the U.S. in December. We plan to initiate broad commercial activities in the beginning of 2023. Now back over to Camilla for an update on rare disease.
Thank you, Doc. Next slide, please. Our rare disease sales increased by 2% in the first nine months of 2022. This was driven by a 4% sales growth in international operations, offset by a 3% decline in North America operations. Rare blood disorders grew by 6% driven by Novo Seven as well as the launch products Esperoct and Refixia. Specifically, hemophilia A products grew by 6%, hemophilia B sales by 9% and Novo Seven by 6%. Rare endocrine disorder sales declined by 6%. The declining sales were driven by international operations decreasing 2% and by North America operations decreasing by 13%. The sales were negatively impacted by lower realized prices in the US. Now over to you, Martin, for an update on R&D.
Thank you, Camilla. Please turn to slide 11. In August, we shared the exciting data from the phase II trial in people with type 2 diabetes. I would like to briefly walk through these results. This was a 32-week trial that investigated the efficacy and safety of a fixed-dose combination of CagriSema compared to the individual components of semaglutide 2.4 milligram and cagrilintide 2.4 milligram. All products were administered once weekly. The trial included 92 people with type 2 diabetes and overweight, and people were equally randomized among the three treatment arms. In the trial, the mean baseline A1C was 8.4%, and the mean baseline body weight was 106 kg.
After 32 weeks of treatment, people treated with CagriSema achieved a numerically higher A1C reduction of 2.18 percentage points, compared to a reduction of 1.79 percentage points for people treated with semaglutide and 0.93 percentage points for people treated with cagrilintide alone. People treated with CagriSema achieved a numerically higher body weight reduction of 15.6% compared to a reduction of 5.1% for people treated with semaglutide and 8.1% for people treated with cagrilintide alone. In the trial, CagriSema appeared to have a safe and well-tolerated profile. Overall, these results indicate that CagriSema reduces blood sugar more than the two mono components alone, and the weight loss seen in the trial confirms the substantial weight lowering potential of CagriSema.
Based on the results, we plan to initiate a program for insulin-naïve people with type 2 diabetes during the course of 2023. Next slide, please. ONWARDS 5 was a 52-week efficacy and safety trial comparing once-weekly insulin icodec to once-daily basal insulin. This was either insulin degludec or insulin glargine. The trial included 1,085 insulin-naïve people with type 2 diabetes. The primary objective of the trial was to demonstrate non-inferiority of insulin icodec compared to once-daily basal insulin analogs in reducing A1C at 52 weeks. ONWARDS 5 included a dose guide app as well as real-world evidence such as substantially fewer trial visits compared to the other ONWARDS trials. Altogether, we believe that this design will increase our understanding and dialogue of how insulin icodec can make a difference for patients in an actual clinical practice setting.
This trial was a treat-to-target trial, and it achieved its primary endpoint by demonstrating non-inferiority in reducing hemoglobin A1C at week 52 with insulin icodec, as compared to once-daily basal insulin analogs. From an overall baseline A1C of 8.9%, once-weekly insulin icodec achieved a superior reduction in estimated A1C of 1.68% compared to 1.31% for once-daily insulin analogs. With an estimated treatment difference of 0.38 percentage points. In addition, we are observing rates of severe and clinically significant hypoglycemia. In the trial, once-weekly insulin icodec appeared to have a safe and well-tolerated profile. In conclusion, we're very pleased to share the positive results from the ONWARDS 5 trial. These results confirm the data seen in the previously reported ONWARDS program.
The results highlight that insulin icodec has the potential to be an ideal starter insulin for people with type 2 diabetes, as well as a very attractive option in combination with mealtime insulin, as shown in ONWARDS 4, thus covering the full spectrum of type 2 diabetes. We expect to be filing for regulatory approval of once-weekly insulin icodec in the U.S., in the EU, and in China during the first half of 2023. Please turn to the next slide. In September, we completed the 24-week main part of the phase III trial with concizumab, called explorer8, in people with hemophilia A or hemophilia B without inhibitors. The trial met its primary endpoint, confirming superiority of concizumab prophylaxis treatment compared to no prophylaxis treatment in reducing the annual bleed rate in both hemophilia A and hemophilia B patients without inhibitors.
The secondary confirmatory endpoint of demonstrating non-inferiority of concizumab prophylaxis as compared to previous prophylaxis factor treatment in reducing the APR was not met. In the trial, concizumab appeared to have a safe and well-tolerated profile, with no thrombotic events reported after the treatment restart following the treatment pause. Based on the results of explorer8, we are assessing further development activities and timing of regulatory submissions in people without inhibitors. Staying within rare disease, I'm very excited to share that treatment has been initiated in the first Mim8 phase 3a trial in hemophilia A. This is called FRONTIER 2. Based on the results we saw in phase I and II, we have very high expectations for the trial and the difference that Mim8 can make for patients with hemophilia A in managing their disease.
Furthermore, we have submitted nedosiran for regulatory approval in the US for the treatment of primary hyperoxaluria. Nedosiran was part of the Dicerna Pharmaceuticals acquisition we made back in 2021. Within other serious chronic diseases, we have completed a 12-week phase II trial with oral PCSK9 in 267 people with ASCVD or risk of ASCVD. The trial met its primary endpoint by demonstrating superiority versus placebo in lowering low-density lipoprotein cholesterol and appeared to have a safe and well-tolerated profile. However, due to commercial and portfolio considerations, the development of oral PCSK9 will be terminated. Now let's turn to the other high-level R&D milestones that I did not cover in the previous slide. Within diabetes, we have initiated a phase 1 trial with once-weekly oral semaglutide, as well as a phase II trial with higher doses of Ozempic in the third quarter of this year.
The latter is a 49-week trial investigating the efficacy and tolerability of 8 and 16 milligrams of Ozempic respectively. The trial is expected to enroll around 240 people with type 2 diabetes. Further, in the first half of 2023, we expect results from the currently ongoing phase III trial with oral semaglutide 25 and 15 milligrams respectively. Finally, within obesity, we are very excited to have initiated the first phase 3a trial called REDEFINE 1 for CagriSema. REDEFINE 1 is a 68-week trial comparing the efficacy and safety of once-weekly CagriSema with Semaglutide 2.4 milligrams, cagrilintide 2.4 milligrams, and placebo. The trial is expected to enroll approximately 3,400 people with obesity or overweight and comorbidities, and is the first pivotal trial in the REDEFINE program.
Further, during the first half of 2023, we expect results from the phase III-A trial with oral semaglutide 50 mg, as well as the phase I-II trial results from the ongoing trial with PYY. Altogether, we are looking very much forward to an exciting period with clinical trial initiations, as well as results across our therapy areas. With that, over to you, Karsten.
Thank you, Martin. Please turn to the next slide. In the first nine months of 2022, our sales grew by 26% in DKK and 16% at constant exchange rates, driven by both our operating units. The gross margin increased to 84.3% compared to 83.0% in 2021, driven by a positive product mix due to increased GLP-1 sales, a positive currency impact of 0.9 percentage points and productivity improvements. These effects are countered by lower realized prices in the U.S. and China. Sales and distribution costs increased by 28% in DKK and 19% at constant exchange rates. The increase is driven by launch activities and promotional spend for Rybelsus and Ozempic, as well as market development activities for obesity.
The cost increase is reflecting low activity levels in 2021 due to COVID-19, as well as higher distribution costs. Research and development costs increased by 31% in Danish kroner and 26% at constant exchange rates. The increase is driven by higher clinical activity levels within other serious chronic diseases and GLP-1, as well as the operating costs and amortizations related to the acquisition of Dicerna Pharmaceuticals in the fourth quarter of 2021. Administration costs increased by 9% in Danish kroner and 5% at constant exchange rates. Operating profit increased by 28% in Danish kroner and by 14% at constant exchange rates. Net financial items for 2022 showed a loss of around DKK 5 billion compared to a gain of around DKK 1 billion in 2021.
This mainly relates to losses following the appreciation of the U.S. dollar as reflected in the favorable currency impact in operating profits. The effective tax rate for the first nine months of 2022 was 20.5% compared to 19.8% in 2021. Net profit increased by 14% and diluted earnings per share increased by 15% to DKK 18.42. Free cash flow was DKK 62.5 billion compared to DKK 52.3 billion in 2021. The cash conversion in the first nine months of 2022 is positively impacted by timing of rebate payments in the U.S., including provisions related to the revised 340B distribution policy. Income under the 340B program has been partially recognized.
We continue 2022 with the solid growth momentum and now expect the sales growth to be between 14% and 17% at constant exchange rates. This is based on a number of assumptions as described in the company announcements. The raised guidance reflects expectations for sales growth in both international operations and North America operations and across therapy areas, but mainly driven by diabetes and obesity care. The updated guidance is based on the expectation that all the Wegovy dose strengths are available in the US towards the end of the year. The outlook reflects that we expect continued periodic supply constraints and related drug shortage notifications. This is driven by higher than expected volume growth for GLP-1 based products such as Ozempic and temporary capacity limitations at some manufacturing sites.
We are gradually increasing our supply capacity and expect this to be sufficient to support a potential continuation of the current sales growth trajectory. We now expect that operating profit will grow between 13% and 16% at constant exchange rates. This primarily reflects the sales growth outlook and continued investments in current and future growth drivers. We are also allocating additional resources to both early and late stage R&D pipeline activities. As mentioned before, our acquisition of Dicerna Pharmaceuticals is negatively impacting operating profit growth by around two percentage points due to higher operating costs and amortizations of intangible assets. Given the current exchange rates, most notably strengthening of the US dollar, we expect a positive currency impact for 2022.
Our reported sales are now expected to be 10 percentage points higher than at CER, and operating profit growth is now expected to be 15 percentage points higher than at CER. The positive currency impact on operating profit of 15 percentage points is partly offset by a net loss on financial items. For 2022, we now expect that financial items will amount to a net loss of around DKK 6.6 billion, mainly reflecting losses associated with foreign exchange hedging contracts.
Capital expenditure is still expected to be around DKK 12 billion, which mainly relate to investments in additional API production capacity at existing manufacturing sites. Our free cash flow is now expected to be between DKK 54 billion and DKK 59 billion, reflecting the acquisition of Forma Therapeutics. The acquisition closed in the fourth quarter of 2022. That covers the updated outlook for 2022. Now back to you, Lars, for final remarks.
Thank you, Karsten. Please turn to the final slide. We are very pleased with the double-digit sales growth in the first 9 months of 2022, and that we continue to reach even more patients. The strong financial performance in the first nine months of 2022 has enabled us to raise our outlook for the full year. From an R&D perspective, we have now successfully completed the full ONWARDS program with once-weekly insulin icodec. The full results underlying our commitment to further raising the innovation bar in diabetes.
We look forward to submitting insulin icodec for regulatory approval in the first half of 2023. In addition, we are excited about initiating the phase 3 program for CagriSema in obesity. This could further strengthen our portfolio of superior obesity products. With that, we're now ready for the Q&A, where I kindly ask all participants to limit her or himself to one or maximum two questions. Operator, we're now ready for the first question.
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. We will now take the first question. It comes from the line of Wimal Kapadia from Bernstein. Please go ahead. Your line is open.
Oh, great. Thank you very much for taking my questions, please. I mentioned skip Wegovy supply, if that's okay. Start with the oral weekly semaglutide. This sounds quite interesting. My question really is this just a reformulation of Rybelsus? Will it be for diabetes and obesity? Does it use a SNAC technology? What preclinical work have you seen to suggest the GI tolerability would be acceptable, and are you really trying to achieve injectable-like outcome? I know that's a few bits to that question, but maybe a summary of that asset would be quite helpful. Then my second question, just to Novo's comment on enough supply of Ozempic to maintain the current trajectory.
I guess my question really is how much of the current trajectory is actually being driven by lack of Wegovy supply, i.e. obesity? One of your peers yesterday, Eli Lilly, suggested, you know, one-third of their Mounjaro patients were not on diabetes medicines prior to taking the drug. Unless they're using a drug metformin, that number is one-third. I guess, what is that number for Ozempic? Thank you.
Thank you, Wimal. First, Martin, on the exciting prospects of all weekly sema.
Yes, absolutely. You're exactly right. We are very excited about this. This is an offering that is, as you rightly point out, Wimal, it's based on our SNAC technology. It's a little more than a reformulation, but we do expect it to allow for a full offering of once weekly dosing. Our intent is that this should be available potentially in both diabetes and obesity and with an efficacy and safety profile similar to that of injectables. I think I heard you mention GI tolerability. This should be on par with what we've already seen in our subcutaneous semaglutide profiles.
Yeah. Thank you, Martin. An exciting opportunity underlying our overall capabilities. Then, Karsten, we added some caveats on potential growth and link to supplies for next year. Can you put some comments on that?
Yeah. As we put into our company announcement, then we're stating that as we gradually are expanding our supply capacity, then we expect to have enough capacity to support a potential continuation of the current sales growth trajectory. This is nothing on Ozempic in isolation, but this is a macro statement for Novo Nordisk overall sales growth and supply capacity. Just to clarify that. As to source of business on Ozempic and the read across you allude to, when we're looking at source of business on Ozempic, our estimate is that, in the U.S. marketplace, to the tune of 40% of new Ozempic business comes from naive patients who have not received a diabetes medication before.
Thank you, Karsten, and thank you, Wimal. Next question, please.
Thank you. We will now take the next question. It comes from the line of Matthew Weston from Credit Suisse. Please go ahead. Your line is open.
Thank you very much. Can I ask two questions, please? The first coming back to Wimal and Ozempic capacity. Can I understand the cadence of capacity increases into 2023, please? Is there a specific bolus coming online or is it very much gradual? And to try and put into perspective your comments about the current trajectory, do you believe you will have capacity to deliver consensus sales expectations for 2023? Secondly, a question about U.S. healthcare reform.
We're getting close to the abolition of the Medicaid penny rule cap in January 2024. Should we assume that Novo will withdraw penny rule products from the U.S. during next year? Do you have to withdraw that product in its entirety? You can't just step away from Medicaid. If that is the case, can you redirect that volume to other markets, or can you use the fill finish infrastructure for GLP-1?
Thank you for those questions. On Ozempic, you shouldn't expect that's kind of a one-off event that triggers a step change. It's a gradual expansion of capacity. I'll not go in and comment on our ability to supply against the consensus. We'll give our guidance for 2023 at the full year. Then, Doug, on U.S. healthcare reform and Medicaid changes coming up, I guess we cannot be really detailed on what our plans are, but what can you share?
Yes, I think the question specifically was on the AMP cap repeal going into 2024, and certainly we're working on the potential mitigating actions, but I wouldn't want to get into the specifics.
Yeah. Thank you. Next, question, please.
Thank you. We will now take the next question. It comes from the line of Michael Nedelcovych from Cowen. Please go ahead. Your line is open.
Thank you for the question. As has been mentioned, many people are now taking other incretins for weight loss while Wegovy is supply constrained. It would seem that switching these people over to Wegovy once it's available could be complicated, and then the timing of generic Saxenda availability adds further complexity. Yet investors seem to be expecting the pace of sales of Wegovy once supply is available, to recapitulate its initial launch trajectory. I'm wondering how you think about these factors, and would you advise us to temper our expectations at all?
My second question is: yesterday, Eli Lilly appeared to imply that a weight loss drug with efficacy in obesity-associated conditions, such as sleep apnea and heart failure, might have a route to Medicare reimbursement without the passage of new legislation in the U.S. I don't believe this is Novo's view, but why is that not a reasonable assumption? Thank you.
I'll start with a bit of perspective on use of other incretins, and then maybe, Doc, you can talk a bit to what we expect when we come back to the U.S. and launch and perhaps what it takes to get an obesity product reimbursed in the public account. You mentioned that there's use of other incretins now that Wegovy is short on supply. I would actually say that the majority uptake is on our own Saxenda. We have seen Saxenda doing really well, step change in uptake, as we unfortunately had to slow down the launch curve. That really proves that the obesity market is opening up.
Before that, Wegovy really created the excitement about what weight loss potential is possible. We saw a much lower uptake of Saxenda. We are pleased with what we see, and we believe that we can both in markets where we don't have Wegovy, we can sustain the growth with Saxenda. Obviously, as we get Wegovy back towards the end of this year in the U.S. and gradually start launching outside the U.S., we see we expect to see, you know, a very nice uptake on that. Doc, what should people look for in terms of uptake of Wegovy when we come back? What's the broader reimbursement?
Yeah. Thank you. I think what's important to note is there remains a significant unmet medical need with obesity, and that was evident when we launched Wegovy in 2021. I think what we can expect is a strong and stable growth, and our focus is on building a long-term sustainable business. Maybe as a reference, we could take a look at the Q1 of 2022 this year, where it was assumed that fewer of the MBRXs were using a bridge or a co-pay program. Again, when you look at that quarter, we're looking at roughly 6,000 MBRX and 25,000 TRX. I think it's important to long-term sustainable business is what we're looking for.
Good. Thank you, Doc.