Thank you very much. Welcome to this Novo Nordisk Full Year 2020 and Outlook for 2021 Earnings Call. I'm Lars Rookgaard Jorgensen, the CEO of Novo Nordisk. With me, I have our Chief Financial Officer, Carsten Munk Knutsen and our Chief Chief Science Officer, Mads Krogsgaard Thompson. Also present and available for the Q and A session is Executive Vice President and Head of Commercial Strategy and Corporate as Camille Svez.
Today's earnings release and the slides for this call are available on our website, nornoise.com. Please note that this call is I'm webcasted live and a recording will be made available on Nonnoise websites. This call is scheduled to last for 1 hour. On exchange rates unless otherwise specified. The Q and A session will begin in about 25 minutes.
Please turn to slide As always, I need to advise you that this call will contain forward looking statements. Such forward looking statements are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, including the Uncertainties around COVID-nineteen, please see the company announcement for the full year of 2020 and the slides prepared for presentation. Please turn to the next slide. In the last year from COVID-nineteen.
During this period, our key priorities have been to safeguard our employees, continue the supply of life saving medicines and support societies around the world. We believe we have successfully delivered on these priorities, while also delivering on our strategic additions. Novo Nordisk has taken important steps towards reaching our strategic aspiration in 2025 on all four We launched our social responsibility strategy to feed diabetes and raise the ambition on renewable power to include direct suppliers. Later, Mads will elaborate on the successful year within innovation and therapeutic focus. For commercial execution, We have increased our market share in diabetes and have progressed on obesity and biopharm aspirations.
Lastly, on financials, both sales and operating profit grew by 7% at comparable exchange rates and we continue to provide attractive capital allocation by returning DKK 37,000,000,000 Danish kroner to shareholders. Please turn to slide 5. Before we move on to the particulars of this full year I would like to update you on changes to Executive Management. After more than 30 years with Novo Nordisk and 20 years as Chief Science Officer, Mads Krogar Thompson will retire from his current position by the end of February 2021 and take up a position as CEO at the Neurys Foundation. This leaves the role as CEO sorry, Mahesh leaves the role as CEO at a time where Neur noise pipeline is strong and the entry into new therapy areas is on track.
And in accordance with succession planning, as of 1st March, R and D will be reorganized into 2 separate areas, one of which Research and Early Development headed by Marco Schindler, who is promoted to Executive Vice President and Chief Science Officer. The other area is development headed by Martin Dange, who is also promoted to Executive Vice President. In a time where we're broadening our technology platforms And expanding our research into adjacent disease areas, Marcus will play a central role in bringing high levels of innovation across all therapy areas, thereby ensuring that our business continues to be sustainable in the decades to come. Furthermore, with more projects and a broader strategic therapy area of focus than ever before in history development is essential for ensuring that our portfolio of innovative drugs and devices progress and achieve competitive labels, allowing us to bring either treatments to patients. With that, I thank Mads for his outstanding contributions and wish him all the best in his future career.
Moreover, I would like to welcome Marcus and Martin in Executive Management and congratulate them both with their promotions. Please turn to 6. The 10% sales growth at comparable exchange rates was driven by 10% growth in Safra operations were all areas and therapies supported growth and North America operations growing by 3%. Sales growth was driven growth across all therapy areas, diabetes care grew by 8% despite insulin sales decreasing by 3%, reflecting lower prices in the U. S.
GLP-one sales increased by 29% driven by a 32% sales growth in International and the 28% sales growth in North America operations. Obesity sales Obesity Care sales grew by 3% driven by International Operations, partly offset by North America Operations. Sales growth was negatively impacted COVID-nineteen driven by fewer patients initiating treatment. Biopharm sales increased by 1% driven by International Operations. Please turn to slide 7.
We aim to reach 1 third of the global diabetes value market and we are now at 29.3%. This increase is a reflection of GLP-one market share gains. For insulin, we have increased volume market share by 0.7 percentage points in the last 12 months, which was driven by market share gains in EMEA and rest of world. Since 2019, we have increased our GLP-one market share by around 3 percentage to over 50%. This is driven by market share gains in EMEA, Rest of World and the U.
S. Further, it reflects the global uptake of Ozempic and launches of Rebecis in 9 countries. Please turn to slide 8. The U. S.
GLP-one volume market continues to grow around 30%, driven by once weekly GLP-one products. With the uptake of Ozempic and the launch of Rebersos Novo Nordisk has new to brand market share leadership of 57.1% and is the market leader with 50% market share measured in total prescriptions. Please turn to slide 9. Since the initial FOCUS The Rybelsus uptake has been on par with that of select SGLT2 launches. In its 1st full The year since broad launch, sales of Rabelsoz was DKK 1,900,000,000.
Despite a challenging launch in However, on several occasions, we have had to stop face to face interactions between our sales force and doctors, we are pleased with the Rebeldsor's performance. In the U. S, Rebeldsor's market share sorry, in the U. S, Rebeldsor's market access is now around 90%. Furthermore, the 80% of new prescriptions are new to GLP-one class with direct to consumer I'll start with continuing.
Outside of the U. S, Rybelsus has been launched in 8 countries and has obtained around 5% market share in the modern non insulin anti diabetic market in select launch countries. Additionally, In the Q1 of 2021, we plan to launch for belsus in Japan, where the OAD class represents around 8 percent of the total diabetes market. Please turn to Slide 10. Our increased diabetes value market share as indicated by the 37% share of growth.
This has driven a 1 Point increase in our market share, which is now at 23%. Please turn to Slide 11. Obesity Care sales increased by 3% to DKK 5,600,000,000 negatively impacted by COVID-nineteen initiated treatment. In International Operations, sales grew by 11%. In North America Operations, sales declined by 1% impacted by channel Of note, we have submitted marketing authorization application in both the U.
S. And EU for semaglutide 2 4 milligram for the treatment of obesity. Please turn to Slide 12. Biopharm grew Sales by 1% in full year 2020, driven by 5% sales growth in International Operations as well as the launch of new hemophilia products and growth disorders. For hemophilia, the 4% sales decline reflects declining NovoSeven sales, while the hemophilia A and B franchises grew driven by Desperox and Refixia.
Nordy Tropine sales increased by 8%. Sales growth was positively impacted by additional demand following supply challenges for competing products in select countries. With that, over to I ask for an update on R and D. Thank you, Lars. Please turn to Slide 13.
In the next few slides, I'll share with you our progress within both GLP-one and insulin innovation as well as within the rest of the pipeline. Starting with semaglutide, we were very pleased That was accompanied by a benign safety and tolerability profile, thereby establishing an attractive benefit risk ratio in type 2 diabetes. Across the sustained A significant increase in the percent of patients reaching the A1C target on semaglutide 2 milligrams versus 1 milligram, the potential of 2 milligrams weekly to further improve glycemic outcomes for patients in poor control. This is seen Despite the low rate of gastrointestinal adverse events observed in SUSTAINFORDE that were actually similar between both doses of semaglutide. We've now submitted regulatory applications for label expansion in both the EU and the U.
S. Furthermore, we've now begun the Phase 3 with oral semaglutide 2550 milligrams in type 2 diabetes. As you can see, the higher doses will be compared to the currently on ribosus dose of 14 milligrams. The trial is being designed to confirm superiority of the higher doses versus the 14 milligram dose. Similar to high dose subcutaneous semaglutide, the high doses of oral semaglutide aim at providing additional for those needing oral treatment intensification over time.
Please turn to the next slide.
2020
continued focus on delivering improved treatments, including potentially preventative treatments. In the Q4 of 2020, we initiated the Phase III program for insulin Icodec poised to become the 1st in class once weekly insulin. As you can see, the program will consist of trials collectively known as the ONWARDS program. The ONWARDS program comprises multiple trials of varying designs to demonstrate Icodec's efficacy and safety in different settings. We believe that Icodec's improved pharmacodynamic profile, along with enhanced convenience and adherence, can drive improved patient outcomes, thus providing a differentiated profile versus the currently most used once daily insulin.
In this regard, one of the Type 2 diabetes ONWARDS 5 sets out to prove the above in a pragmatic setting, while sampling a real world evidence trial, while also deploying app based guidance. Additionally, the 1st clinical trial for our 1st in class glucose sensitive insulin has been ongoing since the Q3. The target product profile This insulin includes improved glucose control as well as the elimination of hypoglycemia and other side effects of today's insulin therapies. In Q4, Phase 1 trial for the so called ideal pump insulin. This insulin seeks to deliver better glycemic control and improved convenience in general, including its using closed loop insulin pump systems.
This is principally achieved by avoidance of the lag time from insulin infusion to in action. Last but not least, we initiated a Phase 1 trial investigating DNA plasmid based on therapy as a potentially preventative treatment for people at high risk of encountering type 1 diabetes. This potential disease modifying treatment versus a subcutaneous thologenic DNA plasmid injection to prevent the onset of adverse diabetes in high risk subjects. Please go to the next The upcoming year will prove particularly exciting as we plan to initiate new Phase III programs and have them running in each of our therapeutic areas, including the new ones. Starting with the Q4 of last year, several R and D milestones were reached.
Starting with semaglutide in Type 2 diabetes, we had both the successful completion and regulatory submission of the Phase 3 SUSTAINED FORWARD data. Moving to obesity, We have now submitted the new drug application in the U. S. And the marketing authorization application in the EU for cemaglutide 2.4 milligrams as a once weekly treatment for people with obesity. In the U.
S, a priority review outflow was used, reducing the expected review time from 10 to 6 months. This gives for U. S. Approval mid-twenty 21. An EU decision is expected around the turn of the year.
In biopharm, we just received We've a positive opinion in the EU and approval in Japan for Sogroya, the once weekly treatment for adult growth hormone deficiency, also known as somapartitan. Sogroya is currently being investigated in the REAL four Phase 3 trial for children and lessons and these pivotal results are expected around year end. As we continue into 2021, there are a number of exciting clinical developments. In the first half of this here, we expect to read proof of concept that we receive proof of concept data for MIME8, a bispecific antibody for subcutaneous prophylaxis treatment in people with hemophilia A. In other serious chronic diseases, we also expect several Phase during this year, namely for semaglutide 2.4 milligrams weekly in NASH and oral semaglutide once mainly in Alzheimer's disease as well as ciltevecimab in atherosclerotic inflammatory cardiovascular disease.
On a personal note, I would like to round off my and my job for 30 years. It will luckily remain so in my new role as CEO of the Novo Nordisk Foundation from where I expect to follow the future innovation driven growth of Novo Nordisk very closely. I have treasured our many years of interactions, and I will miss them going forward. Good luck. Stay Be safe and now over to you, Karl.
Thank you, Mads. Please turn to Slide 16. In 2020, Sales increased by 4% in Danish kroner and by 7%
at 83.5%.
Sales and distribution costs increased by 3% in Danish kroner and by 6% at constant exchange rates. Firm operations.
R and
D costs increased by 9% in Danish kroner and 10% on exchange rates. The increase is driven by amortization of the priority review voucher for semaglutide in obesity and a higher activity level within all the outcome trials, SOL and Select. Administration costs decreased by 1% in Danish kroner and increased by 1% at constant exchange rates, reflecting broadly unchanged spend across administrative areas. Operating profit increased by 3% in Danish kroner and by 7% at the constant exchange rates, resulting in an operating margin of 42.6%. Net financial items exchange hedging contracts.
I'll come back to this in the following slides. Net profit increased by 8%, and diluted earnings per share increased 10% to DKK 18. Free cash flow was DKK 28,600,000,000 Development investments of DKK 16,300,000,000 from the acquisitions of Corvidia and Emmisher. Please turn Slide 17. In 2020, NOK Nordisk returned approximately DKK 37,000,000,000 in the of dividends and share buybacks to shareholders.
At the Annual General Meeting on 25th March 2021, the Board of Directors will propose a final dividend of DKK 5.85 for a total 2020 dividend of by kroner and 10 year, a 9% increase from 2019. In addition to the dividend, DKK 17 DKK15 billion was used for the repurchase of shares. Novo Nordisk has consistently returned its free cash flow to investors through both Share buybacks and dividends, with the dividends per share increasing for now 25 consecutive years. For 20 On Page 1, the Board of Directors has approved a new share repurchase program of up to CHF 17,000,000,000 to be executed during the in 12 months. The total program may be reduced in size in case of significant business development transactions during 1.
Please go to Slide 18. In 2021, we continue to focus on top line growth with Sales expected to grow between 5% 9% at constant exchange rates. The guidance reflects expectations for continued sales growth The guidance reflects continued sales growth within Diabetes Care, mainly driven by Ozempic and Reversus and growth within Obesity The guidance also reflects intensifying competition in diabetes and biopharm and continued pricing pressure, mainly within in the U. S. Operating profit is expected to grow between 4% 8%, reflecting the sales growth And continued investments in current growth drivers as well as pipeline assets to secure future growth.
As previously mentioned, following the strengthening of the Danish kroner versus our main currencies, reported sales and operating profit growth is expected to be 4% and lower than at constant exchange rates, respectively. The current COVID-nineteen pandemic causes uncertainty to the outlook regarding new patient initiations and societal impacts such as the unemployment rate in the U. S, which is impacting health encouraged. Financial items is now expected to be a gain of around DKK 0.7 billion. I'll get back to the impact from currency movements in the next slide.
Capsule expenditure is expected to be around DKK 8,000,000,000 in 2021, primarily relating to investments on the platform. Lastly, free cash flow is expected to be between DKK 36,000,000,000 and DKK 41,000,000,000. Please go The next slide. The negative currency impact in 2020 reflects the Danish kroner appreciation versus most foreign exchange rates. This had a negative impact on operating profit, but it was partially offset by gains on foreign exchange hedging.
We are expecting developments in 2021 given the current spot rate, and we are expecting a negative impact on operating profit of around DKK 3,000,000,000. We expect hedging gains of DKK 1,100,000,000 mainly related to the U. S. Dollar with a hedging period of 11 months and associated hedging costs. And now over to you, Lars, for final remarks.
Thank you, Arsten, please turn to slide 20. We are very pleased with the progress on our strategic aspirations in 2020 despite the challenges of COVID and team, the financial results reflect sales growth in both International Operations and North America Operations, driven by more patients using our GLP-one treatments. Within R and D, key milestones in the Q4 were the regulatory submission of semaglutide 2.4 milligram, which has potential to redefine the treatment of obesity. In 2021, we'll continue our focus on commercial all the serious chronic diseases. We are now ready for the Q and A.
We are kindly ask you to limit yourself to 2 questions. Operator, we now ready to take the first questions. Thank you.
Our first question comes from Peter Verdult from Citi. Please Go ahead.
Yes. Thank you. Pete Beadell here from Citi. Two big picture questions Mads, given it's his last quarterly conference call. Firstly, can you just remind Mads on the sort of broader technologies and timelines Novo Working to with respect to your stem cell therapy efforts in diabetes, asking the question in light of company is beginning to talk more about this area.
Just want to know or get a gauge how you're feeling whether Novo is in the vanguard of developments and how you handicap the You gave a very bland and boring answer about loving all their children equally. Now given that you're heading off to a well deserved Retirement from being CSO and perhaps can talk more openly, could you maybe just call out what you believe to be the most interesting An exciting early stage pipeline assets in the Novo portfolio. Thank you and all the best going forward.
Thank you, Peter. Mads, that was Two questions for you, stem cell and then your dialing.
Yes.
Apologies, there seems to be a technical issue.
I will start I'll start all over because I was muted. Sorry, No. Of course, I'm still CSO for the remainder of February month. So there are limitations to how much I can be specific on my pet projects. I would say though That our oral biologics leadership position now that we also have made the Hemisphere acquisition allows us to broaden out into very, very exciting molecules.
I'm very excited there without singling out one project. But you can imagine that if you could take the combination of amylin And semaglutide. And I can now tell you the amyloid is called kegrilintide. We are achieving WHO approval of the name kegrilintide. So if you can take for in the future.
But in terms of the stem cells, well, the ambition that management has approved for the transformation research doing stem cells is one new clinical IND that is an investigation new drug application every year starting this year. The first indication will be in Parkinson's disease and not in diabetes. Diabetes is going to come in the 2nd place. This also related raw injection of stem cell derived beta cells that will call for the use of an immunosuppressive cocktail. So this kind of approach is nice for them To show proof of principle, you might argue, but it's highly unlikely to deliver a product to the market, which is also why they themselves are stating that their next generation product is using encapsulation.
And I may remind you, Pete, that we did a development, a research agreement with Professor Pappas And the Procyon company for having the most elegant encapsulation device available for our beta cells, and they are the ones that are now taking into oncology trials aiming at the second indication being Type 1 diabetes for the company. And we hope that we maybe celebrate that at the the 100 year anniversary not of insulin in Toronto, but of the Novo Nordisk company.
Got it. Thank you.
Thank you, Hermes. And there was some goodies there, Pete. So next question, please.
Our next question comes from Wim Moll from Bernstein.
Great. Thank you very much for taking my questions. Umakar Pardis from Bernstein. Firstly, just congrats on the great success at Novo. You'll be missed and best Good luck in the new role at the Nobel Foundation.
So my first question is just on the onwards program for weekly insulin Icodec. Now I kind of always assumed that you would run a A little bit tight, a Phase 3 program that was quite cost effective, ensuring quick speed to market. So it looks like quite a Thus program is planned. So just your thoughts, if anything has changed on the potential role of a weekly insulin and the role you could play in the basal market? And So was there any data that's driven that change?
And then my second question is just one on the guidance and obesity. Clearly, This is the most impacted franchise within your portfolio from a COVID perspective given it's highly discretionary. So I'm just trying to get a sense of how Novo think about the next 6 months for Saxenda and then the launch of Sema in obesity. Should we be expecting a strong uptake in the second even in the COVID world given it's significantly superior to Saxenda. So just your thoughts on the launch there will also be helpful.
You.
Thank you, Wimal. Mads first on the ONWARD program.
Yes. So, Wimal, originally we were anticipating A very slim program realizing that this was in all likelihood an undifferentiated clinically speaking insulin but with a Attractive convenience and thereby adherence profile because it was once weekly instead of once daily. What we came to learn in the data that were published for exceeded our own expectations for the molecule. This means that the copying of a molecule that we believe is clinically differentiated compared to, for instance, insulin glargine, While at the same time being more convenient and the advent of new technology, if you look into the ONWARDS-five trial, we have done A real world evidence like study with very few clinical interventions, quite few site visits. It resembles very much a real world evidence And that means that you get an impression of how does this perform in a real life setting and integrating that with some new technology where we have and even the company collection of data for that matter has allowed us to do a slightly broader program than originally anticipated.
But we are recruiting and there's high High enthusiasm we can see from the investigators and part of that is, of course, is based on high impact publications with good data such as immuno of medicine. So we're excited. It's slightly broader program than we originally anticipated. We apologize for that, but it will also mean that we'll get a more attractive label we hope.
Thank you, I must Camilla some perspectives on obesity.
Yes. Thank you, Lars. So on obesity, there is no doubt that we will continue efforts on developing the market, as you recall from when we discussed last time, there are 650,000,000 people suffering from obesity, but 10% of those are actually seeking care. And when they seek care, it's only a fragment of those that are being treated with anti obesity medication. So from the 6 €50,000,000 down to less than €1,000,000 being treated with Saxenda.
So there's still a lot to do on market development in the coming 6 months. And hopefully, that will also pave the way for A much more efficacious product in semaglutide 2.4 with almost twice the efficacy of Saxenda. So the awareness, building the Building the physician support and then of course also the digitalization are some of the efforts that we are working Right now, that hopefully will also be useful in COVID-nineteen context, meaning that online care for obesity is something that we are also embarking on.
Thank you, Camilla. Thank you, Raquel. Thank you. Next question, please.
Our next question comes from Simon Baker from Redburn. Please go ahead. Okay. It It appears Simon is unable to answer at this moment. So we'll proceed to our next question from Martin from Danske Bank.
Please go ahead.
Hello, Martin Parker, Danske Bank. Two questions. First one maybe is Lars or Camilla. Just on the market growth because You have talked a lot about your growth this year hurt by less treatment starts on GLP-one and so forth. The reality is that if you look at the reported growth for all the diabetes companies in the world, then it's actually been a Strong growth rate.
I think that it's at the tune of 6% for the global diabetes market in 2020. And I remember back at your Capital Markets Day in 2019, you are looking for long term growth rate at the tune of 4%, adjusting for the JNUVIA patent So what are your thoughts on why we have seen this strong growth? Is this due to higher And how do you look into the overall market going into 2021? And then the second question, of course, have to be For Mads, I just had a question to the slide on Slide 13 and And apple with orange is because the 14 milligram are based on the old formulation and the 25 and 50 Based on a new formulation, so in reality, the efficacy of 50 milligram On the new formulation, it's probably corresponding to more than 60 milligram on the old formulation. Is that correlation correct?
And then What do you actually think this will match? This is something will match the currently approved Ozempic dose? Or do you think that it can be up All the way to the 2.0 milligram that we have the data on the same slide. Thanks.
Thank you, Martin, first Camilla some perspectives on what we believe of GLP-one growth?
It's actually for Not yield 1, it's for the whole diabetes market.
Okay, whole diabetes market. Thank you.
Thanks a lot. So on The whole diabetes market, it's important when we talk about less treatment starts, it's of course we need to separate between existing treatment And also a new treatment is very in the light of COVID-nineteen. So it's also important to understand that as we add new and better treatments to a segment like we've seen in GLP-one, there will be we have seen increased growth rates and as Whereas for existing products, we see a continuation of the existing trend. But the simple facts For new launches, it just is more difficult to get to the same awareness level when, for example, the This force is grounded. So I just think we have to separate between the two things.
But more and better treatment options, of course, will drive A better underlying growth as we've seen in the GLP-one.
Thank you. And Mads, perspective on high dose Orl, Seme?
Yes. Well, Martin, it's a very smart and crisp observation you've made because we hate to waste too much time in R and So we actually decided to embark on a very rapid onset Phase III trial for these high And it is also true that so called Type 9 Revelsus tablet, which is on the market, represents the 14 milligram, whereas we are into one of the newer generations with the other ones. These studies are rather long, as you can see, because we have a full fifty So a relatively big trial. So when we get data, which is happening during the course of the next month, on these New properties of these new tablet formulations, we are actually able to correct for that before we have, you can see,
the completion of such a trial.
It is actually possible via of such a trial, it is actually possible via bioequivalents and those kinds of simulations and data to actually Change one tablet with another. So you have the go to market tablet ultimately generating the pivotal data. And the other option is, of course, if are very bold. I think the 25 milligram in the new formulation does fantastic stuff. You might not need to go above that one.
We're just investigating a full dose response range, can argue. And by the way, Martin, the ambition is, as you stated very correctly, to go all the way to the 2 milligram to sustain forward efficacy level, that is actually the target for this to happen.
Good. Very exciting. Thank you,
Can I just follow-up because I don't think that you answered my first question? Maybe I didn't express myself. I was just looking at the overall diabetes market and not GLP-one. We have seen if you look at the overall diabetes spike reported by All Diabetes Conference, it looks like we have had actually a quite good diabetes of around 6% report, which is more than the 4% that you have put into your long term aspirations. So just thinking, Is this driven by a high compliance rate?
You can see the insulin growth in international rates has been much higher than historic growth rates. So have you seen a high compliance, meaning that people have been because diabetes Risk factor due to COVID if you are infected by COVID-nineteen, so people better maybe have to be more compliant. And does that mean that 2020 on a market perspective maybe actually serve as a top comparison?
So thank you, Martin. I know you do Some detailed research in this area, and I know that Carsten has written details. He would like to make a comment on it.
Yes. So Martin, first of all, now We talked about comparing apples and oranges. So the 4% we presented at our Capital Markets Day, that was an IMS or IQVIA Based value market growth. And what you have here is company reported, and one is CAGR and another one is for 1 year. So just say there are a couple of differences in data, as I'm sure you understand.
That said, then you're correct. There's a solid diabetes market growth, and we are growing faster than the market, as you see it, at 8% and despite COVID. So we have We've been surprised around how resilient our Diabetes Care business is. And of course, it's a function of we're talking about chronic therapy, So patients are on treatments. When we look at adherence data on therapy adherence data in terms of impacting the usage, we have not been able to prove statistically that it has And then the final comment is that, as Camilla said, so where we do The main impact is on Launch Brands.
And then you could say, as a physician and when you're initiating treatments And you're not too familiar with the new brand because you've not had too much education from sales reps on the product, then you will start patients on a different, more kind of classic product, be that On a different more kind of classic product be that Ozempic or Victoza.
And I guess in particular around 2020, it also plays in that there was some stock building in the beginning of the year and part of that is still sitting with patients. I'm not sure how big a share that is, but that probably also plays in. Thank you. I hope that's satisfied. Thank you very much.
Thank you. Our next question comes from Sachin Jain from Bank of America. Please go ahead.
Hi, Sachin Jain here from Bank of America. Thanks for taking my Firstly, just to echo prior comments, Mad thanks for all the insights over the years and best of luck with the next ventures. Actually financial questions first, if I may. So for Firstly, what are the key deltas within the guidance range, which is slightly wider than usual? And I guess investors this morning have gravitated to top end, given your usual conservatism at Yes, why don't you just outline some of the factors within that range?
And then related, the guide seems to imply U. S. Growth in a sort of mid single digit range versus commentary, obviously, almost a year and a half ago for this year to be around 2. So could you give some color on variables within that? And I guess, most importantly, what And risk of that benefit being realized.
And then just one for Mads, if I may. For that data set, where you see differentiation and how quick could a Phase 3 program be run there? Thank you.
Thank you, Sachin. First, Karsten, on Guidance for 2021, the range, U. S. Growth and potential Clarityon 340B?
Yes. So thank you for that question, Sachin. So first of all, on the ranges, you could say that Our top line range is 1 notch wider than a year ago. But given COVID, I don't think that is unusual or anything like that. And historically, we've also had 4 points.
So I think you should just consider that in the current environment as kind of a normal range given COVID uncertainty. As to your question on U. S. Growth, so with 5% to 9% in in our range and you take 7 as the midpoint. Then the starting point we take is that we have indicated in our strategic aspirations that we aim at IO growing between 6% 10%.
And for the last couple of years, we've been in the high end of that that would entail that U. S. Growth for next year will be higher than U. S. Growth was in 2020.
So we do see a step up in U. S. Growth in 2021 compared to 2020. The building blocks on the step up in that growth is, first of all, we have a couple of drags in our 2020 performance that will be in the basin 2021 being a donor toll and a step up in our affordability frankly, in the U. S.
As one key point. Then we do to see a continuation of our underlying performance in GLP-one business and in our insulin business. And then specifically to 340B, yes, we have included in our guidance a positive effect from 340B. We have changed our 340B shipping principles as of 1st January 2021. And as you know historically, then when we have been being More explicit around specific impacts to our business, be that U.
S. Business, we have commented specifically when we've had impacts, I say 3% upgrader. You remember the historic donor toll or mid last year U. S. Unemployment at 3%.
So since we're not calling out specifically 340B positive impact next year, you can assume that that's because it's than 3% positive impact on growth next year.
Thank you, Carsten. And Mads, some perspectives On MiMed?
Yes, absolutely. So thanks for the kind words, A couple of comments on the technology. What we did was to license the so called dual body technology from the Genmab company in Denmark, and then we've used it in our own discovery efforts to And we've optimized it on 3 horizons, one being potency. And why is potency interesting? It's interesting because with Oncizumab, for instance, you have to have rather high injection volumes calling for some injection site reactions and rather thick needles, etcetera, etcetera.
But with a high potency, we can deliver low volume and that will lend itself to a single use, thin ready to use device with a very simple administration. We then also optimized it for efficacy. And you might have read the paper In the Circulation Journal, where we actually, I believe, in that paper have shown that in severe bleeds in animals that are anesthetized, where you actually have A rather severe tail bleeding, emicizumab showed efficacy, but this one did. And it's probably Because MiMate has the ability to very potently stop tissue factor induced bleeding episodes, which is a very unusual parameter and If you could say why, there might be an upside. This might be difficult to call out in Phase III trials because the haven studies by the Roche company were done in a very smart way visibee how bleeding was registered and so on.
So that means that we are also planning to do some early real world evidence insight into Showing real world differences between imicizumab and our new MyMate molecule, but more about that a couple of years from now. The final thing we have tried to optimize for is safety. In We have designed a molecule that can only really bind when you are having an activated platelet surface. So if you have circulating Factor 9 and 10 in the free state, there will be no binding of the antibody and hence no risk of intravascular coagulation. So we actually At least based on animal and lab data, we have a very strong offering and we are targeting proof of concept this summer.
Looks good. And if that looks good, we will then initiate Phase 3 immediately.
Thank you. Can I just go back to the first question, Carsten? The question on the guidance range was more what are the key factors you've seen top and bottom, if you are able to
So the key factors is, I would say, is fairly the classic So IO growth is, of course, something that given potential health care reforms in different geographies, which can if nothing happens, can pull it up. And if we have significant health care reforms can pull down compared to our base case. Then we have our launch products, which for this year mainly will be the global rollout of Rybelsus, which can impact our clients. There's always an uncertainty on launch products. And then COVID-nineteen, you read kind of the same media, I'm sure, as we do in terms of the expectations around the vaccine and the second, third wave and all So there will be some uncertainty related to COVID-nineteen.
And I think that would be kind of the main uncertainties. And 340B is perhaps the last one I'll call out since it's I'd like to ask some uncertainties regarding the legal situation as to 340B and some legal leading to ongoing.
Very clear. Thank you.
Thank you, guys and thank you, Sachin. Next question.
Our next question comes from Trung Yoon from Credit
It's Truong from Credit Suisse. First question is simply on the timings of the data of that high dose oral sema If we have a look at clinicaltrials dot gov, it slates it for early 2023. But Could this come a bit earlier with some faster recruitment? Because presumably, this is pretty key to compete with things like the Pfizer's oral GLP-one and Which are on the horizon? Second question is on Rybelsys.
So can you perhaps talk about the coverage of Rybelsys that you have within Europe in terms of the price and access? And then on the U. S, is the level Of patient assistance support required coming down as you start 2021. And then finally, Mads, we wish you the best for the future. Jo, who's tied up with some other results, who's known you the longest on this team, would like I'd like to pass on her thanks, specifically for the endless discussions on oral insulin over the last 20 years, even if you are retiring before Novo finally Thank
you, John. Mads, first on timing of oral semesters without you too excited on the way out?
Yes. I promised my boss not to be too excited. By the way, say hello to Jo And remind her that my boss and my former boss also called Lars and I, we had perpetual discussions about what was most likely to happen Oral GLP-one or oral insulin, and one of them happened and one of us supported that one. So but do say hello to Joe from When it says early 2023 on clinicaltrials dot gov, we have to remind ourselves this is a rather big trial. We want to have these as pivotal data for a new a pipeline, it is of course heard a little bit by COVID.
And also bear in mind that it's a long treatment study. We have a full 68 week period plus some end of study follow-up. So I think you should for now follow the guidance seen in clinical ars.gov. And then there are pluses and minuses to that. But we realized we want to be out in the marketplace with a high efficacy oral biologic, Whatever the dose becomes, that is superior to what we could expect to see from competition and we'd rather do it sooner than later.
It's a high priority project.
Thank you, Ms. And Camilla, some perspectives on reversal's launch EU and U. S.
Yes. So in EU, the coverage is in general on par with injectables in TLTR-three 1. And that means that In most of the countries where we have launched now, we do have access at fully reimbursed levels, prices on par with the GLP-one roughly. In the U. S, we are now at a stage where the majority of the results of scripts are Reimburse reflecting the broad market access level we have, which is around 19% now.
So that's the short status. And then of course, we're excited to launch in Japan very soon where we have also obtained on access and full reimbursement.
Thank you, Camilla. Thank you, Mads. Thank you, John. Next question, please.
Our next question comes from Simon Baker from Redburn. Please go ahead. Simon Baker from Redburn, please unmute your microphone and Okay. We move on to our next question from Michael Novo from Nordea. Please go ahead.
Thanks a lot. It's Michael Loehr from Nordea. First of all, a question to the CapEx It's expansion. So it comes rather soon after you sort of complete the expansion in the large expansion in the U. So how sort of comfortable are you with the current expansion plans and what you sort of put into Your demand schedule for semaglutide going forward, how far does this take you in So your projections on the demand for oral sema across different indications?
And then secondly, on icodec and also Circling back to previous question regarding market growth. How do you see icodec going forward? Also bearing in mind the larger Phase 3 program, is this more a market share game globally? Is it also a market Volume growth game rest of world, is it even a potential market expansion game in the U. S?
And also on the value side, whether it can drive additional value to the U. S. And Sling market?
Thank you, Michael. First, Arsten, on CapEx, all semi and how far that will get us?
Yes. Thanks, Michael, For this question. So as we've said historically, then if we have to upgrade our CapEx from the I would say around DKK 6,000,000,000 per year as we discussed at the Capital Markets Day. If we had to orbit from there, then it would be based on a positive pipeline and that's in relative to what we're seeing here. So the current status on our CapEx projects is that we are in the final phases in term before we get move to a regulatory site submission to the FDA of our site in the U.
S. So all the main construction and construction companies are pretty much off the site. So it's a quality approvals that are currently outstanding before we can start producing from the first parts of the factory being purification. And then later on, we'll be able to go live with fermentation and recovery also. So that project is following the plan that we laid out.
What we are now contemplating and the reason why we are upping our CapEx forecast That with the pipeline projects that we have talked about, now we just talked about Hi, Doktor, Allsema. And you heard about our Alzheimer Phase 3 trial late last year that we intend to date, then the reason why we are upgrading our capacity is basically to meet the potential to demand on some of these pipeline projects and also potential pipeline projects on the same platform, which not publicly disclosed at this point in time.
Thank you, Carsten. And if I should give some perspectives on On IQOTEC, it's clear when you see the dynamics in the diabetes market today, the swing we've seen in is the one category going from weekly to sorry from daily to weekly. If you think about setting where you have a patient that's looking for intensified treatment, it's clear that if you can develop a product that gives a clear benefit in terms of weekly profile, but also higher timing range. This is opportunity. Add to that the lower need for glucose monitoring, I think we have potential to actually We make a significant step up in how insulin is used and still insulin is a multiplications way to treat for diabetes and there's significant unmet needs today if you ask people using insulin.
So I think we have a great opportunity. Obviously, we need to see the Phase 3 program, but I think we have an opportunity in both enlarging the market for use of insulin and obviously also taking share because this is a hopefully differentiated product both from and a clinical profile point of view. So it's a project that I'm really glad we have and I strongly believe there is a role for insulin in the future and that we can significantly increase innovation height and redefine that market. Add to that, our glucose the VINCIENT program. Thank you, Michael.
And we have time for one final set of questions.
Our next question comes from Richard Bosser from JPMorgan, please go ahead.
Just going back to the Rybelsys
Richard,
Can you hear me?
Yes. Now we can.
Okay. Excellent. Sorry about that.
So just going I'd like to the
Rybelsys launch and thinking about the launch in Japan and how we should think about that Relative to the uptake in the U. S, clearly, there's not much COVID in Japan, but also the OAD market in Japan, maybe give us some idea of the sizing of that relative to the GLP-one market in the And what opportunity you see there? And then second question, just thinking about if we can have Update on the PCSK9 and other options there to add on Within the Snack technology with semaglutide, maybe how many things can you co formulate And maybe an update on PCSK9. Thanks very much.
Thank you, Richard. Camilla, first, some perspectives on launch of ROUBLESIS Japan?
Yes. So we are quite excited about the launch of Rybelsus in Japan because the OAD The market, as you know, is 80% of the diabetes market in Japan. The GLP-one market in Japan is still In the size of less than 10%. So there is a big opportunity here, of course, to expand the treatment Of GLP-one with Belsus. And we are planning for, of course, launching Very soon from now.
And we are of course also building on many of the experiences we've had in other markets. But we have also co We teamed up with Merck, MSD, to make sure that they can help us co promote results in the primary care space where they have a lot of experience where we primarily up until now have had experience in the injectable segment.
Thank you,
A general perspective on the oral platform with SNAK and other enhancers we are deploying, because at this point in time, we have a great many options For peptides up to the size of approximately 10,000 dalton I. E. 10 ksD that seem to lend themselves to varying degrees to being by available vis a vis the newest generations of our SNAP technology. We are actually on to the 4th generation in that regard. And PCSK9 1 by 1 over time.
Thanks.
And I can confirm we will update you as we have progressed. So this concludes our earnings call. Thank you for participating Feel free to contact our Investor Relations officers should you have any follow-up questions. Thank you very much and have a good day.