Novo Nordisk CEO Talks Earnings, Product Competition
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So Novo has been facing increased competition from compounding pharmacies of your drugs in the U.S. The shortage is now over, so those compounded versions won't be selling after May 22nd. Your CFO told Bloomberg earlier today that you expect to see a step up in business as a result, but at the same time, you lowered your full year forecast this morning due to that increased competition. And I wonder how we should be thinking about squaring that circle.

Yeah, you're right. We are now in a situation where we can supply the demand in the U.S. and if they have taken us off the drug shortage list, that means that it's illegal to do compounding. So that has to stop. And that creates an opportunity for us to drive a bigger growth in the scripts for the legitimate high quality product from Nordisk.

And when we lower the guidance for the full year, it is really because of what the impact was of compounding in the first quarter and probably also a bit into the second quarter. And we have a relative steep comparator in the second half of the year. So you should see this guidance as one of us really stepping up in the second half of the year and getting to more and more patients.

And really moving forward in a business environment with a much lower compounded share of the business, really down to the rare cases where personalized is really needed, no bulk compounding taking place.

And so, I mean, at the same time, this is good news for Novo, but it's also good news for your competition, Eli Lilly, who also has been facing increased competition from compounders. So, I mean, in terms of the sort of duopoly that's developed between Eli Lilly and between Novo Dornisk when it comes to the GLP-1 market, how do you see that playing out now that the era of compounding seems to be ending? Yeah, I think it's a good point. It's really important for

no compounding because if you have an environment where you can compound patent protected branded products basically that's end of innovation. So of course this is a benefit for both our competition ourselves that this is now moving out of the of the equation and then it's back to really drive growth of the market together with Lilly we're only serving a fraction of the market you know a few million patients living with obesity.

So now it's back to the classical commercial tactics, explaining the value of the brands, explaining the benefit of being on treatment. Of course, we're encouraged by the fact that we have the only obesity medicine with a label that protects for cardiovascular disease. And we also expect in the second half of the year to have FDA approval for a label benefit of mass, this fatty liver disease, where we really have the best

data, best evidence of any product in the market. And this is a significant unmet medical need. So I'm very optimistic about how we can drive growth for the market going forward. Lars, our own Bloomberg intelligence analyst. Take a look at that. Eli Lilly has surpassed Novo Nordisk for the obesity market share by 53 percent. Now they're beating you. How do you compete when your products are relatively the same?

Well, I think they are different in a number of aspects. And I would just like to underline that when you look at the global supply of GLP-1 products, where we are really serving the market based on our semi-glutide molecule, globally we have two-thirds of the world market. So two-thirds of all patients are on treatments from Norinoysk. So we are the leader globally. And of course, short term, it's difficult to assess the real competitiveness when you have compounded products.

And we happen to believe that perhaps compounding has developed into, say, a third of the market. So that is a

as big as the business from us. So we of course hope to get our fair share of that back and that will you know I think create a stronger and more fair representation of the underlying competitiveness of the brands in the market. Along the same lines you and Lily are also very much focused on an oral pill to fight obesity as well. How how are you going to price this product and still keep it competitive.

Yeah, you're right. We have submitted to the FDA here back in February the first all obesity medicine of a G1. So we are ahead of competition here. We expect a regulatory decision around the turn of the year so we can launch in the beginning of next year in the U.S. And this is a product that basically basically it's a big Ovi in a pill.

So it comes with the efficacy of Vigobi and it comes with the proven safety that comes from having more than 30 million patient years of data. And I think that's a tremendous body of evidence for clinicians and for patients to really go to efficacious treatment that's also safe. And we've also submitted again here the cardiovascular protective data, which is something competition does not have.

So, efficacy, safety, proven track record and CV benefit, those would be key selling points for us.

Let's talk a little bit more about the competitive landscape because earlier this month you had CVS drop Lily Zetbound as a preferred drug on one of their lists. You also partnered with CVS to increase the use of Wegovi. And I'm interested here, Lars, have any other PBMs beyond CVS Care March approached you with requests to do some more of these exclusive access deals? Is this something that you're looking to replicate in the future?

Yeah, you touched on a great point here. We have a long-term, strong partnership with CVS.

I think it's important to note here that it's a classical demand from a payer like CVS and other PBMs to ask for exclusivity. But it's important to underline here that we did not bid for an exclusive position. And I think it's not something that's attractive for the manufacturers in the market.

So it might be that there's a demand for it, but I don't think PBMs will actually get a bit that's linked to exclusivity. And we did not get that here either.

So I think it's important to underline the partnership we have with CVS because I think that's a trusted relationship. And the fact that they actually chose Regobi based on the experience they have in the market of weight loss, the CV benefit, and also, as I mentioned, mesh is an important new indication for us to potentially get on label later this year. And that's a real health issue. And here you get, say, in one product,

the best mass data that's ever been shown and you get it in the price you're already paying for we go. I think that's a really, really good deal for a payer hitting more birds with one stone, so to say.

Appreciate that context there. It's hard to talk to any CEO without talking about politics in this moment. And that's exactly where I'm going to go right now. We've heard from the Trump administration that they're thinking about considering tariffs on pharma broadly. And I'm curious about how that could affect Novo Nordisk. I know that you have some U.S. manufacturing operations.

presence, of course, with the cattle mint deal. Are you thinking about shifting even more production to the U.S. or even potentially stockpiling certain drugs? What does your planning look like right now?

Yeah, that's a great topic. It's one of those that's a bit difficult to predict right now because there are quite a number of different messages coming out. If you look at our manufacturing footprint, that's one of having invested significantly in the U.S. Specifically, we invested $24 billion in the U.S. operations over the past 10 years.

We have more than 10,000 people working for us in the U.S. And we actually produce and export more from the U.S. than we import to the U.S.,

So when other companies were moving manufacturing out of the U.S. to perhaps save tax, that was actually a time where we started dropping down and investing in the U.S. So we have API manufacturing in the U.S., we have Phil Finney's products, and when you talk about an all-obesity treatment like Wegovy in a pill, that's actually 100% produced in the U.S. The API is made in the U.S., the tableting is done in the U.S., the packaging is done in the U.S. So it's really a U.S.-made product to Americans.

THE U.S. IS A VERY STRONG COMPANY. WE HAVE A GOOD SETUP. WE HAVE PRODUCTS MOVING FORTH AND BACK. THE UNDERLYING BASIS IS THAT WE EXPORT MORE FROM THE U.S. THAN WE IMPORT TO THE U.S. LISA:

Yes. So if you take, again, the Regovian pill, all of that is produced in the US. We do mainly biological manufacturing, so we don't import chemicals from China, India, or other places in the world. It's biologic manufacturing done in the US. But of course, we also have cases where we export API from the US to Europe, and we export from Europe to the US. So there are products crossing the border

But again, as I mentioned, we export more from the U.S. than we import to the U.S. And that also means that over time we could localize more and more in the U.S. And we are also expanding and investing more in the U.S. And we also have a big number we can mention if need be. But I think the proof point is that we did not leave the U.S. We actually stayed and we doubled down.

to today's situation where we export more from the U.S. than we import to the U.S. I think that's a great story and I think it's aligned with what the administration is looking for. Ending it out here when it comes to M&A and building out your obesity portfolio externally, are there gaps you need to fill and what kind of company, what kind of biotech company would be interesting?

Yeah, we are pursuing a leadership position when it comes to obesity, including diabetes and a few other disease areas. And we have a very, very strong internal pipeline. But as you say, there are also some gaps. We have, for instance, in-licensed two early deals since our last report in the small molecule space. So there are

EXAMPLES OF AREAS WE WOULD LIKE TO FILL AND WE DO THAT BY COMPLEMENTING AND IDEALLY DO THAT WITH EARLY ASSETS FROM BIO TECH COMPANIES WHERE WE CAN STILL USE OUR CAPABILITIES TO REALLY ADD VALUE TO IT AND THEREBY ENHANCE BOTH

both the quality to patients in terms of what they get in efficacy and safety, but also an attractive return to our shareholders. And Lars, before we let you go, we're expecting a pretty significant readout when it comes to oral semaglutide in the second half of the year about sort of the efficacy for Alzheimer's. And I'm curious what your confidence is around that. Obviously, Alzheimer's has been a nut that it seems like the pharma industry just can't crack.

Yeah, you're right. This is a devastating disease. I think we all know of family members who are suffering from that. I can talk to that myself, having family members diagnosed with Alzheimer's. So it's a devastating disease.

Some call it type 3 diabetes. Having lived with type 2 diabetes, you also risk of developing Alzheimer's. So, of course, the hypothesis of using semaglutide is an inch and a half wrong because it has this anti-inflammatory properties.

But as you say, it has been a very difficult drug development space. So we have intentionally guided very cautiously on this because we don't want to create false hopes.

So data will be coming end of this year. So let's just have a look at the data and decide on the level of excitement when we see that. But for sure, the real need and also space where I think the medicines already there are not, you know, maybe clear-cut standard of care opportunities and we could potentially be that.

Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote at Hiscox.com. That's H-I-S-C-O-X dot com.

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