Q3 2020 Novo Nordisk A/S Earnings Call

[music].

Hello, and welcome to the Q3, 2020, Novo Nordisk and earnings Conference call.

Operator: Hello and welcome to the Q3 2020 Novo Nordisk AS Earnings Conference Call. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session.

Route the call all participants will be in listen only mode and afterwards, there will be a question answer session.

Operator: Today, I'm pleased to present Lars Fruergaard-Jrgensen. Please go ahead with your meeting. Thank you very much.

Today I'm pleased to present last scorecard Johnson. Please go ahead with your meeting.

Thank you very much.

Lars Fruergaard Jorgensen: Welcome to this Novo Nordisk conference call regarding our performance for the first nine months of 2020 and our financial outlook for 2020. I'm Lars Jorgensen, the CEO of Novo Nordisk. With me I have our Chief Financial Officer, Karsten Munk-Knudsen, and our Chief Science Officer, Mads Krosgaard-Thomsen. Also present and available for the Q&A session are Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Sylvest, and our Investor Relations Office. Today's earnings release and the slides for this call are available on our website www.no-noise.com. Please note that this conference call is being webcast live and a recording will be made available on our NOISE website. The call is scheduled to last for one hour.

Traditional North conference call regarding our performance for the first nine month or 2020, and our financial outlook for 2020.

I'm not sure you got your question the CEO of firm orders with me I have our Chief Financial Officer Cosmos and.

And our Chief Science Officer, Ms. core core Thompson.

Also present and available for the communication are.

Six vice President and head of commercial strategy and corporate office committed service and our Investor Relations offices.

Today's earnings release, and the slides for this call are available on our website Northstar comp.

Please note that this conference call is being webcast live and a recording will be made available on Illinois website.

The call is scheduled to last one hour.

The presentation is structured as outlined on slide two.

Lars Fruergaard Jorgensen: The presentation is structured as outlined on slide 2. Please note all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified. The Q&A session will begin in about 20 minutes. Please turn to slide 3. 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 uncertainty around COVID-19, please see the company announcement for the first nine months of 2020 and the slides prepared for this presentation. Please turn to the next slide.

Please note all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified.

Securitization will begin in about 20 minutes, please turn to slide three.

As always I need to advise you that this call will contain forward looking statements such forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.

For further information on the risk factors, including the uncertainty around Koby 19, Pcs The company announcement for the first nine months of 20 to 20 and the slides prepared for this presentation.

Please turn to the next slide.

In 2019, Norsk introduce strategic aspirations, Twentytwenty, five which consist of four dimensions purpose and sustainability innovation and therapeutic focus commercial execution and financials.

Lars Fruergaard Jorgensen: In 2019, Novo Nordisk introduced Strategic Aspirations 2025, which consists of four dimensions: purpose and sustainability, innovation and therapeutic focus, commercial execution, and financial development. In 2020, Novo Nordisk has progressed on both adding value to society and on our environmental footprint. During the course of 2020, Novo Nordisk has launched a new social responsibility strategy to defeat diabetes. And as part of our access to insulin commitment, we have lowered the ceiling price of our human insulin in 76 low and middle-income countries. Specifically, in the third quarter of 2020, Monoi set a target to reduce all direct supplier supply, Sorry, Novo Nordisk set a target to ensure that all direct suppliers supply the company using 100% renewable power by 2025. In the third quarter, we made progress within our innovation and therapeutic focus aspiration, in particular, the Phase 2b trial investigating Wake Up in cardiovascular disease successfully completed. Mass will share more on R&D a little later.

In 2021, Nortech has progressed on both adding value to society and on our environmental footprint during.

During the course of Twentytwenty annual Nordisk has launched a new social responsibility strategy defeat diabetes and as part of all access to instant commitment we have lowered the ceiling price of our human insulin in seven to six low and middle income countries.

Specifically in the third quarter of Twentytwenty, one was set a target.

To reduce all direct supplier supply.

Sorry, no set a target to ensure that all direct suppliers supply the company using 100, 100% renewable power by 2030.

In the first quarter, we made progress with it in third quarter, we made progress within our innovation and therapeutic focused exploration in particular, the phase Twob trial investigating.

Picking up in cardiovascular disease successfully completed.

Yes, we'll share more on R&D a little later.

Moving to commercial execution diabetes care sales increased by 8% and.

Lars Fruergaard Jorgensen: Moving to commercial execution, diabetes care sales increased by 8%, and we increased our diabetes value market share leadership by 0.8 percentage points to 29.2%. GF1 sales continue to perform well at 29% sales growth, while obesity care and biopharm sales increased by 6% and 4%. Within financials, total sales increased by 7%, with international rations growing by 12% and North America rations growing by 7%. Operating profit increased by 7% to As we disclosed on the 8th of October, we now expect both sales and operating profit growth of 5-8% measured at constant exchange rates for the full year 2020. Please turn to slide five.

And we increased our diabetes value market share leadership by sheer put into share 0.8 percentage points to 29.2%.

Good one sales continued to perform well at 29% sales growth, while a piece to care and biopharm sales increased by 6% and 4% respectively.

Within financials total sales increased by 7% with.

It was intense operations growing by 12% and North America operations growing by 2%.

Operating profit increased by 7% to 22.9 billion Danish kroner.

SPD coast to coast on Eightth of October we now expect both sales and operating profit growth of 5% to 8% measured at constant constant exchange rates for the full year 2020.

Please turn to slide five.

No noise like the rest of the world continues to be impacted by COVID-19 pandemic.

Unlike many other organizations our commitment to employees patients and commune says remains unchanged.

Lars Fruergaard Jorgensen: Novo Nordisk, like the rest of the world, continues to be impacted by the COVID-19 pandemic, and like many other organizations, our commitment to employees, patients, and communities remains undiminished. Production Novo Nordisk manufacturing sites continue to operate, and products are being made available to patients throughout the world. Within research and development, trial recruitment is still below the pre-COVID-19 levels, with some new trials being initiated. Commercially, few new patients initiated treatment during the lockdown.

For production North manufacturing sites continue to operate.

And products are being made available to patients throughout the world.

Within research and development tried recruitment is still below the pre COVID-19 levels with some new trials being initiated.

Commercially few new patients initiated treatment during the Lockdowns.

This has specifically.

If this is this specifically impacted launch products and products with a short stay time.

A gradual recovery of patient initiations to place in the third quarter.

The COVID-19 pandemic continues to evolve differently across geographies and operations are running accordingly in many markets sales representatives are partially back in the field.

As alluded to the pandemic has increased the number of new patients using our products.

For the us geared to one class as seen on the right hand side of this slide neutral brand prescriptions were substantially impacted by lockdown vicious in Q2 of this year, but has since gradually recovered.

Lars Fruergaard Jorgensen: This has specific, There are specifically impacted launch products and products with a short stay time. The gradual recovery of patient initiations took place in the third quarter. The COVID-19 pandemic continues to evolve differently across geographies, and operations are running accordingly. In many markets, sales representatives are partially back in the field.

However, total get one prescription growth has been relatively stable throughout this period.

Please turn to slide six.

Well first nine months of the year total sales increased by 7%, which was driven by 12% sales growth in international operations, and 29% sales growth for our global tier one franchise.

In international operations, all geographies and all therapies continue to contribute to growth.

Sales growth was negatively impacted by Coca 19 has fewer patients initiated treatment, partially offset by code 19 related stocking and timing of shipments.

Lars Fruergaard Jorgensen: As alluded to, the pandemic has increased the number of new patients using our For the U.S. GIFT1 class, as seen on the right-hand side of this slide, new-to-brand prescriptions were substantially impacted by lockdown measures in Q2 of this year but have since gradually recovered. However, total JELP-1 prescription growth has been relatively stable throughout this period. Please turn to slide 16.

Sales in North America operations increased by 2% in both Danish krone and comparable exchange rates sales growth was negatively impacted by Coca 19, as fewer patients initiated treatment and increasing unemployment in the us partly offset by cost 19 related stocking in the first quarter.

Sales growth was primarily driven was primarily driven by GLP one, although we did see growth across our diabetes biopharm and obesity franchises.

Lars Fruergaard Jorgensen: For the first nine months of the year, total sales increased by 7%, which was driven by 12% sales growth in international operations and 29% sales growth for our global GFB1 franchise. In international operations, all geographies and all therapies continue to contribute to. However, self-growth was negatively impacted by COVID-19 as fewer patients initiated treatment, partially offset by COVID-19-related stocking and timing. Sales in North America operations increased by 2% in both Danish kroner and comparable exchange. Sales growth was negatively impacted by COVID-19 as fewer patients initiated treatment and increased unemployment in the U.S., partially offset by COVID-19-related stocking in the first quarter. Today's growth was primarily driven by GLP-1, although we did see growth across our diabetes, biopharm, and obesity franchises.

Global instrument sales decreased by 3%, which is a result of 22% sales reduction in the us partially offset by 10% sales growth in international operations.

The us sales decline was driven by lower realized prices following rebate enhancements unfavorable channel mix coverage changes in coverage skeptic inflation and the launch of affordability programs in International relations sales growth was driven by all instrument segments.

Jeff one sales increased by 29% driven by 37% sales growth in international operations, and 27% sales growth in North America operations.

We'll be to care sales grew by 6% with both operating units contributing to growth.

Sales growth was negatively impacted by fewer patients initiating treatment due to COVID-19.

Biopharm sales increased by 4% driven by Norditropin. Please.

Please turn to slide seven.

As part of our strategic aspirations 20 to 25, we aim to reach one third of the global diabetes market.

As previously mentioned, we have now reached 29.2%. This increase is a reflection of both the GLP, one and insulin market share gains.

Org for one since 2019, we have increased our value market share by three percentage points to nearly 50%.

Lars Fruergaard Jorgensen: Global influence sales decreased by 3%, which was a result of a 22% sales reduction in the U.S., partially offset by 10% sales growth in international operations. The US sales decline was driven by lower realized prices following rebate enhancements, unfavorable channel mix, tensions in coverage gap legislation, and the launch of affordability policies. In international relations, sales growth was driven by all instrument segments.

The global rollout of well Semtech in international operations, and the uptake of Assembly and what else was in North America helped.

Help have have been key to this.

For insulin since 2019, we have steadily increased our market share by 2.8 percentage points. This can be achieved attributed to the launch of new generation instruments in international operations facilitated by our markets pit approach. Please turn to slide eight.

The U.S tier one market continues to grow around 30% in volume.

When measured quarter over quarter, driven by once weekly GLP, one products with the uptake of assembly and the launch of rebel Snores 'cause new to brand market share leadership of over 60% in this GLP, one and and is that just one market leader measured in total prescriptions was around 50% market share.

Lars Fruergaard Jorgensen: GF1 sales increased by 29% driven by 37% sales growth in international relations and 27% sales growth in North America. Obesity care sales grew by 6%, with both operating units contributing to growth. Sales growth was negatively impacted by fewer patients initiating treatment due to COVID-19. However, byfarm sales increased by 4% during the year by Nordic Tropia, please turn to slide seven. As part of our Strategic Aspirations 2025, we aim to reach one third of the global diabetes mark. As previously mentioned, we have now reached 29.2%.

Despite facing difficult conditions due to COVID-19 proposals continues to take market share both for new to brand prescriptions, and total prescriptions, which are around 14% and 4% respectively.

Please turn to slide nine.

For both of US has had a promising start in the US you can see in the graph on the left that in the 20 weeks after launch new to brand prescription numbers, we're matching that of the SDLP STFC to class.

Once the code 19 related locked down were implemented in March we saw substantial decrease in new to brand prescriptions. However, as locked out were lifted propels us uptake has picked up.

This launch uptake development reflects the improved market access overbuilt for switches now around 85% across commercial and Medicare.

Furthermore, more than 80% of new prescriptions are new to the GLP one class.

Lars Fruergaard Jorgensen: This increase is a reflection of both the GLP-1 and insulin market share gains. All GLP-1 since 2019, we have increased our value market share by 3 percentage points to nearly 50%. The Global Rollout of the Olympics in International Relations and the Uptake of the Olympics and Rebellions in North America help have been key to this.

And direct to consumer advertisement has begun.

Outside of the US for businesses has now been launched in eight countries. Please turn to slide 10.

International Relations diabetes sales increased by double digits presenters across all geographical areas.

This growth has been driven by both instrument and typical one across all geographical areas.

The sales performance reflects our increased diabetes value market share in international operations as indicated by the 30% share of growth.

Lars Fruergaard Jorgensen: For insulin, since 2019, we have steadily increased our market share by 0.8%. This can be attributed to the launch of new generation insulins in international operations facilitated by our market split approach. Please turn to slide eight. The U.S. JLFOR1 market continues to grow around 30% in volume when measured quarter over quarter driven by once weekly GFP1 products. With the uptake of Ascempic and the launch of Rebelsus, Novo Nordisk has new-to-brand market share leadership of over 60% in this GFP1 and is the GFP1 market leader measured in total prescriptions with around 50% market share. Despite facing difficult launch conditions due to COVID-19, Rebelsus continues to take markets here, both for new-to-brand prescriptions and total, which are around 14% and 4% Western. Please turn to slide 9.

This has driven a sheer 0.5 percentage point increase in our market share, which is now at 22.7%.

Please turn to slide 11.

Beauty care sales increased by 6% to 4.2 billion Danish kroner.

Growth was driven by both international operations and North America operations sales growth was negatively impacted by koby 19, as fewer patients initiated treatments.

We have now launched successfully in 54 countries and just yesterday, the US National Institute for Health and care Excellence recommended the reimbursement of 600.

All of this supports our strategic aspiration of more than doubling will be to sales by 20 to 25.

Please turn to slide 12.

Biopharm sales grew by 4% in the first nine months of Twentytwenty, driven by 8% sales growth in international operations sales.

Sales growth was driven by Norditropin.

Well hemophilia the declining sales of 2% wherever soul of more seven sales decline offset by Esperanza and reflects year launches.

Lars Fruergaard Jorgensen: Propulsus has had a promising start in the U.S. You can see in the graph on the left that in the 20 weeks after launch, neutral brand prescription numbers were matching that of the SGLT-2 class. However, once the COVID-19-related lockdowns were implemented in March, we saw a substantial decrease in neutral brand prescriptions. However, as the lockdowns were lifted, rebels' uptake has, This launch uptake development reflects the improved market access of Rebelsus, which is now around 85% across commercial and medical. Furthermore, more than 80% of new prescriptions are new to the GFP1 class, and Direct-to-Consumer Advertisement has begun. Outside of the US, Rebelsus has now been launched in eight countries. Please turn to slide 10.

North North American sales increased by 13%, reflecting commercial execution as well as changes in inventories COVID-19 related stocking and additional demand driven by supply chances for competing products in selected countries.

With this ultra mess for an update on R&D.

Thank you lost please turn to slide 13.

In the next couple of slides I will first share the results from the recently completed phase to be rescued trial pursue to make you map and the after maybe some recent and imminent R&D milestones.

Two two Becky map to be referred to as city is the first fully human anti IL six like and monoclonal antibody that we obtained as part of the Covidien Therapeutics acquisition back in June of this year.

At the time of the acquisition the phase Twob Wesco trial. It was well underway now is completed and we're happy to share the results.

To start with a bit of context, our head of global drug discovery Dr. Marco Schindler described novo Nordisk ambition to enter the cardiovascular disease space at our R&D Investor event held in June.

Within this therapeutic area silty seeks to address the residual inflammation related risk that exist. Despite today's state of the art management of atherosclerotic cardiovascular disease also known as A's CBD.

Lars Fruergaard Jorgensen: In his last operations, diabetes has increased by double and presented this across all geographical areas. This growth has been driven by both insulin and GLP-1 across all geographical areas. The sales performance reflects our increased diabetes value market share in international operations, as indicated by the 30% share of This has driven a 0.5 percentage point increase in our market share, which is now at 22.7%. Please turn to slide 11. Obesity care sales increased by 6% to 4.2 billion Danish kroner. Growth was driven by both international operations and North American operations.

In a CBD reduced inflammation within the heart and blood vessels typically assessed clinically by measuring CRP.

Has been shown to correlate with a robust reduction in major adverse cardiovascular events in a follow up analysis to potential trial with anti IL, one antibody kind of keep them at.

Thus in the cancer trial patients in whom kinda kitimat treatment resulted in an end of treatment reduction in GRP and interleukin six levels below 1.65 nanograms per liter had.

I had a major risk reduction of no less than 36% pace.

Lars Fruergaard Jorgensen: Sales growth was negatively impacted by COVID-19 as fewer patients initiated treatment. However, we have now launched SACSENTA in 54 countries, and just yesterday, the US National Institute for Health and Care Excellence recommended the reimbursement of SACSENTA. All of this supports our strategic aspiration of more than doubling obesity sales by 2025. Please turn to slide 12.

Patients, who did not reduce the iosix levels below this level at the end of treatment correspondingly had no reduction in mace events.

Encouraged by this as well as the documented robust human genetic association between high of six expression and SCB de risk, we may should CRP and other surrogate markers of anti inflammatory cardiovascular action in the rescue trial.

We filed immediate dose dependent and sustained CRP reduction at all levels of facility.

Lars Fruergaard Jorgensen: Firefarm sales grew by 4% in the first nine months of 2020, driven by 8% sales growth in international operations; sales growth was driven by the Nordic focus. For hemophilia, the declining sales of 2% were a result of No. 7 sales. Klein, Offset by Espiroc, and Refixia Launch, Nordic Tropian sales increased by 13%, reflecting commercial execution, as well as changes in inventories, COVID-19-related stocking, and additional demand driven by supply challenges for competing products in selected countries. With this, over to Matt for an update on R&D. Thank you, Lars. Please turn to slide 13.

In fact by 93% at the highest dose.

Additionally, we saw reductions in a number of other cardiovascular inflammation biomarkers, such as fibrinogen serum amyloid eight and have to globally as well as a decrease in the heart failure biomarker in terminal Pro BNP.

They are very encouraging data set we now have for this molecule in a CBD should be seen in the light of silty <unk> ability to reduce inflammation in atherosclerotic patients at a very low dose level that is expectedly clinically safe.

Thus and unlike any other proved interleukin six blockers.

We did not not observe any clinically meaningfully a meaningful impact on neutrophils platelets liver enzymes or cholesterol in the rescue trial.

Mads Krosgaard-Thomsen: In the next couple of slides, I will first share the results from the recently completed Phase 2b rescue trial for Silti Vecchiemapp and thereafter review some recent and imminent R&D milestones. Siltivecimab, to be referred to as Silti, is the first fully human anti-IL-6-like and monoclonal antibody that we obtained as part of the Covidia Therapeutics acquisition back in June of this year. At the time of the acquisition, the Phase 2B rescue trial was well underway. Now it's completed, and we're happy to share the results. To start with a bit of context, our Head of Global Drug Discovery, Dr. Marcus Schindler, described Novo Nordisk's ambition to enter the cardiovascular disease space at our R&D investor event held in June. Within this therapeutic area, CILTI seeks to address the residual inflammation-related risk that exists despite today's state-of-the-art management of atherosclerotic cardiovascular disease, also known as ASCVD.

Currently a Japanese phase two trial is ongoing and a major pivotal phase three cardiovascular outcome trial is being planned for initiation in the second half of next year. Following in the phase two meetings with brick load regulators.

Please turn to the next slide.

In the third quarter of 2020, several R&D milestones were reached including the notion that we now have for the first time ever more than 40000 patients active in clinical trials.

Starting with our some appetite franchise, we have initiated a phase three trial investigating one milligram with cemig in around 800 people with type two diabetes with peripheral artery disease also called P 80.

The background for the trial is the finding of a significant 35% risk reduction in both peripheral and coronary revascularization events in sustain six.

P 80 indication represents yet. Another example of how we see continuous semaglutide label expansions based on demonstration of efficacy and safety in areas of high unmet medical need.

Intriguingly. The first clinical trial is now being initiated our first in class glucose sensitive eventually.

The trial investigates the safety Tolerability pharmacokinetics and dynamics, our subcutaneously administered once daily Tucows intensive insulin.

Mads Krosgaard-Thomsen: In AAS-CVD, reduced inflammation within the heart and blood vessels, typically assessed clinically by measuring SIOP, has been shown to correlate with a robust reduction in major adverse cardiovascular events in a follow-up analysis to the ongoing trial with anti-IL-1 antibody canakinomab. Thus, in the cancer trial, patients in whom canakinumab treatment resulted in an end-of-treatment reduction in CRP and interleukin 6 levels below 1.65 ng per liter had a mace risk reduction of no less than 36%. Patients who did not reduce their IL-6 levels below this level at the end of treatment correspondingly had no reduction.

The target product profile for this molecule in crew includes in pre improved glucose control as well as the virtual elimination of hypoglycemic and other side effects seen with today's engine therapies.

Another phase one trial that has just started investigates higher doses of oral semaglutide with type two diabetes.

Aiming for all Semaglutide to ultimately match the full efficacy level associated with even high dose administration of injectable summit.

Mm.

Within Biopharma, we've received approval of Somapacitan now also newness so growth there.

In the U.S. for adults with adult growth hormone deficiency.

Also noteworthy within Biopharma is the re initiation of phase three clinical development activities for consists of map, which is the subcutaneous prophylactic CSPI antibody treatment in hemophilia b patients regardless of the cheapest status. This.

This follows pausing of the explorer trials in March of this year relates to the occurrence of nonfatal thrombotic events.

Mads Krosgaard-Thomsen: Encouraged by this, as well as the documented robust human genetic association between high IL-6 expression and ASCVD risk, we measured CRP and other surrogate markers of anti-inflammatory cardiovascular action in the rest. We found immediate dose-dependent and sustained CRP reduction at all levels, in fact, by 93% at the highest. Additionally, we saw reductions in the number of other cardiovascular inflammation biomarkers such as fibrinogen, serum amyloid A, and haptoglobin, as well as a decrease in the heart failure biomarker N-terminal probiotic. The very encouraging data set we now have for the silty molecule in AAC should be seen in the light of CILTI's ability to reduce inflammation in atherosclerotic patients at Thus, and unlike any other proven interleukin 6 blockers, we did not observe any clinically meaningful impact on neutrophils, platelets, liver enzymes, or cholesterol in the rescue trial.

Revised dosing regimen is now being deployed in the explore trials.

Regarding the fact eight mimicking antibody project my mate, we have despite a COVID-19 bladed period of delay in phase one caught up with the timelines and are now in phase two in hemophilia patients with or without inhibitors hemophilia a patients.

Within other serious chronic diseases, the Nash trial investigating semaglutide induce combination with gilliatt HCC inhibitor and exotic and this has completed risk.

Results will be communicated at scientific conferences during this quarter.

Importantly, within Nash Cementless Hyde has recently been granted breakthrough therapy designation by the FDA.

Breakthrough designation implies amongst other things that the FDA will work closely will know in order to develop and hopefully approved some appetite expeditiously for the treatment of Nash.

Looking towards the rest of this year and into Twentytwenty. One we will soon initiate the phase three onwards program for once weekly insulin I could.

Furthermore, there will be a number of exciting read outs, including sustained for <unk>, which is the investigation of Semaglutide two point not milligrams in type two diabetes.

You know PCT, we'll be submitting scimeca tie 2.4 kilograms in both the us and you.

We accordingly expect a decision on the U.S. submission by mid 21, since we decided to use our priority review about Jeff for this application.

Also within obesity in Twentytwenty, one we will seek to have phase three initiation for our once weekly combination product consisting of Amlin Athree and Semaglutide.

Mads Krosgaard-Thomsen: Currently, a Japanese Phase 2 trial is ongoing, and a major pivotal Phase 3 cardiovascular outcome trial is being planned for initiation in the second half of next year, following inter-Phase 2 meetings with regular participants. Turn to the next slide. In the third quarter of 2020, several R&D milestones were reached, including the notion that we now have, for the first time ever, more than 40,000 patients active in clinical trials. Starting with our Semaglutide franchise, we have initiated a Phase 3B trial investigating 1mg Mozambique in around 800 people with type 2 diabetes and peripheral artery disease. The background for the trial is the finding of a significant 35% risk reduction in both peripheral and coronary revascularization events. The PAD indication represents yet another example of how we see continuous semaglutide label expansions based on demonstration of efficacy and speed, in areas of high unmet medical need. Intriguingly, the first clinical trial has now been initiated for a first-in-class glucose-sensitive, The trial investigates the safety, tolerability, pharmacokinetics, and dynamics of subcutaneously administered once daily. The target product profile for this molecule includes improved glucose control as well as the virtual elimination of hyperglycemic and other cytokines.

Along with reporting of the phase one results for long acting GDF 15 project.

Lastly, within other serious chronic diseases will during 2021 initiate phase three trials for both Semaglutide in Nash as well as the cardiovascular outcome trial facility with that over to Carsten for an update on the financials.

Okay.

First nine months of 20 to 20 sales increased by 6% in Danish kroner and by 7% at constant exchange rates.

The gross margin was 83.8% compared to 83.6% in the first nine months of 2019.

The increased gross margin reflects the positive product mix driven by increased year, one sales and productivity improvements.

This is partly countered by a negative impact from lower realized prices in the us.

Sales and distribution costs increased by 4% in Danish kroner and by 5% at constant exchange rates.

The increase in cost was driven by North America operations, reflecting launch activities for results us and continued promotional activities for simply.

This was partly offset by lower promotional spend related to insulin.

And then celebrations promotional spend is related to loss activities folks in pick and developers and the continued rollout of six anda.

The spent was impacted by code with 19, resulting in low activity.

And delays in promotional activities.

Research and development cost increased by 12% both in Danish krone and at constant exchange rates the.

The cost increase is driven by amortization of the priority review Archer for Semaglutide in obesity in the third quarter of 2020.

Increased activities within other serious chronic diseases are driving the cost increase following progression of the early pipeline within cardiovascular disease and stem cell projects.

This is partly offset by lower spent with the newbies to care driven by Finalization of the Semaglutide obesity pivotal phase three program and Koby 19 impact on clinical trial activity.

Administration costs remained unchanged in Danish krone, and increased by 1% at constant exchange rates we've.

Reflecting broadly unchanged spent across administrative areas.

Operating profit increased by 6% in Danish kroner and by 7% at constant exchange rates.

Net profit net financial items showed a loss of around 1.8 billion Danish kroner compared to a loss of around 3.1 billion in 2019.

Diluted earnings per share increased by 10% to 14 kroner.

Free cash flow was 41.6 billion Danish kroner compared to 32.7 billion Danish kroner in 2019.

The increase was driven by higher net profit and favorable timing of rebate payments in the us.

Please turn to slide 16.

As long as mentioned our growth outlook for 20 to 20 was updated on Eightth of October sales growth is expected to be between five and 8% at constant exchange rates. The guidance reflects expectations for continued robust sales performance for the tier one franchise with.

Mads Krosgaard-Thomsen: Another phase 1 trial that has just started investigating higher doses of oral temaglutide for type 2 diabetes. Aiming for all sematrotypes to ultimately match the full efficacy level associated with even high dose administration of injections, within BioPharm, we've received approval for, now also known as Sogroja in the US for adults with type 2 diabetes. Also noteworthy within BioPharm is the re-initiation of phase three clinical development. GFBI antibody treatment in hemophilia A and B patients regardless

We'll send pick victoza and reverses the portfolio of new generation insulin antibody products.

The guidance also reflects intensified competition within diabetes care biopharm, especially within the hemophilia inhibitor segments.

Furthermore, continued pricing pressure within diabetes care as well as expansion of affordability initiatives, especially in the U.S I expected to impact sales development.

Given the current exchange rates for sustained growth things kroner reported growth is now expected to be around three and four percentage points lower than at constant exchange rates respective to sales and operating profits.

The conquer with 19 pandemic causes uncertainty to the outlook regarding new pacing denunciations and societal impact such as the unemployment rate in the us.

Mads Krosgaard-Thomsen: This follows pausing of the Explorer trials in March of this year related to the occurrence of non-fatal thrombosis. A revised dosing regimen is now being deployed in the, Regarding the Factor VIII Mimicking Antibody Project I made, we have, despite a COVID-19-related period of delay in Phase 1, caught up with the timelines and are now in Phase 2 in hemophilia patients with or without Within other serious chronic diseases, the NASH trial investigating sematocyte in loose combination with Gilead's ACC inhibitor and FXR, Results will be communicated at scientific conferences during Importantly within NASH, semaglutide has recently been granted breakthrough therapy, Breakthrough designation implies, amongst other things.., that the FDA will work closely with Novo Nordisk to develop, and hopefully approve, somatotide experiments, looking towards the rest of this year and in, We will soon initiate the Phase 3 Onwards program for once weekly in-student ICANN.

Which is impacting health care insurance coverage the estimated annualized impact is now around 2% of fewer sales.

Operating profit growth is expected to be between 5% to 8%.

The updated outlook reflects savings due to cost 19.

The expectation for operating profit growth, primarily reflects the sales growth outlook and continued investments in current and future growth drivers.

Finances items is now expected to be a loss of around 1.4 billion things kroner compared to a loss of 1.2 billion Danish kroner in August 2020.

This development, mainly reflects losses from non hedged currencies due to depreciations across several emerging market currencies.

Lastly, we now expect free cash flow to be between 34, and 39 billion Danish krone, reflecting higher net profits.

And now we'll go to last for his final remarks.

Thank you Carsten, please turn to slide 17.

We are very satisfied with the performance in the first nine months of Twentytwenty. Despite the negative impacts from COVID-19.

More patient choose our jirka, one treatments and our diabetes market share market leadership continues to expand within R&D. An important milestone was reached with the current thing encouraging results from the phase two trial in cardiovascular disease was suitable for them or the lead candidate from the coverage of the pews Ics acquisition earlier this year.

With that thank you I mean, now ready for the culinary where kindly ask all participants to limit limited him or herself to two questions. Operator were now ready to take the first set of questions.

The first question comes from the line of we lost audio sometime saying. Please go ahead.

Okay. Thank you very much for taking my question. So just a fee for Matt. Please and then just kind of ask about the Dallas or how you think about a balance to age they want to see control and tolerability for the GLP. One so let's say you know what in your mind.

Mads Krosgaard-Thomsen: Furthermore, there will be a number of exciting readouts, including Sustain Forte, which is the investigation of semaglutide 2.0 milligrams in type, in Obesity. We will accordingly expect a decision on the U.S. submission by mid-2019 since we decided to use our Priority Review Voucher for this application. Also, within obesity, in 2021, we will seek to initiate phase 3 trials for our once weekly combination product consisting of amylin 833 and semaglutide, along with reporting of the phase 1 results for our long-acting, Lastly, within other serious chronic conditions, we will, during 2021, initiate phase 3 trials for both sematrotide in NASH, as well as the cardiovascular outcome trial. With that, over to Karsten for an The increased cross-market reflects a positive product mix driven by increased year-to-month sales and productivity. This is partly countered by a negative impact from lower realized prices. Sales and distribution costs increased by 4% in Danish kroner and by 5% at constant exchange rates.

Hey, one C level do you see incremental increases less relevant given the impact on vascular complications start to slow down and you have them in Georgia patients Oh undergrad, good traction control and then secondly on what level of nausea, and vomiting levels do you believe the tolerability concerns outweigh incremental HB once you control.

So what I'm really trying to get in a sense the balance between these two prescribing drivers there both on the patient and the physician side was taking into account the compliance standards and then my second question enough and you've now starting to get close on pivotal trial, which complements the weekly and insulin 965, which targets Michael unlikely microvascular complications.

How should we think about these three novel Insulins in the context of what we are seeing in the basal market. Today you know what gives you confidence that these products will actually raise the bar enough to make a difference in what is a very challenging market and so how should we think about the return on investment of these products and then just a very quick one just tied to that well what is insulin 147 I've never level.

Thank you.

Well, where maybe the last one first a it was a hybrid molecule that had fuel activities, but the you shouldn't you shouldn't continue yourself about the that one anymore for the time being but more focus on the GE OSI insulin and the cardio protective insulin and not the least of course the <unk>.

We'll take insulin entering phase three but it's a long standing debate that the kind of correlation between agency control and cardiovascular risk and what level is okay, and I think it suffices to say that the most ambitious agency guidelines, namely the American Academy of a yeah clinical endocrinology.

Karsten Munk-Knudsen: The increase in costs was driven by North America operations reflecting larger costs for Rebeltus and Continued Promotional Activity. This was partly offset by lower promotional spend related to, In international operations, promotional spend is related to launch activities for SimPIC and Rebelsys and the continued rollout of SimPIC. This event was impacted by COVID-19, resulting in low activity and delays in promotion. Research and development costs increased by 12% both in Danish kroner and at constant exchange.

Ace or they have a 6.5% he wants he target and they have derive that from the notion that when you go much beyond or below sorry, 6.5, and he wants to see there is very little contribution to apply seem yeah or hypoglycemia to the expected advent to offer major adverse cardiovascular events or or or macro and geography.

Likewise for microvascular complications. So so I would argue that in a patient who's anywhere in the range of 6.5% you would have to weigh up against the Tolerability profile any glucose decrement below that level that being said of course, if you can achieve normal glycine yeah. So.

Karsten Munk-Knudsen: The cost increase is driven by amortization of the priority review voucher for somatotides in obesity in the third quarter. Additionally, increased activities within other serious chronic diseases are driving the cost increase following progression of the early pipeline within cardiovascular disease and stem cells. This is partly offset by lower spend within obesity care driven by the finalization of the semaglutide obesity pivotal phase 3A program and COVID-19 impact on clinical trials. However, administration costs remained unchanged in Danish kroner and increased by 1% at constant, reflecting broadly change spent across administrative.

She has been since with the glucose sensor to be insulin without any risk of Gi tolerability or hyperglycemic issues. Then that is the decides they can then you're basically having a diabetes normalizing molecule I would say that that the balance between if you're talking about you'll be one therapies and tolerability BCP their efficacy.

I I think we feel that at the turbidity levels, we're seeing for our Semaglutide molecule, including what we are seeing at the 2.4 milligram dose in obesity and the step program, we've seen single digit level dropouts because of Gi tolerability concerns and a very high satisfaction with the therapy health related quality.

Karsten Munk-Knudsen: Operating profit increased by 6% in Danish kroner and by 7% at constant rate. Net financial items showed a loss of around 1.8 billion Danish kroner compared to a loss of around 3.1 billion in 2016. Diluted earnings per share increased by 10% to 14%. Free cash flow was 41.6 billion Danish kroner compared to 32.7 billion Danish kroner in 2019. The increase was driven by higher net profit and favorable timing of rebate payments in the U.S. Please turn to the next slide.

Fly whether it was is to meet the park I collide or is it 36, where they was estimated psychologically are all basically was increased at 2.4 milligrams and I can say here, we have a good balance between Gi Tolerability and efficacy. If you go much beyond that I'm afraid it starts to be a different situation. Because then the patients like Mike to off.

Be a a bit troubled part by nausea, and the likes but that's not what we have seen so I think that mall is covered in the terms of selling a GSM glucose instead of engine I mean, we mile here. If you can achieve better glycaemic control that will be put into the call and other models of the hills economic outcomes and actually.

Karsten Munk-Knudsen: As Lars mentioned, our growth outlook for 2020 was updated on the 8th of October. Sales growth is expected to be between 5 and 8% at constant exchange rates. The guidance reflects expectations for continued robust sales performance for the GF1 franchise, The Portfolio of New Generation Insulin, and the BiFarM product. The guidance also reflects intensified competition within diabetes care and biopharmaceuticals, especially within the hemophilia inhibitors. Furthermore, continued pricing pressure within diabetes care, as well as expansion of affordability initiatives, especially in the US, are expected to impact sales. Given the current exchange rates versus Danish kroner, reported growth is now expected to be around 3 and 4 percentage points lower than at constant exchange rates, respective to sales and operating. The current COVID-19 pandemic causes uncertainty to the outlook regarding new patient initiations and societal impact, such as the unemployment rate in the U. The estimated annualized impact is now around 2%, and operating profit growth is expected to be between 5% to 8%.

I've, a great efficacy and more bang for the Buck for the payers and if you're on top of that reduce the risk of side effects you actually have a pretty interesting molecule also from their perspective.

Okay. Thank you very much domestic remote next.

Next question please.

The next question comes from the line of Peter system somehow Spanking. Please go ahead.

Thank you for taking my question I have one on.

And then just a follow up question.

I mean not to just spend you how should we be.

We are very close to launch so.

Yes, they are.

You could provide some.

Thanks for the comments on how many decisions I keep describing obesity drugs.

Today, and what is your target for year, one post launch.

Three post launch and where you are in your preparations.

In order to have you prepared.

In terms of reimbursement et cetera, it's just for us to gauge you know.

Oh, that's fast uptake.

So that's the first question if I have to select a second one.

It will be.

With respect to the Q.

Sensitive insulin.

Saying that you have to phase one data next year typically you will see in phase one quite some time, assuming pges molecules could you confirm that you are planning to start phase two relatively shortly after that.

Should we expect that to take it.

Given much.

Thank you Peter So first Camilla on.

On obesity and the level of disclosure, we can get if I'm not sure. We can give talks about number of prescribers are after one or two years, but any there comes from that and mess then on a go sense of insulin speed of going to next phases.

Yes, hi, Thank you last and so what we can say that aspiration for long tenfold obesity, and Kent Harvey <unk> and looking at the number of prescribers, Andy It's very clear that follow the city of close to be.

And realizing the significant potential that it has for the future we need to be looking at and more prescribers than we have today. So that's a key focus of Allison beacon supported with a lot of education in the area.

Karsten Munk-Knudsen: The updated outlook reflects savings due to COVID-19. The expectation for operating profit growth primarily reflects a sales growth outlook and continued investments in current and future growth drivers. Financial items are now expected to be a loss of around 1.4 billion Danish Kroner compared to a loss of 1.2 billion Danish Kroner. Bill and Denise Croner in Aarhus.

Another focus areas of allergies have caught the number of people seeking treatment and so here, we know that plan would see something 50 million people all suffering from obesity only a fragment of those actually to seek treatment we estimate around 10%. So in both of these areas they significant potential, especially now.

When we will be launching some appetite to find fault that has twice the benefit intends to weight loss after saxenda.

And I think it's also encouraging to see that we actually now have this new a nice endorsement of saxenda in the UK.

Karsten Munk-Knudsen: This development mainly reflects losses from non-hedge currencies due to depreciations across several emerging market currencies. Lastly, we now expect free cash flow to be between 34 and 39 billion Danish Kroner, reflecting a higher net value. And now, all to last for his final remarks. Thank you, Karsten. Please turn to slide 17.

So I think we are making progress and actually being able to articulate the value of treating obesity and obviously this is based on sex enter the no. One can only believe what a similar type can do.

Mass or two on the glucose intervention.

Yes, so what you do Peter is the usual story you start with a single ascending doses and then you move onto multiple ascending doses and you typically in an instant trial will always need a comparator and that comparator. If it's a glucose intervention, where you want to document that it has to be glucose sensing you have to go up against a competitor.

Lars Fruergaard Jorgensen: We are very satisfied with the performance in the first nine months of 2020, despite the negative impacts from COVID-19. More patients use our GLP-1 treatments, and our diabetes market share and market leadership continue to expand. Within R&D, an important milestone was reached, with encouraging results from the Phase 2 trial in cardiovascular disease with Siltivecumab, the lead candidate from the Covidiotherapeutics acquisition earlier this year. With that, I would like to say

So with the least documented hypoglycemia risk to prove or even further benefits and that that in these cases engine degludec.

And the way that you can assess four.

For instance, the risk of hypoglycemia is by forcing the patients with for instance, tripling the instant dose into what could be a severe hypoglycemic condition had they not been a in a hypoglycemic camp situation, where you can see them at any pre defined glucose level and then you can see be measured do they go down they are to the level at the safety.

Mobile without rescue therapy. This is the kind of trials. We are doing they are on now they are ongoing as we speak and of course moving into phase two from from there on we will do as fast as possible.

Operator: And we're now ready for the Q&A, where I kindly ask all participants to limit themselves to two questions. Operator, we're now ready to take the first set of questions. The first question comes from the line of Vimal Kapadia from Bernstein.

Thank you Camille. Thank you mentioned, thank you know next set of questions. Please.

The next question comes from the line of Martin Parkhoi, sometimes can bank. Please go ahead.

Vimal Kapadia: Please go ahead. Thank you very much for taking my question. So just a few for Mads, please.

There's lots of <unk> Danske bank.

Two questions first on on I O. One of your competitors have mentioned yesterday.

Mads Krosgaard-Thomsen: So Mads, just first, can I ask about the balance, how you think about the balance between HbA1c control and tolerability of GLP-1? So firstly, you know, what in your mind is the HbA1c level at which incremental increases are less relevant, given the impact on vascular complications starts to slow down, and you know, the majority of patients are under good glycemic control? And secondly, at what level of nausea, diarrhea, and vomiting do you believe the tolerability concerns outweigh the benefits of incremental HbA1c control?

That there there was some weakness in some they also have pockets markets in a outside the North America, it's not really reasonable in your <unk> numbers I'm, a safe, but that I have seen a small sign of that and it is something that we should expect to escalate going into a two 2000 and.

And 21, and then just on the Jupiter one pricing the U.S.A. I can understand that you were not to give any hard numbers on where the pricing are this year next year, but just conceptually and if you look at the what the Lilly said earlier. This week and then if I look at I guess that unit.

Mads Krosgaard-Thomsen: So what I'm really trying to get is a sense of balance between these two prescribing drivers, you know, both from the patient and the physician side, whilst taking into account compliance clearance. And then my second question, you know, you've now started a glucose-sensitive insulin trial that complements the weekly insulin 965, which targets micro and macrovascular complications. But how should we think about these three novel insulins in the context of what we are seeing in the basal market today? You know, what gives you confidence that these products will actually raise the bar enough to make a difference in what is a very challenging market? And so how should we think about the return on investment of these products? And then, just a very quick one to tie in with that, you know, what is insulin 147? I'd never heard of that one before.

Pricing if you adjust for the Victoza true up then it may be a down 10% in India in the in the third quarter that slightly more than that then you can you maybe discuss it conceptually why is that it giving that it appears that your segment mix change a much more favorable than then really and.

How should we conceptually Luke EDW compared to to live with a fairly old killed one now going into the coming years.

Thank you Martin for those so two questions and let me try to give it a shot.

So we're not really seeing anything that is a measurable impact of lower out of pocket.

Pay.

You know we have a good momentum both with arrangement and Utica, one and we had the market fit strategy that still are putting through so we are quite encouraged by the growth levels, we see in Iowa.

Mads Krosgaard-Thomsen: Thank you. Well, the last one first, it was a hybrid molecule that had dual activities, but you shouldn't concern yourself about that one anymore for the time being, but more focus on the GSI insulin and the cardioprotective insulin and, not least, of course, the icodec insulin entering phase three. But it's a long-standing debate about the kind of correlation between A1C control and cardiovascular risk and what level is okay. And I think it suffices to say that the most ambitious A1C guidelines, namely the American Academy of Clinical Endocrinology ACE, they have a 6.5% A1C target, and they have derived that from the notion that when you go much beyond or below 6.5 in A1C, there is very little contribution of glycemia or hyperglycemia to the expected advent of major adverse cardiovascular events or macroangiopathy.

Two were to the U.S. a good one pricing.

[music].

What we see in Q3 is a continuation of what we have seen in the first and second quarter of this year. So we don't really see much change. It's a it's a market with a very attractive volume growth.

We're down to 8% of patients are using just the one we see differentiation in the market. So it's really a market that's driven by launch of new products, which is fueling growth and a and preference.

And and the pricing impact from year over year, enhancing rebates level a bit to stay on on on open formulary is.

You know the legislative impact we see in Medicare now and then getting to your point about a channel mix and maybe portfolio is is unchanged or fall for us.

As a function of a.

I'd say the differentiation of products in the market you of course have dynamics, where.

Brands as they grow older and the categories. They have brought on board, our access and get into lower price points and as new products are launched.

Mads Krosgaard-Thomsen: Likewise, for microvascular complications, so I would argue that in a patient who's anywhere in the range of 6.5%, you would have to weigh up against the tolerability profile any glucose decrement below that level. That being said, of course, if you can achieve normal glycemia, such as, for instance, with a glucose-sensitive insulin, without any risk of GI tolerability or hyperglycemic issues, then that is a desired state; then you're basically having a diabetes normalizing molecule.

Typically starting in the high end of the market you of course have the different players will have different say quality of book of business over time and that dynamics will probably changed a bit between the competitors, but we don't see any significant change or the the quotas. So what we communicated is a it's a staple of Citi.

Jason compared to what we've seen in prior quarters.

Thank you Martin and next set of questions. Please.

The next question comes from the line of Simon maybe from Exane. Please go ahead.

Afternoon, everybody. Thank you for taking my question I go to I think the main you come out, but you didn't discuss in the presentation, but I'm. Just wondering if you could maybe give us an update with respect to your intention or otherwise whether or not you are involved in the phase three program.

Mads Krosgaard-Thomsen: I would say that the balance between, if you're talking about GLP-1 therapies and tolerability vis-a-vis their efficacy, I think we feel that at the tolerability levels we are seeing for our semaglutide molecule, including what we are seeing at the 2.4 milligram dose for obesity in the STEP program, we've seen single-digit dropouts because of GI tolerability concerns and very high satisfaction with Health-related quality of life, whether it was estimated by Icolyte or SF36, whether it was estimated [inaudible] Thank you very much.

I'm not going to smoke inside and outside the <unk> and then with that with the data set to be published next Friday I believe.

Would you like urge caution to over interpret that with what we should see and just.

Your views around that would be very helpful. Thanks.

And then secondly on is just the broader discussion on on obesity, obviously, you've got the recommendation from nice which is positive but still in the U.S.. We remain similar to Lucy I'm. Just wondering if you could help us understand how negotiations are going there with the authorities.

Operator: Next set of questions, please. The next question comes from the line of Peter Seesters from Hennesbanken. Please go ahead.

You know if it does remain elusive the rationale really using your product your review voucher for socket side <unk>. Thank you.

Peter Verdult: What is your target for year one? Where are you in your preparations in order to or how have, Peter Welford, Simon Baker, Emmanuel Papadakis, Eric Berrigaud, Benjamin Yeoh, Rajesh Kumar,, Peter Welford, Simon Baker, Emmanuel Papadakis, Eric Berrigaud, Emmanuel Papadakis, Mark Purcell, Peter, so first Camilla on. On obesity and the level of disclosure we can give, I'm not sure we can give targets about the number of prescribers after one or two years, but any comments on that and then on glucose sensitive insulin speed of going to the next phase? Yeah, thank you, Lars.

Simon first mess on.

Potential.

Start of phase three in the autonomous.

Yes, well I I was essentially a repeat I I think what I also may be a onto the last time deemed that we will not discuss looking at the aggregate at the burden of evidence or lack of such a in terms of favoring entry with the semaglutide into a phase three trial in Alzheimer's old times to seize slash.

My cognitive impairment and in that regard one has to look at.

Whatever exists out there, including the let's study part but by no means the led studies I don't think is the.

The solution to all questions in that field for for a number of reasons, but it will of course be interesting to see those data I believe it's a next weekend. When also has looked at the aggregated data sets that exist from meta analysis. As you know we have done from from registry pay studies and from a preclinical studies and then they make up.

Camilla Sylvest: So, what we can share is that, as preparation for the launch and for obesity in general, we are looking at the number of prescribers. And it is very clear that for obesity, of course, to be realizing the significant potential that it has for the future, we need to be looking at more prescribers than we have today. So that's a clear focus of ours, and we can support it with a lot of education in the area.

Once mind, Oh about such a decision. It is of course, a big decision to go to places that also means that one has to have all the pertinent considerations ahead of that decision.

Thank you mess and Camilo on obesity.

Yeah. So in in the U.S. in general that you say, 70% access into commercial segment to be 50 cap I wasnt really focusing on is to make sure that all same class up into this because in reality the real access is only 20% when we take this into account. So this is of course, where we are putting our focus.

Mads Krosgaard-Thomsen: Another focus area of ours is, of course, the number of people seeking treatment. So here, we know that with 650 million people suffering from obesity, only a fraction of those actually do seek treatment; we estimate around 10%. So in both of these areas, there is significant potential, especially now when we will be launching Simaglutide 2.4, which has twice the benefit in terms of weight loss as SACSENTA, and I think it's also encouraging to see that we actually now have this new and nice endorsement of Saxenda in the UK, so I think we are making progress in actually being able to articulate the value of treating obesity, and obviously this is based on Sa Yes, so what you do, Peter, is the usual story; you start with single ascending doses, and then you move on to multiple ascending doses. And you typically will always need a comparator in an incident trial.

<unk> for the longer term, we will also be focusing on to try and Sweden, which seems to be pretty active cost that potentially give access to long committed until maybe can't overtime and but it's small relates and political decision.

And right now cause me to match the tide, having as we talked about the fall at twice the thick of Saxenda that is also at sustain potential for longer stay time as we see that the a weight loss continues appliances 60 weeks well, we see from US that program. So in terms of that and the early everything gets Mac is tied to point out to the market.

Yeah, we can realize the potential.

Okay obesity franchise.

Thank you Camilla. Thank you Simon next question. Please.

The next question comes from the line of Simon Baker from Redburn. Please go ahead.

Thank you for taking my questions kicks him actually fell they especially on a it'll take the stability profile or lack of negative effect teach ace is impressive on an unusual match I just wondered if you had any thoughts on why you are not seeing a negative effect where others have.

Mads Krosgaard-Thomsen: And that comparator, if it's a glucose-sensitive incident where you want to document that it is truly glucose-sensitive, you have to go up against the comparator with the least documented hyperglycemia risk to prove even further benefits. And that, in this case, is Tecladec. And the way that you can assess, for instance, the risk of hyperglycemia is by forcing the patients with, for instance, tripling the insulin dose into what could be a severe hyperglycemic condition had they not been in a hyperglycemic clamp where you can save them at any predefined glucose level, and then you can simply measure whether they go down there or they level off at a safe level without rescue therapy.

And secondly, there was an interesting case report in England Journal, a couple of weeks ago.

On the use of Ruxolitinib for essentially with the sink type one diabetes.

I'd be interested in your in your thoughts generally about the potential for JAK inhibition.

In type one is something that you've looked at before what do you think this or any mileage in there. Thanks so much.

Yeah. So so I think as we've got a seal T and the the benign adverse event profile or by chemical profile that we've seen in the rescue trial.

I think there are two factors that come into play here one of them is the notion that it is oh six like in progress doesn't interfere with the aisles six receptor signaling complex that as you know also mediates other cytokines signaling events. So we're not interfering with that at the same time Weve apparently found a.

Mads Krosgaard-Thomsen: This is the kind of trial we are doing. They are ongoing as we speak, and of course, moving into phase two from here on, we will do so as fast as possible. Thank you, Camilla. Thank you, Mads. And thank you, Peter.

A dose down to the level of 15 milligrams that actually corresponds to daily dose of <unk> 0.5 milligrams since the monthly dosing regimen is deployed that is a solo and so potent that I think what we are seeing is a essentially intra vascular and their cardiovascular and inflammatory action without it.

Operator: Next set of questions, please. The next question comes from the line of Martin Parkhoi from Danske Bank. Please go ahead. It's Martin Parkhoi from Danske Bank.

Half of these antibodies actually permeating into more peripheral or target tissues, and compartments of the body, including the immune system and maybe therefore, having a much less of an impact then we have seen for four although I have six blockers. So I hope I can approved this will hold true in phase three but based on the data we have.

Martin Parkhoi: Two questions. First, on IO, one of your competitors mentioned yesterday that there was some weakness in some out-of-pocket markets outside North America. It's not really visible in your IO numbers, I must say, but are you seeing a small sign of that?

We think we actually had the emergence of a very encouraging a benefit to risk profile for fall for this particular compound. So we're very happy with the acquisition and with the progress of the project as we've got a JAK inhibitors and other remedies for type one diabetes.

Lars Fruergaard Jorgensen: Is this something that we should expect to escalate going into 2021? And then just on the DLB1 price in the US, I can understand that you will not give any hard numbers on where the pricing is this year or next year, but just conceptually, if we look at what Lily said earlier this week, and if I look at, I guess, that your net pricing, if we were just for the Victoria 2, then it's maybe down 10% in the third quarter. That is slightly more than Lily.

I I I have to say and we've been as you know working a lot in the field, including with the Intel Twin antibodies and tells me one antibody a with a very nice data set from phase two but that we have decided not to because as you are aware that that any remedy that will seek to reverse the older new process to the extent that you are at Boyd.

The immune attack and killing of the beat of cells in the pancreas will have to be so relatively powerful that it is unlikely to not have onto what side effects I.E. The benefits will go along with the the risks and I think the next major breakthroughs in the field of type one diabetes, if you'd want to go down that alley.

More likely to relate to regenerative medicines, such as Peter said replacement. When the work is very active with a late stage research project. As is also a couple of other companies.

Great. Thanks, I like your mess like Simon.

Next question. Please the next question comes from the line of Steve Scala from Cowen. Please go ahead.

Lars Fruergaard Jorgensen: Can you maybe discuss conceptually why that is, given that it appears that your segment mix changes are much more favorable than Lily's? And how should we conceptually look at you compared to Lily with a fairly old DLB1 now going into the coming years? Thank you, Martin, for those two questions. And let me try to give it a shot.

Well. Thank you so much two questions probably both formats.

When you see the first to Lilly turns appetite phase three data later this quarter what will you be most interested to look for and police enlighten us to any statistical method Lilly may employ to portray the data in the most positive light. So that's the first question second question is that we have tracked.

Clinical trial activity during the pandemic and it shows Novo trials that are recruiting are down 20% year to date.

Lars Fruergaard Jorgensen: In IO, we're not really seeing anything that is a measurable impact of lower out-of-pocket pay. You know, we have good momentum, both with the instrument and GLP-1. And we have the market fit strategy that's still pulling through. So we're quite encouraged by the growth levels we see in IO, to the US, DL1 pricing. What we see in Q3 is a continuation of what we have seen in the first and second quarters of this year. So we don't really see much change. It's a market with very, very attractive volume growth. We're down to 8% of patients using GLP-1.

That is two times worse than the next closest companies and 10 times worse than the average company. What do you think accounts for it for this is it a function of the therapeutic areas and what your traffic is it geography is or is it something else. Thank you.

Okay, well first of all I I can't really comment on the how does the statistical analysis of FCI side effects and related conditions, I think that that will be up to the regulators and all the other part is to really discuss that with the company.

Yeah, what I would look at as a what I would look at as a clinician is what is as we discussed in an earlier question.

Question during the session what is the balance between efficacy and side effects because.

There is no doubt you can achieve almost anything with the molecule. If you put people in into a.

Lars Fruergaard Jorgensen: We see differentiation in the market, so it's really a market that's driven by the launch of new products, which is fueling growth and preference, and the pricing impact from year to year enhancing rebates levels a bit to stay on open formularies. You know the legislative impact we see in Medicare now, and then getting to your point about channel mix and maybe the portfolio is unchanged for us. As a function of, say, the differentiation of products in the market, you have dynamics where brands, as they grow older in the category, they have broader and broader access and get into lower and lower price points. And as new products are launched, [inaudible] Thank you, Martin, and next set of questions. The next question comes from the line of Simon Maber from Exxon; please go ahead. Afternoon everybody, thank you for taking my questions.

Situation, where they're constantly vomiting of course of course that corresponds to two and fostering situation and that can actually almost make you undergo diabetes submission, but it's not a nice way to achieve that so you have to have the overall benefit risk profile defined and we discussed that at an earlier point in time and I I think we've hit that spot.

Both with the Semaglutide in injectable and in the oil basins at the doses that there you've heard us talk about earlier today and previously, but we'll have to see other to supply data as they come out it's a bit early to speculate and in particular for us.

In regard to clinical trial, I I'm not quite sure I agree with your statement because we follow the difference here is including the diabetes area and today, we've exceeded 40000 patients in the active trials. The greatest reduction we have been in any or delay we had been any trial, even the meat outcome trials that we wouldn't sit today is.

Max three months to termination based on current analysis, we have adopted a number off the.

Tools, allowing remote or contact between precision investigator and patient.

Operator: I've got two, I think they're mainly for Mads, but you didn't discuss it in the presentation, but I'm just wondering if you could maybe give us an update with respect to your intention, or otherwise, whether or not you will embark on a phase three program for somagrotide in Alzheimer's. And with that, with the data set to be published next Friday, I believe, would you like to urge caution not to over-interpret what we should see? And just your views around that would be very helpful, thanks. And then the second one is just a broader discussion on obesity. Obviously, you've got the recommendation from NICE, which is positive, but in the US, it still remains somewhat elusive.

<unk> for medicines at the postal address of the person a involved in the trial and a lot of other things that can make a source data verification possible remotely using a newly developed apps and the likes so so actually I would say that no one else gets a bit proud that we are able to say that we have managed to basically a enhanced.

The portfolio and grow the portfolio and the amount of patience during a time of could be 19. So I'm I think one of the reasons is that we have Oh clinical research associates 2000 of them all over the world and they're very dedicated colleagues and they've worked closely with headquarters to adopt these new you can say remote or tools that will allow us to do virtual trials.

Mads Krosgaard-Thomsen: I'm just wondering if you could help us understand, you know, how negotiations are going there with the authorities and, you know, if it does remain elusive, the rationale really for using your priority review voucher for somagrotide obesity. Thank you.

Almost a possibly next year, even in a code 900, titration, allowing us to progress the pipeline. Thanks.

Yes, Thanks to you for those questions next questions. Please.

The next question comes from the line of Peter Verdult from Citi. Please go ahead [noise].

Thank you Peter Hill City, two questions laws, just on potential U.S. Trump tax reform, we will know net pricing is there a retiree.

Hey, Bill.

It's a little bit ashamed to know exactly what else can you have you done a whole exposure I'm. The one bipartisan bill at nearly made up for this year was curtailed caps that regardless of who wins next week I'll be interested in other words, you all new co pay capsule. Other solutions that you think salaries to deal with the fundamental problem not lowering out of pocket costs.

Mads Krosgaard-Thomsen: Yes, well, I essentially repeat what I also maybe answered last time, namely that Novo Nordisk is looking at the aggregated burden of evidence or lack of such in terms of favoring entry with semaglutide into a phase 3 trial in Alzheimer's or Alzheimer's, Slash Malcognitive Impairment. And in that regard, one has to look at whatever exists out there, including the LAT study, but by no means, the LAT study is the solution to all questions in that field for a number of reasons. But it will, of course, be interesting to see the data. I believe it's next weekend.

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Coming up so I could come back trapeze kitchen collection, especially the or I'm not asking for year, one to five [laughter] Cemig D forecast internally I'm going to do you want to just understand how you're thinking about the opportunity. If we all know the number of large undertaking is good.

Got a base I'm not leaving it doesn't mean, it's terrible well we haven't talked about is extended to tell your list price is way in excess of $50 a day, which carries no conducive. So I'm. Just wondering you have a drug thats clinically significant efficacy, but are you thinking about being able to price at a premium to create a small kids all giving us.

Mads Krosgaard-Thomsen: One also has to look at the aggregated data sets that exist from meta-analysis, which we have done from registry-based studies and from preclinical studies, and then make up one's mind about such a decision. It is, of course, a big decision to go to phase three, so one has to have all the pertinent considerations ahead.

Do you have a single dose device that gives you an opportunity to really rapidly expanding.

Ladies and reimbursement by going it alone plus some general thoughts about how you can maximize the commercial opportunity for MPC. Thank you.

Camilla Sylvest: Yeah, so in the US, in general, there is 70% access in the commercial segment to obesity care. But what we are really focusing on is to make sure that employers also opt into this, because in reality, the real access is only 20% when we take this into account. So this is, of course, where we are putting our focus. For the longer term, we will also be focusing on the Troyer Treat and Reduce Obesity Act, which potentially will give access to medicare to Medicare over time. But this more relates to political decisions.

Thank you.

Oh, I I'll refrain from going into much detail about the us elections, and what could happen I can only observe that a lot of ideas has been on the table, but it's quite difficult to make it make significant a intervention in a in a rather complex and and gridlock, a U.S. health care system.

And we are launching a portfolio of competitive products, we have a inhibition of converting the 70% no business to innovative products and as such conduct business based on clinical differentiation and real need and demand in the market I think that's that's the strongest position having any market.

Camilla Sylvest: And right now, of course, with temaglutide having, as we talked about before, twice the effect of sexander, there is also a sustained potential for longer stay time, as we see that the weight loss continues up until 60 weeks, as we see from our STEP program. So in terms of that, the earlier we can get temaglutide 2.4 to the market, the earlier we can realize the potential of the obesity franchise. Thank you, Camilla. Thank you, Simon.

And I'm, not saying will be immune for cancer for interventions, but that means that there will be an underlying wish to to use our innovative innovative products and I feel comfortable that we can compete.

And also be success will be successful from financial point of view.

In most of these potential interventions.

So we have to wait and see what are the political system can can agree on in a market, that's largely a private market and hence or not that prone for for regulation.

Camilo on a on a back to be strategy.

Operator: Next questions, please. The next question comes from the line of Simon Baker from Redburn. Please go ahead. Thank you for taking my questions. Two for Mads, if I may.

Yes, so it just to recap.

We have on the general market expansion, we are working on a thought I mentioned, so one is about having obesity recognizes the disease and AG piece of course, well in each will be extremely important fall also reimbursement down the vote and we also are working on a number of AML patients seeking treatment and justify mentioned.

Simon Baker: Firstly, on Zilti, the lipid profile, or lack of negative effect, is impressive and unusual, Mads. So I just wondered if you had any thoughts on why you are not seeing a negative effect where others have. And secondly, there was an interesting case report in the New England Journal a couple of weeks ago about the use of roxalitinib for essentially reversing type 1 diabetes. I'd be interested in your thoughts generally about the potential for jack inhibition in type 1. Is this something that you've looked at before? Do you think there's any mileage in this? Thanks so much.

Got it right now only 10% of patients living with obesity treatment, but when they then go to the physician to get treatment actually the big majority of those are sent back without any treatment other than exercise and eating suggestions. So hey, both of these dimensions, we can work on with education and with that hopefully.

Also get some and more you can say persistent prescribers of obesity medication, it's clear that many of the people suffering from obesity also have a number of coal and mobility that from a health economic point of view gives rise to us disgustingly pay us and like we had just done make nice intensive the cost effectiveness.

Mads Krosgaard-Thomsen: So I think as regards CILTI and the benign adverse event profile or biochemical profile that we've seen in the rescue trial, there are two factors that come into play here. One of them is the notion that it is an IL-6 ligand blocker. It doesn't interfere with the IL-6 receptor signaling complex, which as you know also mediates other cytokine signaling events, so we're not interfering with that. At the same time, we've apparently found that it goes down to the level of 15 milligrams. That actually corresponds to a daily dose of 0.5 milligrams since the monthly dosing regimen is deployed. That is so low and so potent that I think what we are seeing is essentially intravascular and cardiovascular anti-inflammatory action without enough of these antibodies actually penetrating into more peripheral target tissues and compartments of the body, including the immune system, and maybe therefore having much less of an impact than we have seen for other IL-6 blockers.

A better treatment and anything that's perspective, that's macro tied to point fall of course has an even bigger impact than what we had been used to wait saxenda. So so these are that I mentioned that we are working on it you realize our long term strategic escalation that we communicated that our last capital markets day of course reimbursement.

Important but it is also a very patient driven to he said we talking about here. So it is that you just not at a pretty weak I see thoughts to where we had ice our ambition but of course it is something that we keep working on it when it comes to the price and as you know from my other launches we've done we would only communicate amounted <unk> price.

By the time that we launch.

Okay.

Thank you.

Yeah.

And the next question comes from the line of Michael Larsen from U.P.S. Please go ahead.

Okay. Thanks, very much two questions. Please one just bigger picture patients what for.

Mads Krosgaard-Thomsen: So I hope, I cannot prove this will hold true in phase three, but based on the data we have, we think we actually have the emergence of a very encouraging benefit-risk profile for this particular compound. So we are very happy with the outcome, and with the progress of the project. As regards JAK inhibitors and other remedies for type 1 diabetes... I have to say, and we've been, as you know, working a lot in the field, including with anti-L20 antibodies, anti-L21 antibodies, with a very nice data set from phase 2, but that we have decided not to progress, as you are aware, that any remedy that will seek to reverse the autoimmune process to the extent that you avoid the immune attack and killing of the beta cells in the pancreas will have to be so relatively powerful that it is unlikely to not have untoward side effects, i.e.

Lars during the last couple of quarters. He will give you an awesome steer on what's your underlying assumption was for normalization of patient foot hole I guess, we all thought we were going to get back to normal this year, but we have lockdowns coming again, so so what's your assumption on.

The shape of the flex all the patients for 12 recovery as we head into the end of the year and then and then early next and then my second question is on my belt. So sequentially. The third quarter. The product was light relative to where consensus was I guess, we've all been sitting here trying to use the prescription data.

And his team have realized price and it and it came in a little light. So as we look at Q3 over Q2 other than the cobot impact and the area under the curve is there anything else we should keep in mind as we think about the fourth quarter and trajectory into Twentytwenty one. Thank you.

Good.

So first a constant on a.

Mads Krosgaard-Thomsen: The benefits will go along with the risks, and I think the next major breakthroughs in the field of type 1 diabetes, if you want to go down that alley, are more likely to relate to regenerative medicines, such as beta cell replacement, when Novo Nordisk is very active with a late-stage research project, as was also the case a couple of years ago. Thanks very much. Thank you, Matt. Thank you, Simon. Next question. This next question comes from the line of Steve Scala from Cowan. Please go ahead. Thank you so much.

On what to expect in terms of what we have assumed in terms of patient a flow or patient normalization.

Yeah, and thanks for that question, Michael and ER and has you know then a you know predicting a pandemic and how it rolls out across the globe has proven to be difficult around you know first take a second to third wave I think what what has been encouraging for us to see is a is the resilience of our cheers.

But ER total script base.

And the and I've said this slightly smaller impact from man from Illinois, Greg's pace and alloy and breaks impact and you saw from the initial slide that last showed on encore with that that we see a great trend to improving or the past the chorus and what we've built into the interim order.

Operator: Two questions, probably both for Mads. Mads, when you see the first Lilly terzapatide phase 3 data later this quarter, what will you be most interested to look for? And please enlighten us to any statistical methods Lilly may employ to portray the data in the most positive light. So that's the first question. The second question is that we have tracked clinical trial activity during the pandemic, and it shows Novo trials that are recruiting are down 20% year to date. That is two times worse than the next closest companies and 10 times worse than the average company.

Thing is that we see a continuation of of our Trx transpire, but needless to say there is uncertainty around to how.

How could that will impact our business or the coming course onto the vaccine is generally available. So it. So that's that's why we also operating with a broader range say at this point there than we would normally do.

Thank you Carsten and just initially on repos performs we are very pleased with the launch we are making the reception of the product or the trends we see in terms of scripts. So let me just make that coming up front, and then Camilla and maybe a bit more Kevin on that.

Steve Scala: What do you think accounts for this? Is it a function of the therapeutic areas in which you travel? Is it geography, or is it something else?

Yeah. So we had today we have over at 30000 at HCP is writing the bouncers NB actually back to add the number of new 80 piece prescribing and be passive assets and we will have difficulty 19 impacted US also we have more than 900, new prescribers per week.

Mads Krosgaard-Thomsen: Thank you. First of all, I can't really comment on how Eli Lilly does its statistical analysis of DI side effects and related conditions. I think that it will be up to regulators and other bodies to really discuss that with the company. What I would look at as a clinician is, as we discussed in an earlier question during this session, what is the balance between efficacy and side effects. There is no doubt you can achieve almost anything with a molecule. If you put people into a situation where they're constantly vomiting, of course, because that corresponds to a fasting situation.

And with that we also have all these taking stack mode and that's you know axis is around 85%. So so in <unk> also our expansion and off the clock is working Oh, that's me happier planful, meaning that more than 80% of the new scripts is coming from outside the GLP one class and then okay.

You will also notice that they are the most recent numbers on how many thousand scripts at <unk>.

Well, we estimate that approximately half of those are still impacted and bike Alco pale voucher offering so just to keep that in mind and when you do a good number and then on the 21st of September we launched our new a DTC campaign wake up to the possibilities made without ending.

Mads Krosgaard-Thomsen: And that can actually almost make you go into diabetes remission, but it's not a nice way to achieve that. So you have to have the overall benefit-risk profile defined. And we discussed that at an earlier point in time. And I think we've hit that spot, both with the semaglutide in the injectable form and in the oral versions at the doses that you've heard us talk about earlier today and previously. But we'll have to see the TCEPSI data as they come out. It's a bit early to speculate, and in particular for us.

Ending and we thought that there was an immediate increase Ed to N. Two leases on all of it that's dot com website. Following this so as I said, we are very encouraged by the launch of the process.

Thank you for Mueller, Thank you Carsten and thinking Michael So next set of questions. Please.

The next question comes from the line of Sachin Jain from Bank of America. Please go ahead.

Mads Krosgaard-Thomsen: In regards to clinical trials, I'm not quite sure I agree with your statement because we followed different TA areas, including the diabetes area, and today, we've exceeded 40,000 patients in active trials. The greatest reduction we have in any or delay we have in any trial, even the major outcome trials that we're witnessing today, is max three months to termination based on current analysis. We have adopted a number of tools allowing remote contact between physician, investigator, and patient, arrival of medicines at the postal address of the person involved in the trial, and a lot of other things that can make source data verification possible remotely using newly developed apps and the like.

Hi, its actually Mike Thanks for taking my questions I'm, just trying to kick off the cost and then thinking 21 comps here, especially not next year, but I'm wondering at a high level you could just discuss some Christian pools to sales growth rate versus the existing 67% run rate I think you talked about coverage gap affordability and.

Initiatives run rates for the existing IRA 12%, so any updated dispatches that.

And any directional margin commentary for next year, how do we think about an X gene a cost rebound pulling a caveat savings or this year.

R&D growth given the number of phase three starts we don't see a number of outcome studies that.

Second question is on Chalmette mashing it breakthrough.

Imagine any any regulation conversations have changed your perspective on the ability to use surrogates to speed up the file and if you are able to use our fiber scan way DHS filed be and then just a clarification on Eli to your early commentary.

Mads Krosgaard-Thomsen: So actually, I would say that Nuno is a bit proud that we're able to say that we have managed to basically enhance the portfolio and grow the portfolio and the number of patients during COVID-19. So I think one of the reasons is that we have our own clinical research associates, 2,000 of them all over the world. And they're very dedicated colleagues, and they've worked closely with headquarters to adopt these new, you can say, remote tools that will allow us to do virtual trials almost possibly next year, even in a COVID-19 situation, allowing us to progress the pipeline. Thank you, Matt.

Regarding our decision to progress to phase three and you actually convene an advisory board yet to discuss options and when do you expect to make a decision by and how will you communicate to the market and working on the assumption that we'll hear nothing to me next week. Thank you.

Thank you Sachin first cost them, a while we do not guide for next year some hydrocarbons.

Yeah, and thank setting the stage for this question or so and so as long as the saying that night, then we'll issue a utterance one guidance in connection with our full year results in February.

Operator: Thank you, Steve, for those questions. Next question. The next question comes from the line of Peter Radul from Citi. Please go ahead. Thank you. Peter from Old City.

Our starting point is a and what you're seeing on buses currently an underlying run rate it to the tune of six 7% there in a in our base business.

Peter Verdult: A few questions. Lars, just on potential US drug price reform. We all know net pricing and zero rebates are off the table, which is a little bit of a shame for Novo because it would have helped given your heavy burnout hole exposure. The one bipartisan bill that nearly made it to the floor this year was copay caps. Now regardless of who wins next week, I'd be interested to hear Novo's view on copay caps or other solutions that you think could be proposed to deal with the fundamental problem of lowering out-of-pocket costs, and then Camilla I'm sorry to come back to obesity and commercial strategy don't worry I'm not going to ask you for year one to five semi-obesity forecast internally but I do want to just understand how you're thinking about the opportunity here because we all know the numbers are large and the data is good and that the prescriber base and that the reimbursement is terrible what we haven't talked about is this extenders the daily list price is way in excess of $50 a day which clearly is not conducive so I'm just wondering you have a drug that's clearly got significant efficacy but are you thinking about being able to price at a premium to create this market or given the fact you have a single dose device does that give you an opportunity to really rapidly expand the prescriber base and reimbursement by going in at a lower price some general thoughts about how you can maximize the commercial opportunity for obesity thank you, Thank you, Pete. I'll refrain from going into much detail about the US elections and what could happen.

The key drivers are you should we expect to remain the same. So so a continued to solitaire huge one performance a across the globe antenna and solid growth from a from Io why the U.S. It will still be in the process of of transforming the business tool to.

More recent the recent <unk> recently launched products. So Io S., we talk to and our capital markets day.

We're working with this said, 6% to 10% range or the five year period, we've had very good traction there. This year performing if even if off that a range or so so so of course, we hope to continue to have a solid traction.

In in Io in the 6% to 10% range to also come come next year.

As to U.S. enter and some of the puts and takes yes, it's Craig sorry.

We will not have the same covers kept impact and some of the affordability impacts where we have this year on the other hand. The then it then we have the unemployment where we only have a modest impact onto on channel makes a this yeah and we had this annualized to 2% impact on on an annual sales said pulling in the other direction.

And then I'd say finally, it with the puts and takes we also have some some tailwind this year in our growth among businesses from a from a supply issues with the compares a and of course, we don't expect that to continuing into next year.

And then lay on top of those puts and takes a which should be no surprise to the market then of course covert.

Lars Fruergaard Jorgensen: I can only observe that a lot of ideas have been on the table, but it's quite difficult to make significant intervention in a rather complex and gridlocked US healthcare system, and we are launching a portfolio of competitive products. We have an ambition to convert 70 percent of our business to innovative products and, as such, conduct business based on clinical differentiation and real need and demand in the market. I think that's the strongest position to have in any market, and I'm not saying we'll be immune to all kinds of interventions, but that means that there will be an underlying wish to use our innovative products, and I feel comfortable that we can compete and also be successful from a financial point of view in most of these potential interventions. So we have to wait and see what the political system can agree on in a market that's largely a private Camilla on back to the obesity strategy. Yeah, so just to recap on the general market expansions, we are working on four dimensions. One is about having obesity recognized as a disease.

COVID-19, and the potential segment third way said, just a puts a and additionally, our phase of uncertainty into.

Turning to the outlook, where we're looking into it.

Jim in terms of of March Incented and piano.

And if I if I take the different line said, then a with a more than 40000 patients a in a on clinical trials currently and expanding and moving towards a closer to the 50000, Mark and then of course, we'll be investing more in R&D. All yeah, you should do.

Note that that we're running a number of efficiency initiatives and in R&D also a in terms of running our clinical trial. So so it. It's it's not a linear approach you should take to it but clearly we will be expanding our investments in R&D was for social what we communicated to 12 months ago at our capital markets day.

In terms of isn't D., and we will continue to have a number of launches both with rebel says where we own in some 50 markets now Oh, sorry on Olympic only around 50 markets now and then rebel since well since.

In 10 markets at this point, so so quite a quite a number of launches a two to come and for for the new products in terms of the savings or this this yeah and into next year, Yeah, you're correct. We we have some savings I am.

Camilla Sylvest: And this, of course, will also be extremely important for reimbursement down the road. And we are also working on the number of patients seeking treatment. And just before I mentioned that right now, only 10 percent of patients living with obesity seek treatment. But when they then go to the physician to get treatment, actually, the large majority of those are sent back without any treatment other than exercise and eating suggestions.

We do expect also some savings could come come next year in terms of some of the learnings we have and also given the fact that the that the COVID-19. This is it's not a war come 21.

And then finally on the on cross Martina and cost of goods through old communicate that cuts from our first day.

And then we're ramping up our facility in the enclave North Carolina manufacturing for for all Semaglutide. So so with the with the earlier volumes of <unk> Hundred processor. Then you should expect a negative impact a mixed impact from it from rebel so.

Camilla Sylvest: So both of these dimensions, we can work on with education and, hopefully, with that, get some more, you can say, persistent prescribers of obesity medication. It's clear that many of the people suffering from obesity also have a number of co-morbidities that, from a health economic point of view, give rise to us discussing with payers like we have just done with NICE in terms of the cost effectiveness of better treatment. And it is in this perspective that Somagrutide 2.4, of course, has an even bigger impact than what we have been used to with Saxenda.

Say compared to what what do you see this year.

Thank you Carsten then you can do all the modeling all of you a mess quickly on a on seminars, yeah and pursue the ELAD question. It's probably yes. We have had advisory board meetings, we have discussed the potential profile of the GLP one receptor agonist like some appetite in that disease and there's no way.

I'm not connecting or any kind of potential communication in the area to the a in that study presentation. As we have described the previously it's a it's a multitude of all the data gatherings that will form the basis of of such a potential decision in regard to circuits for Nash I just don't believe in a combination of using for instance, Piper scandal.

Camilla Sylvest: So these are the dimensions that we are working on to realize our long-term strategic aspiration that we've communicated at our last capital markets day. Of course, reimbursement is important, but it is also a very patient-driven disease that we're talking about here. So it is not a prerequisite for us to realize our ambition.

Ill for this for one of the other by Kimball Biomarkers in conjunction to actually diagnose and followed the prognosis of mass treatment. However, as it stands today with the FDA and with the army with whom we have had meetings otherwise you cannot be granted breakthrough designation or they are we have actually agree that.

It will be biopsy based in phase three however, it may not be in the trial that the entirety of the population has to have reported 72 week biopsy results at the time of in D. submission.

Operator: But, of course, it is something that we keep working on when it comes to the price. As you know from other launches we've done, we will only communicate the price by the time that we launch. Thank you. Thank you. And the next question comes from Michael Laughton from UBS. Please go ahead.

So so there are some gives and takes there, but we I think on the way to a very robust trial designed with a single pivotal trial and they seem to to weaker results followed by an extension or where you see took at the hot outcome benefits of the drug post marketing.

Thank you thank you Sachin.

This concludes our conference call. Thank you for participating and the interest in new owners and do feel free to contact our investor relations offices or should you have more questions. Thank you and have a great day.

Michael Laughton: Thanks very much. Two questions, please. One, just the bigger picture of patient footfall, Lars. During the last couple of quarters, you were giving us some guidance on what your underlying assumption was for the normalization of patient footfall. I guess we all thought we were going to get back to normal this year, but we have lockdowns coming again.

This now concludes the conference call. Thank you all for attending you may now disconnect your lines.

[music].

Karsten Munk-Knudsen: So what's your assumption on the shape of the footfall, the patient footfall recovery as we head into the end of the year and then the fourth quarter and trajectory into 2021? Thank you. So first, Karsten, on what to expect in terms of or what we have assumed in terms of patient flow or patient normalization. Yeah, thanks for that question, Michael. And, and as you know, predicting a pandemic and how it rolls across the globe has proven to be difficult around, you know, first, second, third, third wave. I think what has been encouraging for us to see is the resilience of our TRX total script base. And, I would say the slightly smaller impact from a lower TRX base and a lower NBRX impact.

Oh.

[music].

Karsten Munk-Knudsen: And you saw from the initial slide that Lars showed on COVID that we see NBRX trends improving over the past quarters. What we've built into our modeling is that we see a continuation of our TRX trends. But needless to say, there is uncertainty around how COVID will impact our business over the coming quarters until a vaccine is generally available. So, that's why we're also operating with a broader range at this point than we would normally do. Thank you, Karsten. And just initially on Rappel's performance, we're very pleased with the launch, we are making the reception of the product, and the trend we see in terms of scripts. So let me just make that comment up front and then Camilla, maybe a bit more commentary on that.

Camilla Sylvest: Yeah, so today we have over 33,000 HEPs writing Rebelsus, and we are actually back to the number of new HEPs prescribing Rebelsus as we were before COVID-19 impacted us all. So we have more than 900 new prescribers per week on Rebelsus. We also have all districts in strike mode.

Camilla Sylvest: And as you know, our access is around 85%. So also, our expansion of the class is working as we had planned for, meaning that more than 80% of the new scripts are coming from outside the GLP-1 class. And then you will also notice that the most recent numbers on our Rebelsus scripts are, where we estimate that approximately half of those are still impacted by our copay or voucher offerings. So just keep that in mind when you do the numbers.

Camilla Sylvest: And then, on the 21st of September, we launched our new DTC campaign, Wake Up to the Possibilities with Rebelsis. And we saw that there was an immediate increase in visits to our rebelsis.com website following this. So, as Lars said, we are very encouraged by the launch of Rebelsis. Thank you, Camilla. Thank you, Karsten. And thank you, Michael.

Operator: So next set of questions. The next question comes from the line of Sachin Jain from Bank of America. Please go ahead. Hi Sachin, Bank of America.

Sachin Jain: Thanks for taking my questions. Just to kick off for Karsten, I'm thinking about the 21 outlook, obviously the official outlook next year, but I wonder if, at a high level, you could just discuss some pushes and pulls on the sales growth rate versus the existing 6% to 7% run rate. You previously talked about the coverage gap, affordability initiatives, and the run rate of the existing IO 12%, so any updated perspectives there and any directional margin commentary for next year. How do we think about an SG&A cost rebound following the COVID savings of this year and R&D growth, given the number of phase three starts with obviously a number of outcome studies there? The second question is on SEMA, NASH, and the breakthrough for MADS. Any early regulatory conversations that changed your perspective on the ability to use surrogates to speed up the file? And if you are able to use L for Fiberscan, when could the earliest file be?

Karsten Munk-Knudsen: And then just a clarification on ELAD in your earlier commentary regarding a decision to progress to phase three. Have you actually convened an advisory board yet to discuss options? And when do you expect to make a decision by, and how will you communicate that decision to the market? I'm working on the assumption that we'll hear nothing from you next week. Thank you.

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Karsten Munk-Knudsen: We sat in first Karsten while we did not guide for next year make some high-level comments. Yeah, thanks, Septim, for this question. So, as Lars is saying, then we'll issue our 21 guidance in connection with our full year results in February. Our starting point is, and what you see in our numbers, currently an underlying run rate to the tune of 6-7% in our base business. The key drivers, you should expect to remain the same.

Karsten Munk-Knudsen: So a continued solid GF1 performance across the globe and solid growth from IEO, while the US will still be in the process of transforming the business to a more recently launched product. So IO, as we talked about at our Capital Markets Day, we're working with this 6% to 10% range over the five-year period. We've had very good traction this year, performing even above that range.

Karsten Munk-Knudsen: So, of course, we hope to continue to have solid traction in IO in the 6% to 10% range also come next year. As to the US and some of the puts and takes, yes, it's correct. We will not have the same coverage gap impact and some of the affordability impacts we have this year. On the other hand, we have unemployment where we only have a modest impact on channel mix this year. And we have this annualized 2% impact on US sales pulling in the other direction.

Karsten Munk-Knudsen: And then I'll say finally, with the puts and takes, we also have some tailwind this year in our growth hormone business from supply issues with the competitor, and of course, we don't expect that to continue into next year, and then, on top of those puts and takes, which should be no surprise to the market, then of course, COVID-19 and potential second and third waves just put an additional layer of uncertainty into the outlook we're looking into. In terms of margins and P&L, if I take the different lines, then with more than 40,000 patients currently in clinical trials and expanding and moving closer to the 50,000 mark, then of course, we'll be investing more in R&D.

Karsten Munk-Knudsen: You should note, though, that we're running a number of efficiency initiatives in R&D, also in terms of running our clinical trials, so it's not a linear approach you should take to it, but clearly, we will be expanding our investments in R&D, which was also communicated 12 months ago at our Capital Markets Day. In terms of S&D, we will continue to have a number of launches, both with Rebelsis, where we're only in some 50 markets now, sorry, on Ocempic, only around 50 markets now, and then with Rebelsis where... There are ten markets at this point, so quite a number of launches are to come for the new products. In terms of savings this year and into next year, yes, you are correct; we have some savings.

Karsten Munk-Knudsen: We do expect some savings next year in terms of some of the learnings we have and also given the fact that COVID-19 is not over until 2021. And then finally, on gross margin and cost of goods, as we also communicated at Capital Markets Day, we're ramping up our facility in Clayton, North Carolina, manufacturing for all some aquatides. So with the early volumes behind rebalses, then you should expect a negative impact, a mixed impact from rebalses compared to what you see there. Thank you, Karsten. Then you can do all the modeling.

[music].

Mads Krosgaard-Thomsen: All of you, please move quickly on Xemnas. Yeah, and first, the last question is quite clear. Yes, we have had advisory board meetings, and we have discussed the potential profile of a GLP-1 receptor agonist like temaglutide in that disease. But no, we are not connecting any kind of potential communication in the area to the ELAD study presentation. Thank you very much for joining us today. As I said previously, there is a multitude of data gathering that will form the basis of such a potential decision. In regards to surrogates for NASH, I'm a strong believer in a combination of using, for instance, FibroScan and ELF or NIS4 or one of the other biochemical biomarkers in conjunction to actually diagnose and follow the prognosis of NASH treatment.

Mads Krosgaard-Thomsen: However, as it stands today, with the FDA and with the EMA, with whom we have had the opportunity to work together, we have not been able to; otherwise, you cannot be granted a breakthrough designation. There We have actually agreed that it will be biopsy-based in phase 3, however, it may not be in the trial that the entirety of the population has to have reported 72-week biopsy results at the time of NDA submission. So there are some gives and takes there, but we are on the way to a very robust trial design with a single pivotal trial and a 72-week readout, followed by an extension. Thank you.

Operator: Thank you. This concludes our conference call. Thank you for participating and for your interest in Novo Nordisk, and do feel free to contact our Investor Relations Officers should you have more questions.

Thank you and have a great day. This now concludes the conference call. Thank you all for attending. You may now disconnect your line. Thank you for watching! ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? [inaudible] , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ???