Q2 2023 Novo Nordisk A/S Earnings Call - London

August 11, 2023

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Clarence.

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Operator, we're about to get started.

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Okay shall we gave everyone seats. So we can get kicked off on time.

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Good morning.

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If we can if we can.

I mean, one timer on the.

Yeah, So I will try and kick off as we can.

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Yes.

Hi.

Okay.

Okay, everyone. So we can't kicked off.

Thank you very much.

Alright, Thank you very much everyone.

Sachin Jain here from the European Bofa alright. Thank.

Thank you very much to everyone for coming it's a real pleasure to be hosting <unk>.

<unk> results and obviously, we have a full array than anticipated on Tuesday was very good day, and so demand built so apologies were tightened here.

Half an hour and 15.

We have been tossed a suite I think we'd have half an hour of presentation and questions.

Thanks very much.

And then thank you bank of America for hosting Us Indeed.

Indeed, as a great week for US we are very excited and it's great to be on the road and talk about where the company is.

We will go through the slides relatively quickly so we can get into the Q&A.

I have to advise you that we'll be making some forward looking statements.

And obviously.

Things can turn out in a different way so please.

So please pay attention to this.

Comments.

From an overall strategic exploration point of view, which are really good about how are we tracking.

Both on our purpose and sustainability, we're obviously really strong commercial execution.

Execution.

Absent growth, we had in the first half of this year and the raised guidance.

Underpins both how we are excluding commercially but also how we are confident in building.

So being able to supply to our <unk>.

Higher high degree to this amazing growth opportunity.

We had a major of readout this quarter in R&D not least this week with the select data.

Very comforting for the longer term prospects of <unk> in obesity.

But it's really a molecule it keeps giving we have also seen the hip first data really needing data in heart failure space and maybe something that goes a bit below the radar at this point.

Individuals while for new molecule I think it would have.

Alright attractive even more attention so really really encouraging to see how we are broadening out.

The potential indications for <unk>.

And also the all data.

In the financial quadrant.

We've also.

It's been a bit more about in the slides really really strong growth.

We see that we can turn the higher governmental into higher operating profits.

And also an increased outlook.

<unk> built a really strong first half year for Novo Nordisk, we're encouraged about our outlook and with that I'll hand over to similar or a few more details on the commercial performance.

Thank you Lasse.

And.

When we look at Alto <unk> constituted.

And just moving in front of the microphone sorry.

Please go to 30% driven by both of our operating units.

North America, 44% gross and 17% growth, but also other regions all driving double digit growth Wendy and segment the growth into gene therapy areas, you see Q1 growth of 50%.

Insulin of minus 7% and then obesity Cao of 157% and <unk> of minus 18%, so basically more than 100% of our royalties driven by diabetes and obesity.

The.

Growth is driven 71% by North America in terms of shelf wells.

And 55% of our sales is now in the North America. So in.

That of course to announce Houston also constitutes of UPC sales goals. So I'll just dig into that a little bit more on this slide where you see the 150%.

Today's call is in the first half mainly driven by the US You also know that we have done commercial launches in the U S in Denmark, and Norway and most recently in.

Germany of via <unk>, and we have commercial access in the U S with more than 80% coverage and we are but we of course continuing to build supply to cater.

For this market in these patients and we are.

So continuing to make sure. Thank you support continuity of care for patients. So that they can keep those who are starting on the product can keep staying on the product and I'm sure. We'll talk much more about the obesity in the Q&A section also so I'll hand over now to Martin as we saw a little bit more about.

It will be a telephone thank you very much Camilla.

So I was also asked by <unk> to be brief and I think when it comes to select that's reasonably easy you assets.

A lot of questions over the last couple of years about select and that's been interesting it's really all about one number.

You've probably seen the data.

We only disclosing the primary endpoint at this point and obviously to see a 20% risk reduction in mace in the population as we investigated internet.

No less than stellar from our perspective, it's going to change the way that we see we treat obesity and obviously with a safety profile that again confirms the seats.

The approach that we have to.

The treatment of obesity lose maintenance side.

Really really happy with the data that we've seen.

Next steps and I've received a lot of questions already about secondary endpoints about more details about some of the things that all of our sports pharmaceutical, but also from a payer perspective I'm interested in.

We had to wait a couple of months.

Until the American Heart Association.

We will release more data both at the <unk> Congress, but also food applications and then obviously, we're working hard towards yes, sorry.

Sorry, the regulatory submission of the data.

In Europe and in U S to start.

In other R&D news, obviously, we are focusing a lot on also magnified in both diabetes and obesity in the sense that we are planning for U S submission in third quarter of this year for both diabetes and obesity 25, and 50 milligrams diabetes 50 milligram in Houston.

And then in Europe .

Q4 again for both diabetes.

And we said that we are initiating our phase III program for type two diabetes. The reason why you don't see.

And this is basically because phase III has.

In terms of recruitment being finalized for redesign to energy and that basically means that we are in the treatment phase and we are waiting.

<unk>.

As a good marker obviously.

Sure.

Good to see that it's easier to recruit.

When patients physicians are interested in the book.

And even with 5000 patients almost being recruited in the semi programs.

We actually finalize recruitment well ahead of time as compared to all things.

Already talk about select.

I think it's important to also cannot lost it.

<unk> trial, where we saw phase III results in business.

Really really strong and interesting data on functionality.

Of.

Magnetite in heart failure with preserved ejection fraction.

It's also important to call out that these measures functionality can actually be correlated to outcomes, which is why it's from a regulatory perspective is also interesting and we can actually expect to see a naval update when we combined with type two diabetes control.

Showing the benefits of <unk> in patients suffering from heart failure.

We terminated a <unk> agonist program.

Earlier this year basically based on not sufficient efficacy results Northland into a differentiated profile and as you know we have a very strong opinion on not progressing not differentiated.

Sure.

And then maybe in rare disease, obviously remind you that some are best and has been approved in both Europe and Japan for treatment of children with growth hormone deficiency.

And as some of you also have noticed we've announced that we've initiated.

<unk> III program.

It's actually an outcomes trial.

In heart failure with preserved.

And with that over to customers.

Okay.

Thank you Martin.

Brief and selective presentation.

So.

First half resource.

<unk> growth, but.

But of course, we're looking at the quarter I would be remiss, if not saying 36% growth in the second quarter, probably the strongest growth in the history of the company for sure. That's in absolute terms, so so really and staggering growth.

Delivered.

Through our portfolios can be presented.

And through that growth, we're investing in in the company's first of all in our supply chain. So we're building out our supply chain, we invest in building. The obesity market then of course to invest in building an attractive and competitive pipeline in both the medium and long term and still we are able to return.

<unk>.

Profit growth of 32% and earnings per share growth for the first half of 44%.

Outlook for the year, we raised both sales and <unk> outlook by by three percentage points.

That's not even the most impressive part of it because in reality our outlook for the year and May makes the growth rates. We saw in the first half so with 30% in the first half.

The midpoint for the full year is at 32% growth three zero percent growth, so really impressive growth in an industry, which is perhaps growing to the tune of.

No to mid single digits.

Same for operating profit growth, even higher in the sense that we get some gearing of course linked to our sales growth. So so a guidance of between 31% and 37% operating profit growth currency is unchanged compared to last and a slight downgrade on a free cash flow.

And this is purely because our free cash flow definition includes.

Cash flow going through business development activities.

As we disclosed.

Sure.

The Bicarb acquisition.

Connected devices and we have the masako acquisition. So adjusting for that then we are actually increasing our free cash flow in line with the with the strengthening business outlook.

So so much for.

For the outlook and then launched on our strategic aspirations.

I alluded a bit to it in the beginning we feel real comfortable controlling how we are progressing on our strategic aspirations.

An amazing demand for our <unk> based product portfolio and I think we're executing quite well in taking that opportunity and converting that into sales and I think you should rest assured that we are investing what is needed cautious scale competitors to continues to grow and aim to meet that demand.

Pipeline progress is equally important for us I think we have a very long underpinned growth opportunity with the <unk> based on the select data.

In parallel we are building late and early stage pipeline.

And we are quite comfortable that we can at that on top of the growth prospect Thats from Guotai provides so I'll leave it with that.

We should go to the Q&A session, which Daniel will moderate.

And maybe we should all come up again, so we can easily go through yes. Thank you a lot so I'll moderate the Q&A session. Please.

Clearly state your name and institution and let's go for one question.

Personal then we will can take different routes if time allows and as always I think we should give the first question to a host search engine.

Sachin Jain from us to be a challenge for many times once they're going to have one in two parts. If that's all right.

I am going to semi heart failure, if I may you've mentioned a couple of times you believe it's.

Underappreciated, so one from us and if you can talk about the correlation of this function outcomes to hard outcomes when we see data at ESC.

ASC in a few weeks to get hard outcomes data that gets across the 10% to 15% threshold that people cardiology is typically think clinically relevant Kimberly if you can just outline the commercial opportunity as an add on to standard of care. Thanks.

So both the KC CQ and this expanded bulk enhance can be correlated to outcomes, obviously is always a little bit difficult to quantify that coordination.

But it is to a level and it's a well established that from a regulatory perspective, it's actually possible to get both the six minute Falcon and <unk>.

To enable.

I think it's important for us to call out.

And again, we can't disclose the data, but we will obviously be looking at also select.

Where we had at baseline and 25% of patients having established heart failure and therefore.

Does it take opportunity to link into the distillate data as a secondary endpoint.

And evaluate this meant that impact on Hudson that will allow us to potentially not only to get functionality assessment into the label, but also maybe even.

Hot endpoints depending.

Obviously, the data and only takes minutes.

Thank you Martin and in terms of potentially estimate that approximately 25 to 30 million people, leaving lethal hedgpeth of cost.

Big Big part of them.

Living with obesity also so in principle, one could say that physical labor.

Almost cover that if you say a BMI of up 27%.

<unk>.

<unk> related comorbidities, but it will be very important for us to actually get it in the labor sort of be able to promote that and with that of course being able to establish a differentiator.

The Kobe compared to other treatments.

Martin Thanks, Kim Melissa we're ready for the next and I will give to Emily.

Hi, Emily field from Barclays I wanted to follow up on Doug Langa. His answers yesterday about select maybe having the potential to change the attitude of Medicare.

Just how would that work is that you need to have that added to the label first and then Medicare could have those discussions.

And then also if there was I believe the treat and prevent a bcf was reintroduced into the Senate.

This summer so any updates on the progression of that legislation.

Thanks, Hey, let me Emily Lastly would you take that.

Yes, so so it's a political process, obviously, it's hard to predict around that.

I feel confident that we will end up having coverage in.

In Medicare.

Exactly when it will happen is hard for us to mention.

<unk>.

Youre right that there is now it seems like this bipartisan support of that.

Yes.

But I also know there's a lot of other health care discussions going on.

So how this approach is hard to say.

I mentioned then when.

When the population has been on obesity treatment in <unk>.

In the workforce has been active taxpayers and eventually.

You would also expect to have support for such an intervention. There. So I think we'll get there short term its not something thats rate limiting for our ability to drive growth because we have.

Maybe half a million patients on treatment and we have access to a $4 5 million.

So thats the emerald of patients for us to source from the short term as we build this products. Thank you.

We are ready for the next question will.

We'll give it to Microsoft.

Thank you Tony.

Mark Purcell from Morgan Stanley .

A question for Mark to market when you look back outcome trials, including sustained six partners six when you look at the step program. We look at the Nash studies could you help us understand what percentage of the cardiovascular benefit you believe is weight related.

What percentages is known weight related.

So how would you educate and promote the message to the quality of weight loss might be different with semi versus competing and curtains.

Thanks very much.

What I think is a very important question.

Honestly.

You can see across the board maybe.

Maybe take a step back when we look at the effect of flex ambulatory magnesite uncontroversial benefit we can do at different variables and attribution.

To that effect and.

And we do that through what we call <unk> analysis.

And in that we can look at that.

Yes.

Different parameters, it's relevant for example for US may decide to look at.

Weight loss to look at a similar control to look at blood pressure to look at.

Debit lowering and potentially also to look at inflammation in northern Texas.

And we know already from diabetes that is.

Yes.

It's not just the classical controls.

In all of our start is the anti.

Inventory effects also magnified as puffed up has been quite important.

Most out there with a weight loss and the placebo control I can't disclose the data from from from select but obviously, we will do mediation analysis here also to explain what is driving the 20% benefit that we see.

We estimate the time and my assumption would be that just like we see the diabetes it will be impact weight loss, but he will also be the anti inflammatory effects, but probably also someplace in the control.

And the other parameters.

It is important to take a holistic approach to this is not just about the weight loss is not just about is less in our control, but the bigger picture of benefits that we see with <unk>.

Thanks, Martin and a quick comment from you.

Yes, so its actually as a follow up to what Martin is saying and with <unk> that is the only product that so far has proven unique cardiovascular outcomes reduction.

In terms of maize benefits.

Wendy will discuss a little bit more about the elements of that then that is of course also a clear differentiator Boston.

We will promote the product.

Going forward and you will hear much more about that when we when we when we publish more details.

But we can promote always depends on what Martin can deliver.

That's how things are constructed.

Thanks, Camilla will move down here to Pete.

People don't city, one question months again.

Were blind and sustained if I recall the event rate was around 9% to 12% and I realize that's a different population diabetics, but.

I will ask you to disclose data select but can you just help us.

Assuming that this population they assumed event rate was much lower is that a fair assumption or can you. Please tell us going into the study, although we'll know the data, but what you were assuming the event rate would be in this population.

Thanks, Pete and matching people want to know the data, but still had a question.

Yes.

So thank.

Thank you Ryan our assumptions were that typically we see around or maybe a little more.

Per unit with an equity assumed approximately half of that and.

I think it's fair to say without disclosing any data we were not that far off slightly above.

Thanks, Martin will move to Simon here.

Thank you it sounded like from Redburn.

I just wanted a bit more.

General because we've been asked this a lot last week questions on margins and the outlook for margins.

The two schools of thought but given your growth there is inevitably significant operational leverage in the business and margins will rise significantly over time. The other saying that you have a lot of investment in R&D going forward as you broaden the therapeutic base and the others, saying theres only so far you can let margin drawings before it becomes an issue.

With Payors.

So the question is no.

Sure guidance, but how do we think about that in terms of how far margins could rise how far margins should rise over time. Thank you.

I think thats for you.

Yeah.

Also like to China.

So.

In terms of margin.

At Comstock before our starting point being north of 40% in terms of operating margin is top quartile industry, we're not adjusting for financing.

No.

So a really competitive starting points.

So our strategy as a company in terms of resource allocation.

It's not driven by Martin there, it's driven by top line growth top line growth.

Really our top priority than investing in the business in a rational way in a rational way.

<unk>.

So at the last capital markets day, we indicated it would be broadly flat given different puts and takes especially investing in R&D.

And.

But what we didn't fully foresee it at less AMD as quarters like we just passed with 6% growth and as I said at Q1, when we grow at this pace then there will be margin leverage.

The magnitude of margin there it's of course pending on the investment opportunity. So if I just go through some of the main puts and takes.

And then for.

Gross margin.

And then given that given the product mix of what's driving topline growth than that.

That creates.

Margin gross margin expansion opportunity of course is partially being offset by some pricing.

Last year mix.

And secondly, it's also being impacted by a significant capex program because part of our Capex program, even though most goes to the balance sheet that certain parts of it that goes into the P&L, but net net.

Slightly improving gross margin is already at a high level is at 85.

SG&A.

Yes.

We'll have leverage.

Since we have the infrastructure more or less in place there will be investments in driving and delivering on the growth opportunities, we have but of course win win right.

<unk> limited on certain products then of course, we don't put more money behind it that would be a huge disruption.

And then finally in R&D.

This really comes back to the opportune too so.

So we see when you look at our R&D ratio then.

Below industry and of course with the growth rate. We have we also need to replenish our pipeline to build our company for the longer term and Thats why we are stepping up both in our empty and when you look at this year in masako.

Adjusting for anything linked linked to BD right. So.

That's part of it that three percentage point the guidance upgrade this year that that covers.

Trial running costs related to <unk> as an example in biofuel. So so I expect R&D ratio to go up over time and net net.

And then.

<unk>.

This year around 30% sales growth that will deliver margin expansion and then we'll come back to more specifically in the years to come when it come on topline guidance to what extent that opens up for margin expansion.

Scott So the original next.

Thank you Wilson at credit Suisse, I'm going to follow on from Simon.

And just look at pricing going forward.

So it's all very well, having a drug that you sell to half a million people, but if you sell it to 45 million people society isn't going to pay anywhere near the same price.

And.

I would imagine that at the moment, because everybody yourselves and Lilly both in diabetes and obesity are capacity constrained.

Youre actually okay on pricing, but if I look going forwards.

Wonder how competitive that might be and how low the prices might go for.

For example, at Kaiser Permanente is removed exempt again, julissa tea and gone 100% majority.

Medicare plan at least that's what it says on the website.

Is that just giving you an idea that they're all pay as outlet. He could just go one way or the other.

So I was wondering how you felt we should be looking at pricing.

Because we have very good assuming that this massive increase in penetration and we not always as good assuming that the price comes down to match.

Thanks, Joe.

I don't know who to call.

So.

Obesity price point that is somehow say.

Historically determined because there was an anchor point and the diabetes indication for Victoza in the market and then because of linearity. We ended up at the price point, we are at now.

And then you can say what is the payer reaction so far that it's actually a willingness to pay that.

And that also goes when the payer is an individual person that is try it.

No.

A lot of different attempts to lose weight.

So I actually think there is an attractive value case.

And that better case is just getting better.

Because many of those patients as alluded to by commuter matching our living with a number of.

Diseases.

And.

Now we have.

Product like <unk>.

About through B unfolds, and the number of indications that is extra supporting and many patients will benefit from all of these indications.

We also know that depending on which market we're talking about that <unk> launched at the highest price and then rebates takes it down over time. Despite the fact that we actually add more and more value to the product.

If look in the single payer.

The territory of like what we have in Europe .

Payers are trying to figure out how can we open up for this new medicine and we are also trying to look at how can we actually make sure that when you get to markets, we actually collaborate with single payers and making sure that those who are struggling the most that is a cycle economic elements obesity also that those who would not be able to pay our pocket.

Themselves that we actually work with health care systems to make sure that they addressed.

Acknowledging that no health care systems would actually be able to cater for all patients and then there'll be out of pocket segments. So I think we will see different.

Payer.

So our structures so to say in different markets, where we have an opportunity of getting through.

Actually creating a societal impact that's recognized and.

The payer will be willing to pay for it whether thats, a healthcare system or individuals and I think we'd have an immense impact on health.

At a population level by this intervention that I think will be recognized and appreciate it.

Thank you.

So we will go to Richard.

Yeah, Richard Parkes from BNP Powerbar exam.

Select so in theory, if you got a secondary prevention label from the FDA that could allow for Medicare reimbursement. So I'm just wondering how confident you are that might be the case.

Patient so individuals that could unlock.

It feels like it could be 10 to 15 million lives in the U S. Just wondering if you talk about that.

Capital you have ticked up.

So thanks for that question.

I think it puts a little bit on the <unk>.

What we discussed before so and.

So getting it on label of course, strengthening our position vis vis that there will be some medications should be available for <unk>.

For all people with obesity in the U S. When we look at the magnitude as last couple of before.

If you look at it today call it 100 million adults with obesity in the U S.

Almost half of those with insurance coverage and 1% of those with insurance coverage on an <unk> 1%.

So the runway on what we have currently is fantastic.

But and then with the Medicare coming on it's a political process. So there is no simple causality between.

Clinical trial outcomes, even though we'd like it and then legislation because it requires a exclusive changed that's political process.

It will come.

We think but but.

It's politics.

Let's see when it comes.

Absolutely.

Could allow for reimbursement by Medicare with outlets.

Thanks.

So.

It is a potential.

That's something we're looking into.

Weather.

But.

It would not be necessarily a slam dunk to get a broader approach to Medicare part D through the CV benefit.

At the heart failure trial, but that could that could be some opening vis vis reimbursement, but it's not something.

That is fully clarified at this point what would the process be in.

In terms of it we'll see if not the step edits.

The paperwork to get to that reimbursement so that's.

Not clarify that at this point, sorry for not being here.

Thanks, Catherine So we'll move over here.

Hi, Rajeev Kumar from HSBC.

Just.

Thank you very much for indicating that you're putting up R&D.

You would invest more when you think of capital allocation over the next three to five years.

Rich.

It would be more towards organic R&D or acquisitions.

If so how do you what are the thresholds you put internally.

In that context, if you could.

Help us unpack the latest evolution you paid for the acquisition.

What was the thinking behind it what was the logic in.

Cannabinoid receptor.

A lot of get worried when we hear about that but.

Have you found a billion plus valuation for that so it would really help if you could unpack that thank you.

I don't know Matthew stopped by giving the the rationale from your perspective, and then others can chip in.

Chip in here, but I think when we look at in versus external innovation.

It's very very clear you will not be successful.

Successful with external innovation, if you don't have very strong internal innovation.

Without putting a number is very very clear we have an ambition in all of our disease areas, who have strong internal innovation.

But then complement our internal innovation with what we can acquire from the external one.

I also have a very clear approach, where we go externally. We are now calling for late stage assets, we are going through.

Look at assets that.

In late preclinical early clinical so we can.

Deliver the value.

And built.

Those opportunities obviously does.

Little bit of a high risk, but there is also more than increase by taking this approach.

Specifically for the Amazon, but I don't think we should be worried because you're absolutely right with the CP one.

Antagonist.

It had been historically problems, but these are molecules that have primarily work in the central part of the body. So it will bring.

Where they obviously introduce some efficacy in terms of weight loss, but also some quite serious side effects.

With the <unk>, we have a CB one inverse agonist.

That primarily works in the peripheral tissue.

That actually caused for a really good efficacy, but also colon for minimization of the historical adverse effect because the impact on the brain is minimized.

And that also means that when we look at the clinical data.

It was very very clear in the historical clients.

It was present in 30% of the patients.

It's pretty easy to spot and it occurred within two to three weeks after treatment.

The initiation.

We allow ourselves to look at the clinical data, even if it's phase one phase two data.

We're looking at and some concentrate and see that they had actually managed to derisk. This.

Peripheral mode of action and noticed central motivation. So so so I think we take a very deliberate approach to how we to external innovation and investment and I don't think you should.

To be too concerned about the <unk> acquisition, starting for clarification Katherine valuation.

Yes very briefly.

The 1 billion you allude to that said, that's a biotech to us.

So we didn't pay a billion dollars of upfront just to be clear about that.

And the way, we think about it is basically.

We do an asset valuation like we do on our internal projects, including upfront and whatever subsequent liabilities and.

And compare that to the risk of the project and the potential future value opportunity.

The space and I think this one is.

From a front end than we do deal benchmarks on top of that so pretty straightforward as any other asset acquisition and on this one specifically I think it works out nicely.

Between the upfront and the risks and the marketer of June and then <unk>.

Frontload the derisking of the assets.

And so so from a financing point of view Cfos happening.

That's good to know and David will move too.

David Evans from Kepler Cheuvreux.

Just a question.

Select study population.

So as I understand this is kind of a subset of <expletive> CVD patients basically so it could be less than 10% in behavioral.

<unk> population if thats fair.

Can we extrapolate the results to the broader population.

So just on the CV risk.

I mean, especially given what we saw in leader and sustain six that was a big big difference between.

Efficacy in patients with preexisting Cvs, so theres not really not much of a trend in patients without <unk>.

Is it actually a different debates around whether you get coverage in CVD patient space to support the population will or will payers look at this somehow has the same population right across.

I think Martin you can start.

Yes.

Maybe <unk> wants to chip in.

<unk>.

Yes.

To distinguish between secondary prevention the primary prevention.

We've done we'll select as a secondary prevention. So we are investigating patients with overweight and obesity.

And the combination of either.

Myocardial infarction stroke and peripheral artery disease.

Essentially if any launch.

Population, if you will.

In the business base and two communist bond at 750.

People out there, even 10% would be lifestyle licensing it's slightly above 10.

10%.

I don't want to speculate where the payers would extrapolate to primary prevention, we have seen actually in the diabetes space that IAG samples that if you show prevention you will likely also show primary prevention, we ourselves are looking into primary prevention within diabetes and I think it's fair to say.

We will also discuss whether we need to do that with any at.

At this point in time I don't know.

From a commercial perspective, it's required by I think it would be interesting to move it from a clinical perspective. So we can continue to guide our prescribing decisions.

Patrick Timberland quick follow.

Yes, it's very shortly to say that two out of three people, leaving with BTG die from cardiovascular disease, and we know that they incurred through two to three times higher cost in the health care system. So of course, we witnessed the Nic data.

It likely to be high interest from payers to understand how we can bring down those costs.

Get the mic to bid.

Hi at some Danielle at RBC asset management I had a question on gas on human capital and organizational resilience.

Would you say your execution is average or above average or maybe even below and you guys are hiring probably at the fastest rate ever.

<unk> hired and that obviously causes.

A lot of friction do you feel that this hiring in the Brazilians as well do you have enough good people to execute because obviously a bit supply constrained now, but youre going to need.

They're good people to do that so that would be interested on some comments on the human capital side. Thanks.

Okay.

Thank you. So I think it's a great question, we are a people business.

It is people at the end of the day the terms of issuances.

Into.

<unk> products.

Andy etcetera, and Juris Good point, we have recruited some 8500 people over a year.

So.

I would say.

That's what I can say the HR department is working to provide <unk> recruited these people.

The majority of them goes into manufacturing.

And when you when you work in manufacturing, obviously, you need to work in compliance. So there's a significant onboarding tasks and training task going on and when you talk about ramping up capacity to surprise us of course, a function of that it takes time to train people.

I believe.

Have to make the disclaimers on bias because I've been with the company for 32 years.

I believe we have a unique culture, what we call the newer Nordisk way.

Just on a set of personal values that we actually assess leaders on whether the.

Work, each and every day.

And the consequences of not doing that so.

So I spent quite some time and understanding from new commerce, how they assess joining the Illinois and the first comment.

Typically kit is one in relation to the culture and the consistency between what we actually say, we do and what we do.

Dependent.

That's a unique feature.

I don't know if you guys have never tried to other places than Illinois. So it's something we really work hard on and we right now rolling out.

So you double down on Novo Nordisk way on boarding and education costs among those 8000.

<unk> on our new colleagues are also leaders.

Really really important for me and my colleagues each and everyone wants to talk in terms of culture, I think thats the best guarantee for turning that investment in people into assets that helps patients at the end of the day.

Yes.

We have money.

Thank you Howard <unk> from <unk>.

So just a quick question on oral with Ov.

And whether you can give any indication when you may look to assuming approval. When you may launch this product I'm just trying to understand the sense of how viable are large scale launch will be given the sort of higher API requirements.

And so do you feel confident that maybe in the sort of medium term, you'll be able to meet those requirements and if I may also ask just I know you may not sort of give any details but at a high level. How you may think about pricing the sort of the.

The ocean versus the injectable. Thank you.

Thanks for that Kristen.

S. Hawaiian I cannot comment on pricing at this point in time I can comment on with respect to some 50 milligram all connect with tag once the Max Aside of course, we are very happy with the result that you saw.

Similar efficacy to <unk> two four milligram.

Wendy looking at time to launch the first of course is approved and after approval we will be considering how we can scale it depending of course on demand.

And capacity.

I'm, saying that because of course, you all know that Dan or version with class Mall.

API than an injectable version. So this rollout of course is likely to be a dip.

Depending on how things are developing at that point in time. Since then in terms of demand and supply knowing that we want to make sure. We can cater for as many patients as possible and the demand right now seems to be a very high and therefore those are the considerations we have a much more about that when it's all approved thank.

Thank you so much cumulatively, we have time for a few more questions.

I think we're back at our host.

Thank you very much Sachin Jain Bank of America again.

One for Martin and then one big picture.

We didn't really discuss triple GE much Ada and you had a similar mechanism and Tony that you sort of preferred kangri semaphore. So just any perspective on how you believe you will following capacity release follow on and I guess, if you could just comment on your perspective on safety and then that diabetes profile because they started a phase II diabetes.

The Big picture first loss. This is a question I get a fab.

It's a straightforward answer <unk> consensus at peak across <unk>, and really is in the $80 million to $100 million range now and the question I frequently get even post select just how can the system digest the number much bigger than that so I wonder if you can touch on that for a couple of aspects in terms of indication.

How do you think about cash pay of the markets.

We will pay us digest a much bigger.

Essentially the pie being a single molecule drug class.

Thanks, Sachin will start with your margin.

Palace.

So.

Not to direct comparisons between our pipeline and our competitors, but I think I can do maybe on interest in the sense that we also had a triple gene our pipeline a couple of years ago.

And we obviously also did a clinical assessment of it.

And that we obviously it works.

It gives a good weight loss.

And it could potentially also have an impact in <unk>.

<unk>.

But it was more difficult in the diabetes space.

Inherent challenges.

With glucagon and may be the combination in the ratios.

Rectify that a little bit.

But we also saw other safety issues.

In the cardiovascular space.

And had some concerns about the protein metabolism effects of glucagon as well.

Given that we had okay, Chris Emma and we hit a triple T and our pipeline.

And we actually saw better efficacy.

With Zimmer and more clean safety profile from a pipeline perspective that was an easy choice.

And therefore, I don't want to speculate what others are doing.

Best of luck.

I think from an efficacy.

<unk>.

We'll see it works, but obviously again, we are very confident with it.

With the efficacy of <unk>.

Both in diabetes and obesity and we also are very confident of the safety profile of <unk>.

Diabetes and obesity.

Thanks Martin.

So I think there's no doubt that the tier one opportunity is a very sizeable one in New York is about how losses come is as good as ours.

It's important to.

Take this into a number of health benefits.

Started looking at type two diabetes.

See the benefits of that without looking at obesity, adding CV benefit to that.

We spoke about the <unk> data in the select.

<unk>, we started a number of other outcomes, so I think to really.

Assess how big is this.

<unk> class and what does it mean for us we actually need to start segmenting.

The value story from a medical benefit position.

And.

The population, we serve living with let's say broad cosmetic Pollock disorders. They would otherwise end up on say a handful or two handful of different individuals medicines to deal with these medical conditions and I think it's really really attractive. If there is one mechanism that can that can do it all.

And I think it creates flexibility and actually how we can.

You can define the value story for payers, because they kind of shifted.

Different values, depending on on which population they look at and I think thats, a really really attractive cash flows to be engage them. Thank you.

We'll take one final question before.

We'll wrap up with but there'll still be time for networking.

Thank you Mark.

From Morgan Stanley .

Martin could you give us your latest thoughts on oral.

Approaches for obesity, so small molecule versus peptides.

I guess covered in this summer DARPA.

The decision to move forward.

Nicole reasonably I don't moving forward can you combine small molecules for the stack technology, where is that something that you can't do that.

And then just a question of now having done the impresario daily you've talked about combinations are you looking at small molecule small molecule combinations or kind of your combined peptides and small molecules together.

Thanks Mark.

And I think both in the encrypted space, but also moving across to <unk>.

Always wind event to look at different modalities that obviously comes also to small molecule versus peptide based.

From our perspective, what we've seen with the Oasis program with the pioneer plus program.

I think if we just look at Q1, it's going to be from an efficacy and safety perspective.

Two.

Show, even better efficacy or safety.

As compared to that and obviously, that's why we are excited with the net loss in the Oasis data.

I think.

Broadly speaking.

We move them beyond for example, when the cycle.

Combination.

Interest and I think we see that with our acquisition. We see that also from from some of our competitors in order to increase efficacy, but without having to compromise on safety, we can do that induce combination.

Combining as opportunities and and all but we could potentially also be looking at combining.

Potential small molecules.

Margins.

Definitely on <unk>.

You're absolutely right, we terminated that on technical reasons basically because.

It was not really.

Differentiated profile we saw in.

And showing superiority to the mono components.

<unk> is requiring a really big development program. It was maybe not really want in this space.

Thank you Martin So that concludes our Q&A session, we'll still have a bit of time for the networking opportunity to talk with Benjamin but before we close finally lastly, any final words to you.

Okay.

We think there's opportunities for things such as <unk> Bank of America for hosting US all of you coming in liquid questions and also are you participating in the downstream.

Again, hopefully here the hugely excited about the momentum in the north right now.

Equally excited about both the short and the medium long term growth prospects of the portfolio of products, we have and what we have in our pipeline. So we look forward to report back to you in the coming quarters on our progress. Thank you.

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Q2 2023 Novo Nordisk A/S Earnings Call - London

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