Q4 2023 Novo Nordisk AS Earnings Call
[music].
Yeah.
Yeah.
Speaker Change: Good day and thank you for standing by welcome to the Q4 2023 Novo Nordisk earnings Conference call.
Speaker Change: This time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then he an automated message it fucking Johan this right do.
Speaker Change: A waste of your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference or at your Speaker today Daniele Boston C. D. P. On this Investor Relations. Please go ahead.
Daniele Boston: Welcome to this new notice earnings calls for the full year of 2023 and the outlook for 2020 for my name is Daniel most important and I'm the head of Investor Relations at Novo Nordisk with me today I have CEO of Novo Nordisk last workout yardstick.
Daniele Boston: Secretary, Vice President and head of commercial strategy and corporate a fast can be that's the best Executive Vice President and head of North America operations talk Louder Executive Vice President and head of development marching towards logging and finally, chief financial Officer Kastenbaum pollution all.
Daniele Boston: Speakers will be available for the Q&A session today's announcement and the slides for this call are available on our website <unk> Com. Please note that the call is being webcast live and a recording will be made available on our website as well.
Daniele Boston: Our call is scheduled to last one hour. Please turn to the next slide.
Daniele Boston: The presentation is struck opposite line on slide two please note that all sales and operating profit growth station that will be at constant exchange rates unless otherwise specified.
Daniele Boston: Specified.
Daniele Boston: Please turn to slide three we.
Daniele Boston: We need to advise you that this call will contain forward looking statements. These are subject to risks and uncertainty that could cause actual results to differ materially from expectations for further information on the risk factors. Please see the company announcements for the full year 2023, and the slides prepared for this presentation witnessed Oh, what's your last one update on our strategic escalates.
Daniele Boston: Yes.
Speaker Change: Thank you Daniel please turn to the next slide.
Speaker Change: In 'twenty to 'twenty, three we delivered double digit sales and operating profit growth and we continue to make progress on our strategic aspirations I walk you through the performance highlights before handing over the word to my colleagues.
Speaker Change: We continue making progress on purpose and sustainability on carbon emissions or kind of a car.
Speaker Change: Upon emissions decreased by 34% compared to pre pandemic levels in 2019.
Speaker Change: 'twenty three we reached more than 14 million patients without diabetes and abuse of treatments.
Speaker Change: To uphold our commitment to being a sustainable every player we expanded the number of women in senior leadership positions to afford one person.
Speaker Change: Compared to 39%.
Speaker Change: The end of 'twenty two.
Speaker Change: In the past year, we have developed and expanded our pipeline across all therapy areas in diabetes and obesity, we have seven separate seen several exciting trial readouts and we have advanced novel assets into phase III.
Speaker Change: We have also expanded our footprint in cardiovascular disease and strengthened our late stage pipeline in their blood disorders, Martin will come back to this and are all R&D milestones later.
Speaker Change: And 'twenty two and three we have achieved two major milestones within commercial execution. We have reached our beaches saves accretion of more than 25 billion Danish kroner, and our exploration for diabetes, which was to achieve one third of the global diabetes value market.
Speaker Change: Going forward, we continue to dream of treating more patients with our number two treatments.
Speaker Change: Lastly, we are very pleased with the strong sales growth of 36% and operating profit growth of 44% in 2023, both measured at constant exchange rates now.
Speaker Change: Now I would like to handle with word Camilla, who will give us the latest update on our commercial execution.
Camilla: Thank you Lasse and please turn to the next slide.
Camilla: 2023, our total sales increased by 36%.
Camilla: <unk> growth was driven by both operating units with North America operations, growing 54% and international operations growing 16%.
Camilla: Q1 sales in diabetes increased 52% driven by North America, growing 52% and international operations growing 53%.
Camilla: Insulin sales decreased by 6% driven by declining sales in the U S and weak in China.
Camilla: Obesity care sales grew 154 people.
In International operations sales grew 47% driven by both extend that N V go.
Camilla: Sales of 6% increased by 14% in place of the Gobi reached around 2 billion Danish kroner going forward, we continue to rollout the gobi in a sustainable manner by volume cap launches to balance supply and demand.
In North America operations obesity care sales grew 212%.
Camilla: Total <unk>.
Camilla: Sales decreased by 15%, which was driven by a 24% decrease in international operations and by a 1% decrease in North America operations. Following a reduction in supply of Naughty children.
Camilla: Please turn to the next slide.
Camilla: With 29% sales growth in diabetes care, we are growing faster than the total diabetes market.
As a result, our global diabetes value market share increased to 33, 8%, which is above our strategic aspiration of reaching one third of the global diabetes value market.
Camilla: This increase reflects market share gains in both North America operations and International operations. Please turn to the next slide.
Camilla: And international operations total diabetes care sales increased by 20% in 2023, which was primarily driven by tier one sales growing 53%.
Camilla: In order to keep the market leader in international operations with a tier one value market share over 70% with simply continues its <unk> one market leadership with 47, 5% market share. We felt this has just shy of 14% value market share driven by solid uptake across geographies and with that I will.
Duck: Hand over the word to duck.
Duck: Thank you Camilla please turn to the next slide in the U S sales growth of our GOP. One diabetes treatments are driven by a 50% expansion of the market in 2023 versus 2022.
Duck: In the fourth quarter of 2023, the prescription volume growth of the GOP, one class was more than 30% compared to the fourth quarter of 2022 measured on total prescriptions Novo Nordisk continues to be the market leader with around 54% market share. Please go to the next slide.
Duck: Obesity care sales grew by 154% driven by both operating units the.
Duck: Volume growth of the global branded obesity market more than doubled with a volume growth of 116%.
Duck: And international operations obesity care sales are driven by a strong second quarter performance and then we'll go Ob launches and seven international operation countries.
Duck: In the U S sales of will go away grew by 393%, reflecting the commercial relaunch in January of 2023.
Duck: To safeguard continuity of care, we reduced the release of lower dose strengths back in May of 2023, which continued throughout the remainder of last year.
Duck: I am very pleased to state that we are now enabling more U S patients to initiate treatment by more than doubling the amount of the lower dose strengths of <unk> compared to the previous months.
Duck: We will gradually be increase in the overall supply throughout the remainder of 2024.
Duck: Please go to the next slide.
Duck: Our rare disease sales decreased by 15%.
Duck: The sales decrease was driven by a 1% sales decline in North America operations, and 24% sales decline in international operations.
Duck: A rare blood disorders increased by 3% driven by the launch products in hemophilia, a and B and partially countered by Novo seven <unk>.
Duck: Sales of our rare endocrine disorder products decreased by 47%, reflecting a reduction in manufacturing output.
Now Martin over to you for an update on R&D.
Martin: Thank you Doug Please turn to the next slide.
Martin: First I'm very pleased to share the exciting headline results from the combined three trials with once weekly <unk>.
Martin: Pine tree was a 52 week open label treatment phase III trial.
Martin: Once weekly <unk> with once daily insulin Garden U 100, together with up to four daily injections of insulin as spot.
Martin: This is also called basal bolus insulin treatment.
Martin: The objective of combined <unk> was to assess the efficacy and safety of once weekly yakushima in people with type two diabetes poorly controlled on daily Paisley instrument.
Martin: The dry the trial achieved its primary endpoint of demonstrating non inferiority and reducing even see at week 52, with once weekly <unk> compared to instrument launch a new 100 together with the instrument is spot.
Martin: From an overall it won't see baseline of eight 3% once weekly I cause Shimmer achieved an estimated reduction in <unk> of 1.47 percentage points compared with one point, both Xerox and it punch coincident large integrated with it's really a nice one.
Martin: People in the trial had a baseline body weight of $85 eight kilograms.
Martin: Treatment with Iqos and achieved a superior reduction in body weight with a weight loss of $3 six kilograms with.
Martin: With anguish, Emma compared with a free two kilogram weight gain with the Paisley.
With the insulin basal bolus treatment.
Martin: The estimated treatment difference was $6 seven kilograms.
Martin: I presume also showed superiority over haynesville enlarging your 100 together with the instrument that spot in terms of severe a clinically significant significant hypoglycemic events.
With only <unk> two six events per patient years of exposure compared to 2.18 events per patients yet of the Scotia in the basal bolus treatment.
Martin: All I can say I'm appear to have a safe and well tolerated profile.
These phase III results by once weekly Microsemi are very promising.
Martin: For people with poor poorly control type two diabetes on basal insulin.
Martin: <unk> has the potential to streamline instrument extensification by addressing the main patient barriers.
Martin: Ip's Emma sets, a new standard for once weekly treatment.
Martin: By reducing the annual injections from around 1450.
Martin: 252 injections.
Martin: This substantial reduction in patient burden is provided together with a strong glycemic control.
Martin: Trouble weight management, and importantly, a factor of 10 times the oil rates of hypoglycemia.
Martin: As compared to the current gold standard of insulin basal bolus treatment.
Speaker Change: Please turn to the next slide.
Speaker Change: Turning to the upcoming R&D milestones there are many exciting trial results in 2024.
Speaker Change: However.
Speaker Change: Before I get to that I would like to highlight a few.
Speaker Change: All of the milestones from the fourth quarter of 2023.
Speaker Change: Within obesity, we have successful successfully completed two phase III studies with magnetar, two four milligram addressing obesity related comorbidities as well as the phase one trial for all them accretive.
Firstly step nine trial was a phase III knee osteoarthritis trial that investigated.
Speaker Change: <unk> 2.4 milligram once weekly on.
Speaker Change: On the co primary endpoints of body weight, and the Western Ontario, and Mcmaster investors. Arthur also have tried this index.
Abbreviated Womack.
Speaker Change: This is a self administered measurement used in assessing pain and functional.
Speaker Change: In the trial for.
Speaker Change: 400 to seven people with obesity and mild to moderate knee osteoarthritis, where invoke the.
Speaker Change: The study achieved its primary endpoint by demonstrating a superior reduction in both the WOMAC pain score as well as in body weight with magnetek, two four milligram compared to placebo.
Speaker Change: The estimated reduction in Mi WOMAC pain score from baseline to week 68.
Speaker Change: Was 41 seven was amendments at 2.4 milligram and 27.5 with placebo.
Speaker Change: The estimated treatment difference was 14.1.
Speaker Change: Which was not only statistically significant but also considered clinically very relevant.
Speaker Change: The final results will serve as the foundation for potential outcomes clients with future obese Genesis.
Speaker Change: In addition, we have successfully completed the step hip hip diabetes trial.
Speaker Change: This debt preferred diabetes trials investigated impact of treatment on Fisher functions at.
Speaker Change: That symptoms in patients with obesity type two diabetes and established heart failure.
Speaker Change: In total 660 <unk> enrolled in this study.
Speaker Change: The co primary endpoints were the average change from baseline in the Kansas City Cardiomyopathy clinical summary, skull questionnaire and body weight in.
Speaker Change: In the trials that showed a 13.7 points improvement versus six point full in the placebo arm at 52 weeks.
Speaker Change: The main change was 7.3 punch in favor of cement.
Speaker Change: Which is considered clinically very relevant.
Speaker Change: And a very solid results with quality coffee.
Speaker Change: A superior reduction in body weight was also observed for <unk> four milligram versus placebo.
Speaker Change: We've submitted the results from the step have Pip obesity trial as well as the type two diabetes trial for regulatory revenue in U S and Europe. During the course of January of 'twenty four.
Speaker Change: This marks another milestone in our ongoing efforts to address the unmet medical needs in patients with overweight and obesity and established cardiovascular disease.
Speaker Change: The last highlight for.
Speaker Change: For the fourth quarter of 2023 is the successful completion of all an increase in phase one.
Speaker Change: Yeah.
Speaker Change: This trial appeared to have a safe and well tolerated weighted profile for <unk>.
Speaker Change: We have decided in September of 2020 free to also initiate a phase one trial with once weekly subcutaneous <unk>.
Speaker Change: And further we expect to advance <unk>.
Speaker Change: <unk> into further clinical development.
Speaker Change: Moving forward to 2020 volt within diabetes can we expect a decision on approval of incident I predict.
Speaker Change: Europe, Japan, China as well as the U S. During the second half of 2024.
Speaker Change: We're also anticipating the exciting results of a combined one and combine two from the IP semi development program during the initial half of 2024.
Of note, we're expecting the phase one results of the once weekly <unk> in the first half of 'twenty four.
Speaker Change: And we are further initiated a phase one trial with once monthly <unk> during the course of January of 'twenty.
Speaker Change: We continue to build evidence for this type of molecule within diabetes as well plus.
Speaker Change: For subcutaneous Americans had 1.0 milligram, we anticipate the readout of flow for people with type two diabetes and chronic kidney disease in the first half of this year.
Operator: Good day, and thank you for standing by. Welcome to the Novo Nordisk Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Speaker Change: This will be followed by the functional outcomes trial stride for people with type two diabetes and peripheral artery disease in the second half of 2024.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. You will then hear an automated message advising you to withdraw your question.
Speaker Change: As far as the Medicaid.
Speaker Change: Cardiovascular.
Outcome study showed is expected to be completed in the second half of 2024.
Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Daniel Bassen, CBP Investor Relations. Please go ahead.
Speaker Change: This is a gating some bandwidth that in people with diabetes and cardiovascular disease.
Speaker Change: And the obese area, we expect an FDA decision on the approval of the select data submission in the first half of 'twenty four.
Daniel Musmann-Bosen: Welcome to this Novo Nordisk earnings call for the full year of 2023 and the outlook for 2024. My name is Daniel Musmann-Bosen, and I'm the head of investor relations at Novo Nordisk. With me today, I have the CEO of Novo Nordisk, Lars-Burghard Jrgensen, executive vice president and head of commercial strategy and corporate affairs, Camilla Sylvester, executive vice president and head of North America operations, Doc Lange, executive vice president and head of development, Martin Holtz Lange, and finally, chief financial officer Karsten Munk Knudsen. All speakers will be available for the Q&
Speaker Change: Furthermore, we look forward to the first phase III readout.
Speaker Change: Towards the turn of the year.
Speaker Change: And as a last highlight we are very excited about the upcoming readout of my mates history in the first half of 2020 at Miami.
Speaker Change: <unk> is a novel next generation factor eight my bad my medic antibody.
Speaker Change: With potential for improved patient outcomes and reduce burden of treatment in people with hemophilia a.
Speaker Change: With that over to a new customer.
Speaker Change: Thank you Martin.
Daniel Musmann-Bosen: Today's announcement and the slides for this call are available on our website, novonordisk.com. Please note that this call was webcast live, and a recording will be made available on our website as well. The call is scheduled to last one hour.
Speaker Change: Please turn to the next slide.
Speaker Change: Entrenched registry, our sales grew by 31% in Danish krone, and 36% at constant exchange rates driven by both operating units the.
Daniel Musmann-Bosen: Please turn to the next slide. The presentation is struck out as outlined on slide two. Please note that all sales and operating profit growth statements will be at a constant exchange rate unless otherwise specified. Please turn to slide three. We need to advise you that this call will contain forward-looking statements, which are subject to risk and uncertainty that could cause actual results to differ materially from expectations.
Speaker Change: Gross margin increased to 84, 6% compared to 83, 9% in 2022.
Speaker Change: Driven by a positive product mix following increased sales of injectable tier one based treatments.
Speaker Change: Costs related to ongoing capacity expansions and negative currency impact and lower realized prices, mainly in the U S and region, China, partially offset these effects.
Daniel Musmann-Bosen: For further information on the risk factors, please see the company announcement for the full year 2023 and the slides prepared for this presentation. With this, I give you last one update on our strategic aspirations. Thank you, Daniel.
Speaker Change: Central distribution costs increased by 23% in Danish kroner.
Speaker Change: By 26% at constant exchange rates, the increase was driven by both operating units.
Speaker Change: In North America operations cost increase is driven by the relaunch of the Kobe and promotional activities for <unk>, while in international operations cost increase is driven by promotional activities for <unk> as well as obesity care market development activities.
Lars-Burghard Jørgensen: Please turn to the next slide. In 2023, we will deliver W2C and operating profit growth, and we will continue to make progress on our strategic aspirations. I'll walk you through the performance highlights before handing over the words to my colleagues.
Lars-Burghard Jørgensen: We continue making progress on purpose and sustainability for carbon emissions; our carbon emissions decreased by 34% compared to pre-pandemic levels in 2019, and in 2023, we reached more than 40 million patients without diabetes and obesity treatment. To uphold our commitment to being a sustainable employer, we expanded the number of women in senior leadership positions to 41% compared to 39% at the end of 2022. In the past year, we have developed and expanded our pipeline across all our therapies. For diabetes and obesity, we have seen several exciting trial readouts, and we have advanced novel acids into phase 3.
Furthermore, the increase in sales and distribution costs impacted by adjustments to legal provisions.
Speaker Change: Research and development costs increased by 35% mess up in Danish krone, and 37% at constant exchange rates.
Speaker Change: The increase reflects our strategic objective to expand the pipeline across therapy areas.
Speaker Change: Specifically, we continue to increase late stage clinical trial and early research activities.
Speaker Change: They are consistent of former therapeutics and <unk> and in Massawa pharma also increased R&D spending.
Speaker Change: Administration costs increased by 9% measured in Danish kroner and by 11.
Speaker Change: At constant exchange rates.
Lars-Burghard Jørgensen: We have also expanded our footprint in cardiovascular disease and strengthened our late-stage pipeline in rare blood disorders. Martin will come back to this and our overall R&D milestones later. In 2023, we achieved two major milestones within commercial execution. We reached our obesity sales operation of more than 25 billion Danish kroner and our aspiration for diabetes, which was to achieve one third of the global diabetes value market. Going forward, we continue to aim at treating more patients with our innovative treatment. Lastly, we're very pleased with a strong sales growth of 36% and operating profit growth of 44% in 2023. Both of them measured a constant exchange rate.
Speaker Change: Operating profit increased by 37% measured in Danish krone, and by 44% at constant exchange rates, reflecting the sales growth.
Speaker Change: Net financial items showed a gain of 2.1 billion Danish kroner compared to a net loss of around $5 7 billion in <unk> corner last year.
Speaker Change: The effective tax rate is 21% and transparent free compared to 19 point Chris.
Speaker Change: Slide 22.
Speaker Change: Consequently, net profit increased by 51% and diluted earnings per share increased by 52% to 18 krone and 62.
Speaker Change: Free cash flow realized and transparent street was $68 3 billion Danish kroner compared with 57 four.
Camilla Sylvester: Now I would like to hand over the word to Camilla, who will give us the latest update on our commercial execution. Thank you, Lars, and please turn to the next slide. In 2023, our total sales increased by 36 percent. The sales growth was driven by both operating units, with North America operations growing 54 percent and international operations growing 15 percent. Our GLP-1 sales in diabetes increased 52%, driven by North America growing 52% and international operations growing 53%. Insulin sales decreased by 6%, driven by declining sales in the U.S. and China.
Speaker Change: 4 billion in <unk> 'twenty to.
Speaker Change: This is in line with our strategic aspiration to deliver attractive kept sort of accretion to shareholders.
Speaker Change: The cash conversion in <unk> was positively impacted by timing of payment of rebates in the U S.
Speaker Change: And provisions related to the revised 340 P distribution policy also in the U S.
Speaker Change: Capital expenditures for property plant and equipment was $25 8 billion Danish kroner, compared with $12 1 billion in 2022.
Speaker Change: This primarily reflects investments in additional capacity for active pharmaceutical.
Camilla Sylvester: Obesity care sales grew 154%. In international operations, sales grew 47%, driven by both TaxSender and WeGoWePay. Sales of Saxenda increased by 14%, and sales of Vigovi reached around 2 billion Danish kroner.
Speaker Change: <unk> production and for finished capacity for both current and future <unk>.
Speaker Change: <unk> and <unk> products. Please go to the next slide.
Speaker Change: Interest rates fall, we expect to increase our capital expenditure to around 45 billion Danish kroner.
Camilla Sylvester: Going forward, we continue to roll out Vigovi in a sustainable manner by volume cap launches to balance supply and demand. In North America operations, obesity care sales grew 212%. Total rare disease sales decreased by 15%, which was driven by a 24% decrease in international operations and by a 1% decrease in North American operations, following a reduction in supply of Nordic soap.
Speaker Change: The significant step up compared to 2023 reflects the expansion of our supply chain.
Speaker Change: This includes the previously communicated expansions of manufacturing facilities and current bulk and located in Denmark and shocks us based in France.
Speaker Change: The increase in capital expenditure and transparency for mainly relates to investments in additional capacity for active come through ingredient production and finished capacity for both current and future injectable and oral products across our strategic therapy areas.
Camilla Sylvester: Please turn to the next slide. With 29% sales growth in diabetes care, we are growing faster than the total diabetes market. As a result, our global diabetes value market share increased to 33.8 percent, which is above our strategic aspiration of reaching one-third of the global diabetes value market. This increase reflects market share gains in both North America operations and international operations.
Speaker Change: In the coming years, the capital expenditure sales ratio is still expected to be low double digits next.
Speaker Change: Next slide please.
Speaker Change: Yeah.
Speaker Change: In line with our strategic aspiration to deliver attractive kept circulated to shareholders. We have returned more than 61 7 billion Danish kroner to shareholders via share buybacks and dividends during <unk>.
Camilla Sylvester: In international operations, total diabetes care sales increased by 20% in 2023, which was primarily driven by GLP-1 sales growing 53%. Nuvonorisk is the market leader in international operations with a GLP-1 value market share over 70%. The FEMPEG continues its DLP-1 market leadership with 47.5% market share.
Speaker Change: At the end of General meeting on March 21st transparency for the board of Directors will propose a final dividend of six kronor.
44 children twice street dividend of nine kroner, and 40 area, including the interim dividend paid in August.
Speaker Change: Three.
Doc Lange: Rebeltus has just shy of a 14% value market share driven by solid uptake across geographies. And with that, I will hand over the word to Doc. Thank you, Camilla. Please turn to the next slide.
Speaker Change: This is a 50% increase compared to 2022, making it the eighth consecutive year with increasing dividend per share.
Speaker Change: In addition in addition to the dividend.
Speaker Change: 30 billion Danish kroner chatbot back for the past 12 months has been contributors.
Doc Lange: In the U.S., sales growth of our GLP-1 diabetes treatments is driven by a 50 percent expansion of the market in 2023 versus 2022. In the fourth quarter of 2023, the prescription volume growth of the GLP-1 class was more than 30% compared to the fourth quarter of 2022. Measured on total prescriptions, Nova Nordisk continues to be the market leader with around 54 percent market share. Please go to the next slide. Obesity care sales grew by 154%, driven by both operating units.
Speaker Change: For triage stretch for the board of Directors has approved a new share repurchase program.
Speaker Change: <unk> dk to be executed during the coming 12 months.
Speaker Change: Next slide please.
We continue.
Speaker Change: We continue the growth momentum interests transform and expect the sales growth to be between 18 and 26% at constant exchange rates.
Speaker Change: This is based on several assumptions as described in the company's announcements.
Speaker Change: The guidance reflects expectations for sales growth in both North America operations and international operations.
Speaker Change: The sales growth is expected to be mainly driven by volume growth of tier one based treatment for obesity and diabetes care.
With the expectation of continued volume growth and capacity limitations.
Doc Lange: The volume growth of the global branded obesity market more than doubled, with volume growth of 116%. In international operations, obesity care sales are driven by a strong SAC Senate performance, and there will be launches in seven international operation countries. In the U.S., sales of Volgovy grew by 393 percent, reflecting the commercial relaunch in January of 2023.
Speaker Change: Outlook also reflects expected continued periodic supply constraints and related drug shortage notifications across a number of products and geographies.
Speaker Change: We expect that operating profit will grow between 'twenty, one and 29% at constant exchange rates. This primarily reflects the sales growth outlook and continued investments in future and current growth drivers within research development and commercial.
Speaker Change: Our reported sales are expected to be one percentage point lower at constant exchange rates.
And operating profit is expected to be.
Speaker Change: Two percentage points lower than at constant exchange rates.
Doc Lange: To safeguard continuity of care, we reduced the release of lower dose strengths back in May of 2023, which continued throughout the remainder of last year. I am very pleased to state that we are now enabling more U.S. patients to initiate treatment by more than doubling the amount of the lower-dose strength of Wgovi compared to the previous. We will gradually be increasing the overall supply throughout the remainder of 2025. Please go to the next slide. Our rare disease sales decreased by 15%. The sales decrease was driven by a 1% sales decline in North America operations and a 24% sales decline in international operations.
Speaker Change: For 'twenty four we expect net financial items to amount to a gain around one.
Speaker Change: One country billion Danish kroner. This mainly reflects gains associated recurring exchange hedging contracts as well as interest rate.
Speaker Change: Great gains from cash and marketable securities.
Speaker Change: The free cash flow is expected to be.
Speaker Change: Between 64.
Speaker Change: 74 billion Danish kroner, reflecting the sales growth.
Speaker Change: Impact from rebates in the U S countered by investments and capital expenditure.
Speaker Change: That covers the outlook for it.
Speaker Change: 24, now back to you loss.
Loss: Thank you Carsten, please turn to the find slides.
Loss: We are very pleased with our strong performance in 2023, which reflects that more than 40 million people are now benefiting from our innovative diabetes and obesity treatments, we continue to make progress on our strategic aspirations.
Martin Holtz Lange: Sales of rare blood disorders increased by 3 percent, driven by the launch products in hemophilia A and B and partially countered by NOVO7. Sales of our rare endocrine disorder products decreased by 47 percent, reflecting a reduction in manufacturing output. Now, Martin, over to you for an update on R&D. Thank you, Doc. Please turn to the next slide.
Loss: In 2004, our focus would be on the continued significant expansion of our production capacity, reaching more patients and are progressing the expanding pipeline.
Martin Holtz Lange: First, I'm very pleased to share the exciting headline results from the combined pre-trial with once-weekly IQOSEMA. Combination 3 was a 52-week open-label, treat-to-target phase 3 trial comparing once-weekly Igusema with once-daily insulin-gladen U100, together with up to four daily injections of insulin aspart. This is also called basal-bonus insulin treatment. The objective of Combined Training was to assess the efficacy and safety of once-weekly Igloosema in people with type 2 diabetes poorly controlled on daily baseline.
Loss: With that I would like to hand, the word back to Daniel.
Daniel: Thank you Lasse next slide please.
Daniel: With that we're now ready for the Q&A, where candy asked all of all participants to limit hurt himself to one or maximum two questions. This includes sub questions.
Speaker Change: Operator, we're now ready to take the first question.
Speaker Change: Thank you.
Speaker Change: A reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced two.
Speaker Change: <unk>. Your question. Please press star one again.
Martin Holtz Lange: The trial achieved its primary endpoint of demonstrating non-inferiority in reducing A1c at week 52 with 1-sweeky icosema compared to insulin-enlarged U100 together with insulin-ASPAR. From an overall A1C baseline of 8.3%, once-weekly IQOSEMA achieved an estimated reduction in HbA1c of 1.47 percentage points, compared with 1.40 percentage points for insulin enlargement together People in the trial had a baseline body weight of 85.8 kilograms. Treatment with Icosemma achieved a superior reduction in body weight with a weight loss of 3.6 kg with Icosemma compared with a 3.2 kg weight gain with the insulin-basal bolus. The estimated treatment difference was 6.7 kilograms.
Speaker Change: We will now take the first question.
Speaker Change: One moment please.
Speaker Change: And the first question comes from the line of Mike <unk> from TD Cowen. Please go ahead.
Mike: Thank you for the questions I have two for Martin.
Mike: First is on the <unk> <unk> dual agonist as it relates to the clinical profile of a once monthly injection. It seems to me that navigating Gi toxicity during the titration phase with a drug that's onboard for an entire month could be tricky do you think that the valid concern and if so might it undercut to some extent the convenience.
Mike: Vantage.
Mike: And then my second question is on oral and accretion can you provide.
Mike: Any insight into the efficacy you saw in the phase one trial, a reasonable ambition would be for weight loss. It approaches that delivered by CAGR stem up but via the oral route how close did you get to that profile.
Martin Holtz Lange: Icosemma also showed superiority over insulin-Guardian U100 together with insulin-ASPART in terms of severe or clinically significant hyperglycemic events, with only 0.26 events per patient year of exposure compared to 2.18 events per patient year of exposure in the basal bonus treatment. Overall, IQSEMA appears to have a safe and well-tolerated profile. These phase three results for once-weekly IQSEMA are very promising. For people with poorly controlled type 2 diabetes on basal insulin, Igloosema has the potential to streamline insulin detoxification by addressing the main patient barriers.
Speaker Change: Thank you, Mike and Martin over to you.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Thank you for those questions.
First of all on the on the.
Speaker Change: Once monthly <unk>.
Honestly speaking, we asked ourselves the same questions when we move from one stage two two to.
Speaker Change: Once weekly.
Speaker Change: And this is all.
Speaker Change: Yeah.
Speaker Change: The focus of titration, so proper titration will mitigate most Gi tolerability side effects.
Speaker Change: And therefore.
Speaker Change: We're quite confident that we can manage.
Speaker Change: Once monthly in that setting we actually didn't see an increase moving from one state to once weekly and we don't expect to see that moving from one to.
Martin Holtz Lange: Ibozema sets a new standard for once-weekly treatment by reducing the annual injections from around 1,450 to 52 injections. This substantial reduction in patient burden is provided together with strong glycemic control, proper weight management, and importantly, a factor of 10 times lower rates of hypoglycemia as compared to the current gold standard of insulin-basal. Please turn to the next slide. Turning to the upcoming R&D milestones, there are many exciting trial results in 2024. However, before I get to that, I would like to highlight a few of the milestones from the fourth quarter of 2020. With obesity, we have successfully completed two phase three studies with a magnetite 2.4 milligram addressing obesity-related comorbidities, as well as the Phase I trial for all emigrants.
Speaker Change: One two months.
Speaker Change: On the <unk>, where we're not disclosing phase one data, but you should obviously read into the fact that we are stating that we are progressing further development, which also means that we believe <unk> to be properly.
Speaker Change: Differentiated to whatever else is out there.
Speaker Change: Thank you Mike for the question. Thanks, both being up early next question. Please thank you.
Speaker Change: We will now take the next question.
Speaker Change: One moment please.
Speaker Change: The next question comes from line of Peter <unk> from Citigroup. Please go ahead.
Peter: Yes, Thanks people don't Citi two questions. Please.
Peter: Or custom you've mentioned many times no variable management is number one priority is scaling supply and that's what I'm trying to marry that.
Peter: With the comments you provided for 24 in guidance I mean, if I just annualize.
Peter: Exit run rate Q4 2023.
Peter: Pretty much around the bottom end of 2020 full guidance I realize there's FX and is rebated to consider but I didn't want to push my luck and try and get a handle how significantly compressed due to increase in 2024.
Martin Holtz Lange: First, the STEP-9 trial was a phase-3 knee osteoarthritis trial that investigated the effects of somatoside 2.4 mg once weekly on the co-primary endpoints of body weight and the Western Ontario and McMaster Universities Osteoarthritis Index, abbreviated WOMAX. This is a self-administered measurement used in assessing pain and functionality. In the trial, 407 people with obesity and mild The study achieved its co-primary endpoint by demonstrating a superior reduction in both the Womack pain score as well as in body weight with a magnetite 2.4 mg compared to. The estimated reduction in mean WOMAC pain score from baseline to WIN68 was 41.7 with a magnified 2.4 mg and 27.5 with a control. The estimated treatment difference was 14.1, which was not only statistically significant but also considered clinically very relevant.
Peter: In light of select coming on the label this year and likely increasing demand further and then secondly, the constant just a quick.
Peter: On the revenue recognition from 340, B pharmacies I know you're currently only partially.
Peter: Revenue recognized and Thats whats baked into guidance, but I thought there was a chance that could change in 2023.
Peter: Given that you had prevailed in litigation with HHS. So is could there be any change in your in your styles from $3 3 billion 24 and am I right.
Peter: What are you to fully revenue recognize that could actually have quite a meaningful uplift to novo earnings were around 5%. Thank you. Thank.
Thank you Pete casting two questions for you.
Speaker Change: Yeah. So so first as to our 2024 guidance then.
Speaker Change: And the important point is that we are continuing the growth trajectory.
Speaker Change: We showed already in <unk>.
Pete: And just to remind you, it's 36% sales growth, adding to the tune of 5 million people on the <unk> products or 12 month periods. So we do believe that that's a that's significant scaling and in round numbers were talking about that magnitude when you look at that.
Pete: Going into next year. So it's a similar type scaling will be doing in slide 24.
Martin Holtz Lange: The trial results will serve as a foundation for potential outcomes trials with future obesity. In addition, we have successfully completed the STEP-HEF-HEF diabetes trial. The STEP-PF-F diabetes trial investigated the impact of somatic type treatment on physical and symptoms in patients with obesity, type 2 diabetes, and established heart disease. In total, 660 people were enrolled in the study.
I don't like are necessarily the logic between the multiplying to fall by five by four because we were in a chronic disease business. So so all the ups and downs of currencies in inventory.
Pete: One quarter makes it makes it dangerous to annualize just just based on on three months, so but again the growth platforms remains the same it's a rebalancing.
Pete: And it'll be Colby and and we're scaling those all of those three platforms, which is what gives us.
Pete: The guidance that we've.
Martin Holtz Lange: The co-primary endpoints were the average change from baseline in the cancer city cardiomyopathy clinical summary score questionnaire and body weight. In the trials, the magnified showed a 13.7 points improvement versus 6.4 in the placebo arm at 52 weeks. The mean change was 7.3 points in favor of somalicide, which is considered clinically very relevant and very solid results with chronic use. A superior reduction in body weight was also observed for cementite 2.4 milligram versus, We've submitted the results from the STEP-HEF-PEF obesity trial, as well as the CHI-2 diabetes trial, for regulatory review in the U.S. and Europe during the course of January of 2020.
Pete: Provided ste.
Pete: And then as to treat <unk>.
Pete: Yeah.
You're right, it's a mistake.
Pete: Only partially recognizing a three four.
Pete: Revenue and that's linked to the accounting stand that's offset in order to recognize revenue it has to be.
Pete: What the accountants are the autos call highly profitable.
Pete: So that's the backdrop it behind that and yes, we prevail in our case it back in January.
Pete: 'twenty three that's still.
Pete: Two cases outstanding in different jurisdictions around the same question. So so that would be key informative points for us to decide on the how how to proceed forward vis vis constant recognition in this space.
Speaker Change: Thank you Pete Thank you Kirsten and next question. Please.
Martin Holtz Lange: This marks another milestone in our ongoing efforts to address the unmet medical needs in patients with overweight, obesity, and established cardiovascular disease. The last highlight for the fourth quarter of 2023 is the successful completion of all amicretan phase one. This trial appeared to have a safe and well-traveled profile for immigrants.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: We will now take the next question.
One moment please.
Speaker Change: The next question comes from the line of Louise Chen from Cantor. Please go ahead.
Louise Chen: Hi, Thank you for taking my question. So my first question is how do you think about the launch at Lilly that found in your guidance for 2024, and then second question is when do you expect to report data from your Nash or Nash studies, such as your asset study area of FGF 21. Thank you.
Martin Holtz Lange: We have decided in September of 2023 to also initiate a phase one trial with one 3D subcutaneous amicrete. And further, we expect to advance hemocretin into further clinical development. Moving forward to 2024, within diabetes care, we expect a decision on approval of insulin and Igloodex in Europe, Japan, China, as well as the U.S. during the second half of 2025.
Speaker Change: Thank you Luis Gaston I'll give the first to you with guidance and then Matson later you on mesh.
Luis Gaston: Yeah. So so as always when one forecasting it then we.
Luis Gaston: We take into account demand in the market competition and supply capacity. So those factors are what weighed into guidance.
Martin Holtz Lange: We are also anticipating the exciting results of Combine 1 and Combine 2 from the ICO-CEMET Development Programme during the initial half of 2021. Of note, we are expecting the Phase I results of the once-weekly GLP-1-GIP in the first half of 2024, and we have further initiated a Phase I trial with once-monthly GLP-1-GIP during the course of January of 2014.
Luis Gaston: Both interim software.
Luis Gaston: The environment in the U S or to maintain a high degree of formulary access with the.
Luis Gaston: P P M basis.
Luis Gaston: And then on the volume basis, I would say that is more a question about supply capacity since we're not.
Luis Gaston: <unk> for sure given the magnitude of the markets.
Luis Gaston: Thank you costs in the north to Matson.
Speaker Change: Thank you very much.
Speaker Change: So so far the asthma Nash study, we expect to see a readout around the turn of this year.
Martin Holtz Lange: Thank you. Thank you. We continue to build evidence for the semaglutide molecule within diabetes.
Then progressed towards a regulatory filing.
Speaker Change: If just 21 study is a phase II trial actually also investigating.
Martin Holtz Lange: For subcutaneous semaglutide 1.0 milligram, we anticipate the readout of flow for people with type 2 diabetes and chronic kidney disease in the first half of this year. This will be followed by the Functional Outcomes Trial, STRIDE, for people with type 2 diabetes and peripheral arthritis in the second half of 2020. As far as magnetite is concerned, the cardiovascular outcome study shown is expected to be completed in the second half of 2024, this indicating semaglutide in people with diabetes and hydrovascular disease. In the obesity area, we expect an FDA decision on the approval of the select data submission in the first half of 2020. Furthermore, we look forward to the first phase 3 readout for Cagliostema towards the turn of the year. And, as a final highlight, we're very excited about the upcoming readout of My Matrix 3 in the first half of 2020. Mimate is a novel next-generation factor VIII mimetic antibody with the potential for improved patient outcomes and reduced burden of treatment in people with hemophilia.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: And we'll see that read out a little bit later.
Speaker Change: Thank you Martin and we're ready for the next question.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: One moment please.
Speaker Change: And the next question comes from the line of such.
Speaker Change: Kim Jang from Bank of America. Please go ahead.
Kim Jang: Thanks for your question Sachin Jain from Bank of America, Firstly, just on <unk>.
Kim Jang: Martin the plan's progress your commentary.
Kim Jang: Very vague, particularly for the oral formulation.
Kim Jang: So we're not going to just asked you why you were being vague and the factors that go into that decision one would assume an oral kangri standard would be exciting for one so just what are you waiting for.
Speaker Change: And then the second question on supply and thank you for the color on doubling of the lower doses, where we gave you in the coming months should I assume this ability to further supply at a lower dose for a doubling of limit affiliate 24. Thank you.
Speaker Change: Thank you Sachin so much in the first to you and then the cost and you'll take the supply question.
So thank you very much.
I'm not sure I'm being vague.
Karsten Munk Knudsen: With that, over to you. Thank you, Martin. Please turn to the next slide.
Speaker Change: Saying that we're not communicating phase one data.
Speaker Change: You will hear or see a L O.
Karsten Munk Knudsen: In 2023, our sales grew by 31% in Danish kroner and 36% at constant exchange rates, driven by both operating units. The gross margin increased to 84.6% compared to 83.9% in 2022, driven by a positive product mix following increased sales of injectable TH1-based treatments. Costs related to ongoing capacity expansions and a negative currency impact and lower realized prices, mainly in the U.S. and in the region of China, partially offset these. Sales and distribution costs increased by 23% in Danish kroner and by 26% at constant exchange rates.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Should the data confirm it post the subcutaneous but also potentially.
Speaker Change: <unk>.
The reason why we are pursuing both.
Speaker Change: In phase one is obviously, providing option as we see a big demand.
Speaker Change: And we need to provide flexibility and optionality, having both an oral and subcutaneous is providing that.
Speaker Change: When it comes to the efficacy.
Speaker Change: You've heard us say, a number of times and we will stay with that.
Speaker Change: We want to see differentiated products and that goes for both the subcutaneous and you all.
Speaker Change: In the marketplace and what we have seen so far.
Speaker Change: I am a cretin brings to us a confidence that Emma treatment in both oral and subcutaneous when we see the data has that potential.
Speaker Change: Yes.
Speaker Change: And thank you for this question. So so it should be a little bit more more precise vis vis the kobe than what.
Karsten Munk Knudsen: The increase is driven by both operating units. In North America, the operational cost increase is driven by the relaunch of Vigovi and promotional activities for OCEANPIC, while in international operations, the cost increase is driven by promotional activities for Rebelsis, as well as obesity care and market development activities. Furthermore, the increase in sales and distribution costs is impacted by adjustments to legal provisions.
Speaker Change: What we have done is that we have increased our supply to start off by more than double so that has taken place and as we have also previously communicated then we will continue to gradually expand our supply of started doses as well as auto shrinks and.
Speaker Change: Greg just scale that as we're scaling our supply capacity. So we have a sustainable supply chain in place, including the necessary inventory to avoid the stop go patent.
Karsten Munk Knudsen: Research and development costs increased by 35% measured in Danish kroner and 37% at the concept exchange rate. The increase reflects our strategic objective to expand the pipeline across therapy areas. Specifically, we continue to increase late-stage clinical trial and early research activities. The acquisition of former therapeutics in 2022 and Inversargo Pharma also increased R&D spending. Administration costs increased by 9% measured in Danish kroner and by 11% at constant exchange rates. Operating profit increased by 37% measured in Danish kroner and by 44% at constant exchange rates, reflecting the sales growth. Net financial items showed a gain of 2.1 billion Danish kroner compared to a net loss of around 5.7 billion Danish kroner last year.
Speaker Change: As shown in the past.
Speaker Change: Thank you for the question.
Speaker Change: We're ready for the next set of questions.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: And the next question comes from the line of Martin Parkway from Seb. Please go ahead.
Martin Parkway: Great. Thank you very much two questions firstly on the retail development.
Martin Parkway: Sure.
Martin Parkway: Big imbalance this year at least.
Martin Parkway: Especially in fourth quarter between North America and.
Speaker Change: And so NASA operations.
Speaker Change: How should we see that in going into 2024.
Speaker Change: I noticed they took it.
Speaker Change: Precise numbers, but just some words combat in relation to the guidance that you have and then a second question you are doing some reprivatization among other things.
Speaker Change: Removing liberum here from the U S market.
Speaker Change: How far can you actually go and how cynical can you be to two prior so it's less on instrument of course more of your production capacity on the California franchise.
Karsten Munk Knudsen: The effective tax rate is 20.1% in 2023 compared to 19.6% in 2022. Consequently, net profit increased by 51%, and diluted earnings per share increased by 52% to 18.62 kroner. The precast flow realized in 2023 was 68.3 billion Danish kroner compared with 57.4 billion in 2022. This is in line with the strategic aspiration to deliver attractive capsule allocations to shareholders. The cash conversion in 2023 was positively impacted by the timing of payment of rebates in the US and provisions related to the revised 340B distribution policy in the US. Capital expenditure for property planning equipment was 25.8 billion Danish kroner compared with 12.1 billion in 2022.
Speaker Change: Thank you Martin cast and the first question related to the guidance on regional and then data last year about the portfolio transfer stations.
Speaker Change: So as so as to the the regional dynamics.
Speaker Change: These are classic dynamics.
Speaker Change: When when people ask yourselves have followed the company for an extended period of time. They then then there will be this.
Speaker Change: The type of seasonality. So then talking <unk> 24.
Speaker Change: The growth drivers remain the same again rebellious go via <unk>.
Speaker Change: And to simply and the real difference is.
Speaker Change: So I'm trying to trade street is actually that that answer each one in diabetes. The growth levels were similar just north of 50% both in I O and North America. So so the fundamental difference is the pace of the global Rollouts and the and of course, the North America.
Speaker Change: Our rolling ahead of Io, but it is important to note that we will be launching in additional markets in the volume pathway for the Kobe and into 2024, but you should expect the North America still to be growing at a higher pace on Io.
Karsten Munk Knudsen: This primarily reflects investments in additional capacity for active pharmaceutical ingredient production and finished capacity for both current and future injectable and oil products. Please go to the next slide. In 2024, we expect to increase our capital expenditure to around 45 billion Danish kroner. This significant step up compared to 2023 reflects the expansion of our supply chain. This includes the previously communicated expansions of manufacturing facilities in Kallenborg and Hillerd, located in Denmark, and charters based in France. The increase in capsule expenditure in 2024 mainly relates to investments in additional capacity for active pharmaceutical ingredient production and finished capacity for both current and future injectable and oil products across our strategic therapy areas. In the coming years, the capital expenditure to sales ratio is still expected to be low double digits.
Speaker Change: Thank you Kathy lots of what you think of items on portfolio optimization.
Kathy: I think you should.
Kathy: So see us as being committed to people living with diabetes and Nida offer of insulin when we look at EMEA specifically in the U S. We have a situation where we we have <unk>.
Kathy: Placebo as well we will be launching.
Kathy: Our weekly a weekly insulin and we also see a dynamics, where we have lost a contract.
Kathy: So for us to stay committed to a patient who is also a leading to Austin thinking carefully about what are the most optimal ways of treating those patients with the most efficacious products that aren't yet, but one that's also the optimization and moving patients from daily treatment to weekly treatments, where you'll get.
Kathy: You can see and obviously.
Kathy: To produce presentation as you as you reduce the number of.
Kathy: Injections and presentations needed. So so we're going to be having a social responsibility vis vis the patients while still optimizing to a degree where it both benefit patients and our ability to scale.
Speaker Change: Thank you last thank you Martin So we'll take the next question.
Speaker Change: Thank you.
Karsten Munk Knudsen: Next slide. In line with our strategic aspiration to deliver attractive capital allocation to shareholders, we have returned more than 61.7 billion Danish kroner to shareholders via share buybacks and dividends during 2023. At the Annual General Meeting on March the 21st of 2024, the Board of Directors will propose a final dividend of 6 kroner and 40 euros for a total 2023 dividend of 9 kroner and 40 euros, including the interim dividends paid in August of 2023. This is over a 50% increase compared to 2022, making it the 28th consecutive year with increasing dividend per share. In addition to the dividends, a 30 billion Danish kroner share buyback for the past four months has been completed.
Speaker Change: One moment please.
Speaker Change: Okay.
Speaker Change: The next question comes from the line of Richard Vasa from Jpmorgan. Please go ahead.
Richard Vosser: Hi, Thanks for taking my question.
Richard Vosser: Two questions. Please first question just could you update us on the payer discussions around select and how you see rebate pressure in 2004 for the BDC franchise, given it still supply constrained, particularly in the U S.
Richard Vosser: And the second question I would say thinking about diabetes, we've seen.
Richard Vosser: Consistent sort of 10% to 15% rebate pressure in the U S around does that right balance season and in the type two side.
Richard Vosser: Is that how we should think about the pressure going into 'twenty four thanks very much.
Thank you Richard and their talk I'll give the word to you for select payer discussions what you can say and then also the competitive dynamics.
Speaker Change: Yes. Thank you for the question Richard really appreciate it so just to reiterate we're super excited about the potential of select data and we do eagerly await the whole full label update in the coming months and we're doing our normal preparation for that.
Karsten Munk Knudsen: For 2024, the Board of Directors has approved a new share repurchase program of up to 20 million DKK to be executed during the coming 12 months. Next slide, please. We continue the growth momentum in 2024 and expect the sales growth to be between 18 and 26% at contract exchange rates. This is based on several assumptions as described in the company announcement. The guidance reflects expectations for sales growth in both North America operations and international operations.
Speaker Change: We think about.
Speaker Change: What that means certainly for part D. Access, we're hopeful that <unk> can unlock some of that access but.
Speaker Change: And even with the excellent data, it's slightly likely not going to happen overnight, but in the end, we believe that select Ken.
Speaker Change: <unk> four milligram apart as the first and only hail M showing a consistent benefit across endpoints, including May So we're super excited about that.
Karsten Munk Knudsen: The sales growth is expected to be mainly driven by volume growth of TH1-based treatments for obesity and diabetes, with the expectation of continued volume growth and capacity limitations. The Outlook also reflects expected continued periodic supply constraints and related drug shortage notifications across a number of products and geographies. We expect that operating profit will grow between 21 and 29% at a concept exchange rate. This primarily reflects the sales growth outlook and continued investments in future and current growth drivers within research, development, and commercial. Our reported sales are expected to be 1 percentage point lower at constant exchange rates, and operating profit is expected to be 2% lower than at constant exchange rates. For 2024, we expect net financial items to amount to a gain of around 1.3 billion Danish kroner. This mainly reflects gains associated with foreign exchange hedging contracts, as well as interest rate gains from cash and marketable securities. The free cash flow is expected to be between 64 and 74 billion Danish kroner, reflecting sales growth and a favorable impact from rebates in the U.S., countered by investments in capital expenditure.
Speaker Change: And this.
Speaker Change: And the second part talk up to question with regards to competitive dynamics in the DLP one diabetes space.
Speaker Change: Yeah. So overall.
Speaker Change: We see stable a stable competitive environment.
Speaker Change: Obviously as we see it.
Speaker Change: An increase in volume we should expect to see also a decrease in price over time as the product gets larger in the marketplace, but again, it's a stable competitive market environment that we have.
Speaker Change: Okay.
Thank you Doug Thank you Richard for the questions next.
Speaker Change: Next question please.
Speaker Change: Thank you.
Speaker Change: One moment please.
Speaker Change: The next question comes from the line of Harry <unk> from UBS. Please go ahead.
Harry: Great. Thank you very much for taking my questions. Maybe just first question back to Doug.
Harry: So you mentioned that you see in a stable competitive environment in the U S. But just wanted to question, whether you've observed any changes to formulary position for <unk> in the U S through 2023.
Whether that impacted prescription growth for example in the fourth quarter.
Harry: And then my second question is on the stay time on therapy for patients surpass the an update on what Youre seeing for what gave me, but also whether do you observe stay time on Pik has changed the tool at the last year of what might be driving that.
Lars-Burghard Jørgensen: That covers the outlook for 2024. Now back to you, Lars. Thank you, Carsten. Please turn to the final slide.
Harry: Keith.
Keith: Thank you Harry so duck any comments to formulary status for our key products and then the state time I will give to Camilla.
Lars-Burghard Jørgensen: We are very pleased with the strong performance in 2023, which shows that more than 40 million people are now benefiting from our innovative diabetes and obesity treatments. We continue to make progress on our strategic aspirations. In 2024, our focus will be on the continued significant expansion of our production capacity, reaching more patients, and on progressing the expanding pipeline. With that, I would like to hand the word back to Dan.
Camilla: Thanks, Larry So overall, we don't see any major change to formulary status for <unk> and if you recall, we have more than 90% unrestricted access so very favorable access and we see that largely unchanged in 2020 for this year.
Camilla: And on stage, China, what we can say is that we generally see a better state time <unk> seen on previous answer obesity treatment like <unk>. So we basically see fewer patients dropping out.
Daniel Musmann-Bosen: Thank you a lot. Next slide, please. With that, we are now ready for the Q&A, where I kindly ask all participants to limit themselves to one or, at most, two questions. This includes sub-questions.
Camilla: It's still early days will be going will be because of the interrupted supply.
Operator: Operator, we are now ready to take the first question. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To re-enter your question, please press star 1 and 1 again.
In the countries.
Camilla: I can also say that both in the U S. But also in Denmark, we see strong indications that the stay time is longer.
Camilla: And then, especially in Denmark, we see the majority of the patients who initiated treatment at the beginning of the end of last year. They they stayed on the treatment throughout the year and I know Sam take generally we see a continued.
Michael Leuchten: We will now take the first question. One moment, please. And the first question comes in line from Mike Nedelkovich from TD Cohen. Please go ahead. Thank you for the questions. I have two for Martin.
Camilla: <unk> in the tune of four to five years. So there's been no major changes to that.
Michael Leuchten: The first is on the GLP-1-GIP dual ag. As it relates to the clinical profile of a once-monthly injection, it seems to me that navigating GI toxicity during the titration phase with a drug that's on board for an entire month could be tricky. Do you think that's a valid concern? And if so, might it undercut, to some extent, the convenience advantage?
Speaker Change: Thank you Camilla and tuck in and thanks for the question Harry So we'll take next question.
Speaker Change: Thank you.
Speaker Change: One moment please.
Speaker Change: The next question comes from the line of Emily Field from Barclays. Please go ahead.
Emily Field: Hi, Thank you two questions.
Michael Leuchten: And then my second question is on oral amicretin. Can you provide any insight into the efficacy you saw in the phase one trial? A reasonable ambition would be for weight loss that approaches that delivered by Cagri-Sema, but via the oral route.
Emily Field: Just on the.
Emily Field: Our guidance range for revenue growth at constant exchange rates.
Emily Field: Alright, I'll call it between 18 and 26.
Emily Field: Could you just give us some color on the guidance between that is that primarily the cadence of supply coming online or is there anything else, particularly at play.
Martin Holtz Lange: How close did amicretin get to that profile? Thank you, Mike. And Martin, over to you. Thank you. Thank you for those questions. First of all, on the once monthly GIP, one GIP. Honestly speaking, we asked ourselves the same questions when we moved from once daily to once weekly. And this is all in the focus of titration.
Emily Field: And then.
Emily Field: Another question just on commercial coverage in the United States, you've pretty consistently indicated that in that commercial is about 50% unemployment in the U S.
Emily Field: I expect.
Can you just put out in 2024. Thank you. Thank.
Martin Holtz Lange: So proper titration will mitigate most GI and tolerance side effects, and therefore, we're quite confident that we can manage once monthly in that setting. We actually didn't see an increase moving from once daily to once weekly, and we don't expect to see that increase moving from once weekly to once monthly. On emicretion, we're not disclosing phase one data, but you should obviously read into the fact that we are stating that we are progressing further in development, which also means that we believe emicretion to be properly differentiated from whatever else is out there. Thank you, Mike, for the question. Thanks for being up early.
Speaker Change: Thank you and then Emily samples a bit back, but I think we got your question So Catherine.
Emily Field: Color on the guidance ranges and then later duck covered Suffolk, albeit in the U S.
Emily Field: Yeah.
Speaker Change: Thank you for that question Emily.
And yes, you are correct our guidance ranges.
Catherine: Not broader than the than what they had normally been at at this point in time.
Catherine: And of course dependence is too narrow guidance ranges or the yes as time progresses.
Catherine: And the reason why we've chosen to.
Catherine: To broaden that slightly is basically the dynamics, we've seen over the past or the past quarter say in 'twenty, three and even in 'twenty, two so a dynamic markets and.
Peter Verdult: Next question, please. Thank you. We will now take the next question. One moment, please. And the next question comes from Peter Verdult from Citigroup. Please go ahead.
Catherine: Constrained supply and gross to net adjustments linked to the U S. Gross to net model so fundamentally than that no.
Peter Verdult: Yeah, thanks Peter Verdult, two questions please for Lars or Carsten. You've mentioned many times Novo or management's number one priority is scaling supply. I just want to try and marry that with the comments you provided for 24 and Guidance.
Catherine: Major fundamental changes to what we've seen in prior quarters. We just felt that it was prudent at the beginning of the year to start out with it with a notch and wider guidance ranges.
Catherine: Thank you Kirsten and Dr. <unk> comments on the coverage probably go in the U S and employer opt in.
Peter Verdult: I mean, if I just annualize your exit run rate Q4 2023, you're pretty much at the bottom end of 2024 guidance. Now, I realize there's FX and there's rebates to consider, but I did want to push my luck and try and get a handle on how significantly capacity will increase in 2024, especially in light of Select coming on the label this year and likely increasing demand further. And then, secondly for Carsten, just a quick update on revenue recognition from 340B pharmacies. I know you currently only partially recognize revenue, and that's what's baked into guidance, but I thought there was a chance that could change in 2023, given that you had prevailed in litigation with HHS. So could there be any change in your stance on 340B in 24?
Yes, thanks, Emily So we still continue to enjoy broad market access where we'll go with that so over 90% and as we've communicated that equates to around 50 million people living with obesity, who are now covered and overall there will be opt ins and opt out, but we continue to see improvements in the net coverage. So our focus will be.
Continuing to secure coverage over time and to keep continuing to grow the volume market, but overall, we are pleased with the level of access that we have and looking forward to improving that over time. Thank.
Speaker Change: Thank you so much Doug and thanks, Emily for the questions next question. Please.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: One moment please.
Speaker Change: The next question comes from the line of seamless Fernandez from Guggenheim Securities. Please go ahead.
Seamless Fernandez: Oh, thanks, so much for the question so.
Seamless Fernandez: Just a couple here on the flip GAAP can you just help us understand the technology that you are using to extend the half life to once monthly.
Karsten Munk Knudsen: And am I right that were you to fully recognize revenue, that could actually have quite a meaningful uptick? Compared to Novo Earnings, we're around 5%. Thank you. Thank you, Pete. Karsten, I have two questions for you. Yeah, so first, as to our 2024 guidance, the important point is that we are continuing the growth trajectory we showed in 2023. And just to remind you, 36% sales growth added to the tune of 5 million people on non-wash products over 12-month periods.
Seamless Fernandez: Just trying to get a better understanding of the likelihood that and your confidence in delivering a monthly profile here as well as the efficacy profile given you.
Speaker Change: <unk> plans to.
Speaker Change: Work.
Speaker Change: With alacrity on the oral <unk>.
Speaker Change: Molecule and then just.
Speaker Change: On the WOMAC scores can you just help us understand how those WOMAC score, it's kind of compare in your OA study to.
Karsten Munk Knudsen: So we do believe that that's significant scaling, and in round numbers, we're talking about that magnitude when you look at our scaling into next year. So it's a similar type of scaling we'll be doing in 2024. I don't necessarily like the logic of multiplying Q4 by 4 because we're in a chronic disease business. So all the ups and downs of currencies and inventories in one quarter make it dangerous to annualize just based on three months. But again, the growth platforms remain the same. It's Rubellsis, it's Exempic, and it's Vigovi.
Speaker Change: Other treatment regimens and if.
Drop in on pain medication.
Like naproxin or other medications like that was.
Was allowed and if that separation occurred despite that thanks.
Seamus for these questions Martin I'll give it to you.
Martin Parkway: Yes. Thank you very much Joe first of all on the one sponge.
As you obviously know that this is phase one and this is one of a number of tracks that we are pursuing in this space.
Karsten Munk Knudsen: And we're scaling all of those three platforms, which is what gives us the guidance that we've provided today, and then as to 340B. You're right, as we state, we're only partially recognizing 340B revenue, and that's linked to the accounting standards of, in order to recognize revenue, it has to be what the accountants or the auditors call highly probable. So that's the backdrop behind that.
It's a technology that we cannot share at this point in time, but but broadly speaking we are confident and happy with our research progress in this space and obviously, we will not take.
Martin Parkway: Assets into phase, one without a level of confidence in the broad applicability and success.
Karsten Munk Knudsen: And yes, we prevailed in our case back in January 23. But there are still two cases outstanding in different jurisdictions around the same question. So those would be key informative points for us to decide on how to proceed forward vis-à-vis our accounting recognition in this space. Thank you, Pete. Thank you, Carsten. And next question, please. Thank you. We will now take the next question. One moment, please. And the next question comes from the line of Luis Chen from Canto. Please go ahead.
Martin Parkway: <unk>.
Speaker Change: All right.
On the WOMAC.
Speaker Change: You sort of brought up.
Speaker Change: Blake ability is that if you see a 35 point change from baseline.
Speaker Change: And the very clinically relevant space and here, we saw a 40.
Speaker Change: <unk> 41 point.
Improvement.
Speaker Change: In terms of concomitant medications. This was a lot but this is specific to what we have.
Speaker Change: <unk> group in the study.
Speaker Change: Also saw improvement in the placebo arm.
Speaker Change: But.
Speaker Change: The improvement too.
Speaker Change: It's magnified was above and beyond that and in the space.
Speaker Change: Statistically significant as well as clinically relevant.
Luis Chen: Hi, thank you for taking my question. So my first question is, how do you think about the launch of Lilly's Deep Bound in your guidance for 2024? And then the second question is, when do you expect to report data from your NASH or MASH studies, such as your ESSENCE study or your FGF21? Thank you. Thank you, Luis. Carsten, I will give the first to you with guidance and then Martin, and later you on MASH.
Speaker Change: Thank you so much.
Martin and Thanks Seamus next question please.
Speaker Change: Thank you.
Speaker Change: One moment please.
Speaker Change: The next question comes from the line of Simon Baker from Redburn Atlantic. Please go ahead.
Simon Baker: Thanks for taking my questions two if I may please.
Simon Baker: Firstly on Capex.
Simon Baker: Wonder if you could give us.
Simon Baker: Some sort of idea of when that 45 billion.
Simon Baker: The investment in 'twenty, four we will start to come on stream.
Simon Baker: API manufacturer fit and finishing and any indication about the run rate thereafter.
Luis Chen: Yeah, so as always, when forecasting, we take into account demand in the market, competition, and supply capacity. So, those factors are what we've weighed into guidance, both in terms of the pricing environment in the U.S. to maintain a high degree of formulary access at the PBM basis, and then on the volume basis, I would say that is more a question about supply capacity since we're not competing for share given the magnitude of the market. Thank you, Karsten. I know it's too much.
Speaker Change: Secondly, a.
Speaker Change: A question on the recent <unk> account.
Speaker Change: <unk> collaboration that you did I wonder if you could just.
Speaker Change: Give us some more.
Reasoning.
Speaker Change: For choosing that.
Speaker Change: Is this about accessing that platform or is it a specific molecule that you've launched this namely EUR $37 million. Thanks, so much.
Speaker Change: So our first cost and Capex.
Speaker Change: Yeah. So.
Karsten Munk Knudsen: Thank you very much. For the ESSENCE NASH study, we expect to see a readout around the turn of this year and then progress towards regulatory findings. The FGAD21 study is a phase two trial, actually also investigating the effect of caclosema in NASH, and we'll see that readout a little bit later.
Speaker Change: And then just Reframing your question slightly because theyre, taking a point estimate and making into timeshare. So I don't think is necessarily the optimal way so so.
Speaker Change: Because.
A good chunk of the Capex will be spending this year.
Martin Holtz Lange: Thank you, Marcin, and we're ready for the next question. Thank you. We will now take the next question. One moment, please. And the next question comes from Sachin Jain from Bank of America. Please go ahead. Thanks for my question. Sachin Jain here from Bank of America.
Speaker Change: It will be on the on projects, we already initiated in 2003 yard yeah. So as you've noted and we have announced capex.
Speaker Change: Yeah, just in 'twenty treats the tune of <unk> 5 billion.
Sachin Jain: Firstly, just on amicrotin, back to you Martin, the plan to progress your commentary is very vague, particularly for the oral formulation. So I'm going to just ask you why you're being vague at the moment and the factors that go into that decision. One would assume an oral CAGRI summer would be exciting, so why not commit?
Over the lifetime of these projects. So those are of course, a key element of the 45 billion.
Speaker Change: So yeah, so in terms of where and when coming onstream. It it will be gradually overtime.
Speaker Change: On an API, which saw some of that.
Speaker Change: The bigger ticket items.
Speaker Change: She API coming on aren't.
Sachin Jain: So just what are you waiting for? And then the second question on supply. Thank you for the color on doubling the lower doses for WeGo in the coming months. Should I assume there's ability to further supply at the lower dose, or is doubling the limits fully at 24? Thank you.
Speaker Change: Frame already from additional epi capacity coming Onstream already from 2025, and then there'll be different capacities coming online pretty much every year from there on across manufacturing footprints.
Speaker Change: Thank you Kirsten and thank you Simon.
Martin Holtz Lange: So, Martin, first to you, and then Carsten, you'll take the supply. So, thank you very much, Sachin. I'm not sure I'm being vague. We're just saying that we're not communicating phase one data. I think you will hear or see us progress should the data confirm both the subcontainers but also potentially the oil. The reason why we are pursuing both in phase one is obviously to provide optionality. We see a big demand, and we need to provide flexibility and optionality. Having both an oil and a subcontainer is providing that.
Simon.
Speaker Change: With regards to the recent collaboration than that at this point in time, we don't have too much to add but I will use the opportunity to do a bit of advertisement for our upcoming capital markets day, but we'll talk more about these early research partnerships and then we will be happy to address that.
Speaker Change: Yes.
Speaker Change: Next question please.
Speaker Change: Thank you.
Okay.
Speaker Change: The next question comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.
Mark Purcell: Yeah. Thanks for taking my questions. A question number one what kind of a U S fill and finish lines I think he moved from one to three lines over the course of 2023 could you help us understand how many lines might be added to the cadence of those additions during the course of 2024 and then secondly.
Karsten Munk Knudsen: When it comes to efficacy, you've heard us say a number of times, and we'll stay with that. We want to see differentiated products, and that goes for both subcutaneous and oral in the marketplace. And what we have seen so far for emicretin brings us confidence that emicretin, both oral and subcutaneous, when we see the data, has that potential. Yeah, Sachin, and thank you for the Vigovi question.
Mark Purcell: As we shift from waste as a surrogate marker to outcome is becoming more important how often are you assessing the key product attributes of Calgary summary, I'm accretion such that you have confidence you can show an outcomes benefit over cemetery tied in future clinical development.
Mark Purcell: So wed be Colby <unk> matching later outcome trials for future obesity pipeline products.
Speaker Change: Yeah, Hi, Mark so.
Speaker Change #100: As to the Kobe, and and and CMO feeling and what I can say is that we are on track with what we previously communicated with the with the three CMO lines we.
Karsten Munk Knudsen: So to be a little bit more precise vis-a-vis Vigovi, then what we have done is that we have increased our supply of the starter doses by more than double. And that has taken place. And as we have also previously communicated, we will continue to gradually expand our supply of starter doses as well as all dose ranks, and we'll gradually scale that as we scale our supply capacity. So we have a sustainable supply chain in place, including the necessary inventories to avoid the stop-go pattern that we saw in the past.
Speaker Change #101: We don't think it's prudent to continue to specify number of lines and locations and for Sensus and Cmos.
Speaker Change #101: Just to say that we will continue to expand capacity in the years to come given the significant unmet need we're seeing so unfortunately, then you'll have to impute.
Speaker Change #101: From our guidance in swaps capability, how we are scaling our supply.
Karsten Munk Knudsen: Thank you for the questions, and we're ready for the next set of questions. Thank you. We will now take the next question. And the next question comes from Martin Parkway from SEB. Please go ahead. Great, thank you very much. Two questions. Firstly, on regional development. You know, we saw a very big imbalance this year, at least in the fourth quarter, between North America and international relations.
Speaker Change #101: And specifically on.
Speaker Change #101: On the cardiovascular benefits all of us.
Speaker Change #101: Pipeline products vis vis the magnetite.
Speaker Change #101: What reflects emmendorfer from <unk> right now we have to rely on biomarker as debt.
Speaker Change #101: <unk>.
Speaker Change #101: It is obviously a superior on body weight or has the potential to be superior glycemic control, but also will be superior on for example.
Martin Parkway: How should we see that going into 2024? I don't expect to get, you know, precise numbers, but just some words in relation to the guidance that you have. And then a second question: you are doing some reprioritization, among other things, removing Libemir from the U.S. market. How far can you actually go and how cynical can you be to prioritize less insulin, of course, and more of the production capacity on digital point of entry?
Speaker Change #101: A blood pressure lowering lipid lowering and potentially all the very relevant.
Speaker Change #101: Actually the Biomarkers.
Speaker Change #101: That gives us a lot of confidence in that category and that will be associated with the crop book quite.
Speaker Change #101: Quite profound.
In the cardiovascular space, but obviously, we had to show that in phase III and as you know we are currently running the redefined three started to that effect.
Martin Parkway: Thank you, Martin. Karsten, the first question related to guidance and regional and then later on about portfolio participation. Yeah, so. As to the regional dynamics, I'd say these are classic dynamics. When people, such as yourself, have followed the company for an extended period of time, then there will be this type of seasonality.
Speaker Change #102: Thank you Martin and thank you Mark So we will have time for two more set of questions. If they have kept brief so yeah. So let's try to squeeze that in.
Speaker Change #103: Thank you.
The next question comes from the line of Richard Parkes from BNP Paribas Axon. Please go ahead.
Karsten Munk Knudsen: So, then talking into 2024, the growth drivers remain the same. Again, of course, Vigovia and Ocempic. And the real difference, what you saw in 2023, is actually that on DH1 and diabetes, the growth levels were similar, just north of 50%, both in I.O. and North America.
Richard Parkes: Hi, Thanks for taking my questions I'll be quick.
Richard Parkes: So guidance cost I.
Richard Parkes: I think through last year, you've consistently stated that the top end of guidance wasn't necessarily a magic ceiling in terms of what you have capacity to manufacture I wonder if that's still the case in 2024 or whether they're either range suggests you've been more bullish for the top end.
Richard Parkes: And then just.
Speaker Change #105: Push you a bit more on so across the expansion plans I mean, you've been quite clear about fill finish expansion for.
Karsten Munk Knudsen: So, the fundamental difference is the pace of Vigovia rollouts. And, of course, North America is rolling ahead of I.O., but it is important to note that we will be launching in additional I.O. markets in the volume pathway for Vigovia into 2024. But you should expect North America still to be rolling at a higher pace than I.O. Thank you, Karsten. Last word for you.
Speaker Change #105: But my understanding is with flex touch it's all about optimizing what you already have so is there any way points that you can get for investors around when you might be able to move from being.
Speaker Change #105: <unk>.
Speaker Change #105: Seeing more of an inflection around that rather than just optimizing across do you currently have.
Speaker Change #106: No what have you.
Speaker Change #106: So.
Speaker Change #107: Thanks Richard.
Speaker Change #108: For those questions. So.
Lars-Burghard Jørgensen: Thank you, Martin. On portfolio participation, I think you should see us as being committed to people living with diabetes and in need of insulin. When we look at levomere, specifically in the U.S., we have a situation where we have placebo as well.
Speaker Change #108: The guidance range than it is important to reiterate this is the most realistic.
Speaker Change #108: The outlook that we're providing to the markets. So had we thought that we could grow faster than the than this realistically then we wouldn't have been providing this guidance set at this point in time so.
Speaker Change #108: So this is what you should expect on <unk> and that's the normal distribution then.
Lars-Burghard Jørgensen: We will be launching a weekly insulin, and we also see dynamics where we have lost a contract on levomere. So for us to stay committed to a patient is also leading to us thinking carefully about what are the most optimal ways of treating those patients with the most efficacious products. And on GPO1, there's also the optimization of moving patients from daily treatment to weekly treatment, where you get higher efficacy and, obviously, an easier to produce presentation as you reduce the number of injections and presentations needed.
Speaker Change #109: I expect something around the middle of the range.
Speaker Change #109: That's how we work on this and then it's important to note that the being in the in a supply constrained environment. Then the then it's very important for us in order to men's health business and spend the way that that would focus on our supply chain and ensure that its resilience. So we don't get into.
Speaker Change #109: Some of the bumps that we saw in the past with the stop go type bids assistance. So it's important that we havent sustainable supply chain. So that factors in also so most likely range and of course, our job is to run the company in the best possible manner and that in sales driving the topline growth as well as having a.
Lars-Burghard Jørgensen: So, we are going to be, say, having a social responsibility vis-a-vis the patients while still optimizing to a degree where it both benefits the patients and our ability to scale. Thank you. Thank you, Martin. One moment, please. The next question comes from Richard Vosser from J.P. Morgan. Please go ahead.
Speaker Change #109: This isn't a supply chain set up.
Speaker Change #109: And it is true.
Speaker Change #109: So scaling up.
Speaker Change #109: Let's touch.
Speaker Change #109: You can say in entails both the car.
Conscious feeling as SMT unpack I can only say that the that we're scaling all of those on ongoing basis. So we have active projects in.
Speaker Change #109: And each of these areas.
Speaker Change #110: We don't want to get into details externally around their project plans.
So on but I.
Speaker Change #110: I would point you to our recently announced the expansion of in charter after some 16 billion <unk> with <unk>.
Richard Vosser: Hi, thanks for taking my questions. Two questions, please. First question, just could you update us on the pair discussions around select and how you see rebate pressure in 2024 for the obesity franchise, given it's still supply constrained, particularly in the US? And the second question, also thinking about diabetes, we've seen, you know, a consistent sort of 10 to 15% rebate pressure in the US around Zempik-Ribautis and on the type 2 side.
Speaker Change #110: The tap directly into expanding that pipeline.
Speaker Change #110: As an example of the significant Capex that project.
Speaker Change #110: To that extent.
Speaker Change #111: You Richard for the questions and we'll take one final question.
Thank you.
Speaker Change #112: One moment please.
Speaker Change #112: Our final question comes from the line of Michael <unk> from Nordea. Please go ahead.
Michael: Thank you very much two brief questions. So first of all on all of them accretion so.
Richard Vosser: Is that how we should think about the pressure going into 2024? Thanks very much. Thank you, Richard and Doug. I'll give the word to you for the select pair discussions, what you can say, and then also competitive dynamics. Yeah, thank you for the question, Richard. I really appreciate it.
You've previously been saying that the ambition was to sort of create a an oral sema is is that still the you saw the ambition given all the other questions we've had on our increasing.
Michael: And then secondly on.
Michael: The program that they did it on daily direct.
Michael: So with direct to consumer more or less.
Michael: Something that nobody's, considering as well given that could be sort of a significant untapped potential in the private market.
Doc Lange: So just to reiterate, you know, we're super excited about the potential of select data, and we do eagerly await the hopeful label update in the coming month. And, you know, we're doing our normal preparation for that. When we think about what that means, certainly, for Part D access, you know, we're hopeful that SELECT can unlock some of that access, but, you know, in the end, even with the excellent data, it's likely not going to happen overnight. But, you know, in the end, we believe that SELECT can set SEMA 2.4 milligram apart as the first and only AOM showing a consistent benefit across endpoints, including maize.
Michael: Good matching any brief comment on M accretion.
Michael: So very high level short answer's, yes, obviously, if we have the explorations we have differentiated products.
Michael: <unk>.
Has to be in the range of where we see efficacy and safety with Zimmer.
Thank you Martin and Doug over to you any comments on our competitive.
Doug: Our commercial strategy in light of a competitor's movement.
Speaker Change #115: What I would say is.
Doug: Bring it back to us and say, we believe in the foundation that we have in Novo care and there is lots of elements to that so we'll continue to stay focused on that and I. Appreciate the question.
Doc Lange: So, you know, we're super excited about that, and the second part of the question with regard to competitive dynamics in the GLP-1 diabetes space. Yeah, so overall, we see a stable competitive environment. Obviously, as we see an increase in volume, we should expect to see a decrease in price over time, as the product gets larger in the marketplace.
Michael: Thank you Michael thank.
Speaker Change #116: Thank you for the answer this concludes the Q&A session. Thank you for participating and please feel free to reach out to Investor Relations. If you have any follow up questions before we close the call as always I would like to hand over to <unk> for the final remarks, yes. Thank you Tien Tsin I'd also thank you for me for all participating today I hope, it's clear that would be very pleased with our performance in the <unk>.
Doc Lange: But again, it's a stable competitive market environment that we have. Thank you, Doc. Thank you, Richard, for the questions. Next questions, please. Thank you. One moment, please. The next question comes from Diane from Hury, Seston from UBS. Please go ahead. Brilliant.
Speaker Change #117: Posture and equally as excited about what we can do in 2024 based on the tragic.
Speaker Change #118: Effective guidance range, we have put forward a lot of focus on scaling capacitors.
Diane Hury Seston: Thank you very much for taking my questions. Maybe just for the first question, back to Doug. You mentioned that you've seen a stable competitive environment in the US.
Speaker Change #119: Bill Temple backing off our scaling in the form of.
Speaker Change #120: Now more than doubling to start doses in the U S and we look to continuously expand our capacity and equally important the expansion of our pipeline and really doubling down on on our strongholds in diabetes obesity, but also increasingly called vascular disease and rare blood disorder. So we're excited about how the pipeline is shaping up so thank you all for your attention.
Diane Hury Seston: But just wanted to question whether you've observed any changes to the former position for Zempick in the US through 2023 and whether that impacted prescription growth for Zempick in the fourth quarter. And then my second question is about stay time on therapy for patients. So firstly, an update on what you're seeing for Wacobi, but also whether the observed stay time on a Zempik has changed at all over the last year and what might be driving that.
Speaker Change #120: Today, and we look forward to see you in Asia.
Speaker Change #121: Bye bye.
Yes.
This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change #121: Okay.
Speaker Change #121: [music].
Diane Hury Seston: Thank you. Thank you, Harry. So, Doc, any comments on the formulary stages for key products? And then the stay time I will give to Camilla.
Camilla Sylvester: Yep, thanks, Harry. So overall, we don't see any major change in formula status for GLP-1s. And if you know, again, you recall, we have more than 90% unrestricted access, so very favorable access. And we see that largely unchanged in 2024 this year. And on stay time, what we can say is that we generally see a better stay time on VGOV than what we've seen on previous anti-obesity treatments like Sexenda, so we basically see fewer patients dropping out. It's still early days for VGOV because of the interrupted supply in the countries, but we can also say that both in the U.S. and in Denmark, we see strong indications that the stay time is longer for VGOV. In Denmark, we see that the majority of the patients who initiated treatment at the beginning of last year stayed on treatment throughout the year.
Camilla Sylvester: And on OSEMPIC, generally, we see a continued long stay time in the tune of four to five years, so there's been no major changes, and Camilla and Doc, and thanks for the question, Harry. So we'll take the next question. Thank you. One moment, please.
Emily Field: The next question comes from the line of Emily Field from Barclays. Please go ahead. Hi, thank you. I have two questions.
Emily Field: The first is just on the guidance range for revenue growth at constant exchange rates; it is quite a wide delta between 18 and 26. Could you just give us some color on the guidance between those? Is that primarily the cadence of, well, go resupply coming online, or is there anything else particularly at play?
Emily Field: And then another question just on commercial coverage in the United States. You know, you've pretty consistently indicated that in that commercial slice, about 50 percent of employers in the U.S. opt in. Are you expecting any major changes to that in 2024? Thank you. Thank you, Emily. The sound was a bit bad, but I think we got your question.
Karsten Munk Knudsen: So Karsten, any color on the guidance ranges and then later doctor coverage of Vigovi in the U.S.? Thank you for that question, Emily. And yes, you're correct. Guidance ranges are much broader than they normally are at this point in time. And of course, the plan is to narrow guidance ranges over the years as time progresses. The reason why we've chosen to broaden them slightly is basically the dynamics we've seen over the past quarters in 2023 and even in 2022. So a dynamic market and constrained supply and growth-to-net adjustments linked to the US growth-to-net model.
Karsten Munk Knudsen: So fundamentally, there are no major fundamental changes to what we've seen in prior quarters. We just felt that it was prudent at the beginning of the year to start out with a much wider guidance range. Thank you, Carsten. And Doc, comments on coverage for Wigowi in the U.S. and employer opt-in. Yep, thanks, Emily. So we still continue to enjoy broad market access for Wolgovi. That's over 90% of the population.
Doc Lange: And as we've communicated, that equates to around 50 million people living with obesity who are now covered. And overall, there will be opt-ins and opt-outs, but we continue to see improvements in net coverage. So our focus will be continuing to secure coverage over time and to keep growing the volume market. But overall, we're pleased with the level of access that we have and looking forward to improving that over time. Thank you so much, Doc, and thanks, Emily, for the questions. Next question, please. Thank you. One moment, please.
Seamus Fernandes: The next question comes from the line of Simos Fernandes from Guggenheim Securities. Please go ahead. Oh, thanks so much for the question. So, just a couple here on the blipgif. Can you just help us understand the technology that you are using to extend the half-life to once monthly? Just trying to get a better understanding of the likelihood that and your confidence in delivering a monthly profile here, as well as the efficacy profile given your plans to work with alacrity on the oral amicretin molecule. And then just on the WOMAC scores, can you just help us understand how those WOMAC scores kind of compare in your OA study to other treatment regimens, and if drop-in on pain medication like naproxen or other medications like that was allowed, and if that separation occurred despite that?
Martin Holtz Lange: Thanks. Thank you, Seamus, for these questions very much, and I'll give the word. Yeah, thank you very much.
Martin Holtz Lange: So first, first of all, on the once-monthly, as you obviously know, this is phase one, and this is one of a number of tracks that we are pursuing in this space. It's a technology that we cannot share at this point in time, but broadly speaking, we're confident and happy with our research progress in this space. And obviously, we will not take assets into phase one without a level of confidence in their broad applicability and success. Um, All. On the WOMAC, the sort of broad applicability is that if you see a 35-point change from baseline UI in the very clinically relevant space, and here we saw a 41-point improvement. In terms of concomitant medication, this was a lot, but this is specifically why we have a control group in the study. You actually also saw improvement in the placebo arm, but the improvement seen with magnetite was above and beyond that and in the space of being statistically significant as well as clinically relevant.
Martin Holtz Lange: Thank you so much, Martin, and thank you, Seamus. Next question, please. Thank you. One moment, please.
Simon Baker: The next question comes from the line of Simon Baker from Redburn Atlantic. Please go ahead. Thank you for taking my questions. Two, if I may, please.
Simon Baker: Firstly, on CAPEX, I wonder if you could give us some sort of idea of when that 45 billion investment in 24 will start to come on stream, be it API manufacture or fill and finish, and any indication about the run rate thereafter. And then, secondly, a question about the recent EraCal collaboration that you did. I wonder if you could just give us some more of your reasoning for choosing that. And is this about accessing their platform, or is it a specific molecule that you've licensed, namely Era379? Thanks so much. So first, Karsten Kebeks.
Karsten Munk Knudsen: Yeah, so Simon, just reframing your question slightly because taking a point estimate and making it into a time series I don't think is necessarily the optimal way to do it. So I would say because, A good chunk of the CAPEX we will be spending this year will be on projects we already initiated in 2023 or earlier. So, as you've noted, then we have announced CAPEX just in 2023 to the tune of 75 billion over the lifetime of these projects. So those are, of course, a key element of the 45 billion. So in terms of when coming on stream, it will be gradually over time on API, with some of the bigger ticket items, we'll see API coming on stream already from additional API capacity coming on stream already from 2025.
Karsten Munk Knudsen: And then there'll be different capacities coming online pretty much every year from there on, across our manufacturing footprint. Thank you, Carsten, and thank you, Simon, with regard to the recent collaboration. Then, at this point in time, we don't have too much to add, but I will use the opportunity to do a bit of advertising for our upcoming Capital Markets Day, where we'll talk more about these early research partnerships. And then we will be happy to address that. Next question, please. Thank you. The next question comes from Mark Purcell from Morgan Stanley. Please go ahead. Yeah, thanks for taking my questions. Question number one: we go to the US fill and finish lines.
Mark Purcell: I think you moved from one to three lines over the course of 2023. Could you help us understand how many more lines might be added to the cadence of those additions during the course of 2024? And then secondly, as we shift from weight as a surrogate marker to outcomes becoming more important, how, Martin, are you assessing the key product attributes of Cagri, Sema, and Amicretin such that you have confidence you can show an outcomes benefit over semaglutide in future clinical development? So we go over to you, Karsten, and Martin, later, outcome trials for future obesity pipeline products. Hi Mark, so as to Vigovi and CMO filling, what I can say is that we are on track with what we have previously communicated with the three CMO lines.
Mark Purcell: We don't think it's prudent to continue to specify the number of lines and locations and potential CMOs, just to say that we will continue to expand capacities in the years to come given the significant unmet need we're seeing. So unfortunately, then you will have to impute from our guidance into our scalability how we are scaling our supply, and specifically on the cardiovascular benefits of our pipeline products vis-à-vis maglutite. Right now, what we, for example, know from CAC with SEMA right now is that Cagliosema is obviously superior in body weight or has the potential to be superior in glycemic control but will also be superior in, for example, blood pressure lowering, lipid lowering, and potentially all the very relevant cardiovascular biomarkers.
Karsten Munk Knudsen: All of that gives us a lot of confidence that caglicemia will be associated with a quite profound benefit in the cardiovascular space, but obviously, we have to show that in phase three. And as you know, we are currently running the Redefine Free study to that end. Thank you, Martin, and thank you, Mark. So we'll have time for two more sets of questions if they are kept brief. So let's try to squeeze that in.
Martin Holtz Lange: Thank you. The next question comes from Richard Parkes from BNP Paribas Exxon. Please go ahead.
Richard Parkes: Hi, thanks for taking my questions. I'll be quick based on guidance capacity. I think throughout last year, you consistently stated that the top end of guidance wasn't necessarily a magic ceiling in terms of what you had capacity to manufacture. I wonder if that's still the case in 2024, or whether the rider range suggests you've been more bullish with the top. And then just to put you a bit more on sort of capacity expansion plans, I mean you've been quite clear about fill finish expansion for Wigo V, but my understanding is with FlexTouch it's all about optimizing what you already have, so is there any way points that you can give for investors around when Thank you. I will pass NOAA to you.
Karsten Munk Knudsen: Yeah, so thanks, Richard, for those questions. So as to the guidance range, it's important to reiterate that this is the most realistic outlook that we're providing to the markets. So had we thought that we could grow faster than this realistically, then we wouldn't have been providing this guidance at this point in time. So this is what you should expect on and, as a normal distribution, then expect something around the mid-range of the range.
Karsten Munk Knudsen: That's how we will work on this. And then it's important to note that being in a supply constrained environment, it's very important for us, in order to manage our business in a sustainable way, to focus on our supply chain and ensure that it's resilient. So we don't get into some of the bumps that we saw in the past with the stop-go type decisions. So it's important that we have a sustainable supply chain. So that factors in also. So it is most likely in the range.
Karsten Munk Knudsen: And, of course, our job is to run the company in the best possible manner. And that entails driving top-line growth, as well as having a resilient supply chain set up. Then as to the scaling of FlexTouch, which you can say entails both cartridge filling as assembly and pack, I can only say that we're scaling all of those on an ongoing basis, so we have active projects in each of these areas. We don't want to get into details externally around project plans and so on, but I would point you to our recently announced expansion in Shatla of some 16 billion DKK, which taps directly into expanding that pipeline, just as an example of a significant CapEx project to that extent.
Karsten Munk Knudsen: Thank you, Richard, for the questions, and we'll take one final question. Thank you. One moment, please.
Michael Novod: The final question comes from the line of Michael Novod from Nordea. Please go ahead. Thank you very much. Two brief questions.
Michael Novod: So, first of all, on oral amicrescence. You've previously been saying that the ambition was to sort of create an oral cagusema. Is that still the sort of ambition, given all the other questions we've had on oral amicrescence?
Martin Holtz Lange: And then secondly, on the program that Lily did on LilyDirect, for sort of direct-to-consumer, more or less, is that something that Novo is considering as well, given there could be sort of a significant untapped potential in the private market? Thanks. Good. Martin, any brief comment on amicretin? Yeah, so very high-level, short answers. Yes, obviously, if we have the aspiration to have differentiated products, amicretin, oral amicretin, has to be in the range where we see efficacy and safety will be calculated.
Doc Lange: Thank you, Martin. And, Doc, over to you. Any comments on our competitive commercial strategy in light of a competitor move?
Doc Lange: What I would say is, I bring it back to us and say, you know, we believe in the foundation that we have in NovoCare, and there are lots of elements to that. So we'll continue to stay focused on that, and I appreciate the question. Thank you, Michael.
Daniel Musmann-Bosen: This concludes the Q&A session. Thank you for participating, and please feel free to reach out to Investor Relations if you have any follow-up questions. Before we close the call, as always, I would like to hand over to you, Lars, for the final remarks. Thank you, Daniel, and also a thank you from me for participating today. I hope it's clear that we are very pleased with our performance in the past year and equally excited about what we can do in 2024 based on the attractive guidance range we have put forward. We have a lot of focus on scaling capacities with some real temporal backing for our scaling in the form of now more than doubling the initial doses in the U.S., and we look to continuously expand our capacity and, equally important, the expansion of our pipeline and really doubling down on our strongholds in diabetes, obesity, but also increasingly cardiovascular disease and rare blood disorders.
Lars-Burghard Jørgensen: We are excited about how the pipeline is shaping up. So, thank you all for your attention today, and we look forward to seeing you in the near future. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect...