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UPDATE 1-Drugmaker Novo Nordisk nudges up full-year profit outlook after Q1 beat
May 3, 2017 / 9:18 AM / 7 months ago

UPDATE 1-Drugmaker Novo Nordisk nudges up full-year profit outlook after Q1 beat

* Q1 EBIT above forecast

* New drugs drive growth

* Nudges up 2017 sales, operating profit outlook

* Sees lower U.S. political uncertainty

* Novo shares rise 6.9 pct (Adds CEO, share price, background)

COPENHAGEN, May 3 (Reuters) - Shares in Novo Nordisk , the world’s biggest diabetes drug maker, surged on Wednesday as the Danish firm beat operating profit forecasts for the first quarter and nudged up its full-year target.

Analysts had expressed concerns that U.S. pharmacy purchase managers’ demands for bigger discounts, along with attacks by President Donald Trump on pharmaceutical companies’ prices, could have a negative impact on Novo’s outlook.

Novo Nordisk said new products in diabetes and obesity care had helped drive first-quarter sales, allaying investors’ fears of growing competition and squeezed margins in the key U.S. market.

Its shares jumped 6.9 percent to a seven-month high of 283.1 crowns by 0842 GMT.

The company narrowed its 2017 sales forecast to 0 to 3 percent growth from a previously range of -1 to 4 percent, but lifted its operating profit view to a range of -1 to 3 percent from -2 to 3 percent, both in local currencies.

“When we lift the lower end of the range it is mainly because now we are four months into the year and we have not been exposed to any change in the political environment, hence the risk is lower,” Novo CEO Lars Fruergaard Jorgensen said.

Novo’s first-quarter operating profit rose 10 percent on the year to 13.5 billion Danish crowns ($1.9 billion) beating an average forecast of 12.0 billion crowns in a Reuters poll of analysts.

“Sales were driven by our new, innovative products within diabetes and obesity care, and we are seeing the effects of our cost control initiatives,” said Jorgensen, who took over as CEO on Jan. 1.

In September the company initiated its first-ever broad savings initiative in a bid to offset the increasing discounts demanded by U.S. buyers.

Novo’s main rivals in the diabetes space are France’s Sanofi and U.S. drug maker Eli Lilly. ($1 = 6.8052 Danish crowns) (Reporting by Stine Jacobsen; Editing by Subhranshu Sahu and Susan Fenton)

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