COPENHAGEN (Reuters) - Novo Nordisk raised its sales forecast for this year thanks to growing demand for obesity drugs and a new injectable treatment for diabetes, now its growth engine as insulin sales decline.
The Danish company is pinning its hopes on a relatively new treatment for type 2 diabetes as its older insulin drugs face political pressure over the soaring cost of the life-sustaining medicine in the United States.
Sales of its new once-weekly injectable treatment, branded Ozempic, rose to 2.3 billion Danish crowns ($345 million) in the second quarter, which was higher than expected by analysts, sending shares in the world’s top diabetes drugmaker 1.4% higher in early trading on Friday.
“The launch of Ozempic is expanding the GLP-1 market, and we are encouraged by the positive market reception in both North America and Europe,” Chief Executive Lars Fruergaard Jorgensen said.
Ozempic belongs to the GLP-1 drug class, which imitate an intestinal hormone that stimulates the production of insulin, and makes up a growing share of the diabetes market.
Novo, an early mover together with Eli Lilly in the sector, has a 46% share of the global GLP-1 market.
It now expects 2019 total sales growth of 4-6%, up from a previous 2-5%, and operating profit growth of 4-6% compared to the previously stated 2-6%, both measured in local currency.
Jorgensen said the upper end of its operating profit outlook stayed unchanged due to investments in marketing of new products and research and development.
This includes four new late-stage clinical trials with semaglutide in people with type 2 diabetes and other complications, including cardiovascular disease, diabetic retinopathy and chronic kidney disease.
While its new drug continued to shine, uncertainty remained in the United States where the Trump administration and other lawmakers have introduced several proposals aimed at lowering healthcare costs for U.S. consumers, some of which have already been scrapped.
Americans pay the highest prices for prescription drugs in the world as most other developed nations have single-payer systems in which the government negotiates drug prices for its people.
“We see that insulins actually become cheaper and cheaper in the United States for those who buy them but unfortunately not for the patients who can not get access to the rebates,” Jorgensen said.
“I think there is consensus across the aisles in Washington that something needs to be done but it’s very difficult to actually gain consensus,” he said.
Novo posted a 10% rise in second-quarter operating profit to 13.5 billion Danish crowns ($2.03 billion), above an average 13.0 billion crowns forecast in a Reuters poll of analysts..
($1 = 6.6642 Danish crowns)
($1 = 6.6688 Danish crowns)
Reporting by Stine Jacobsen; editing by Darren Schuettler and Alexander Smith