Mountain climbing

How Novo Nordisk aims to return to higher operating income growth

U.S. pricing pressure on insulin and hemophilia products have caused Novo Nordisk A/S to guide for negative sales and operating profit growth for the first time ever. While newly launched diabetes and obesity products are growing at a good clip, they remain too small to return the Danish pharma to historical double-digit growth rates on their own.

Two years ago Novo began laying the groundwork for a more innovative R&D strategy to return the company to higher growth.

It announced the shift this past October. Once a mainstay of the company’s pipeline, products intended to provide incremental improvements over existing drugs will no longer make the cut. The pharma is instead focusing exclusively on products that will substantially improve outcomes for patients and payers.

In the nearer term, CEO Lars Fruergaard Jørgensen told BioCentury Novo’s recently and soon-to-be launched products should deliver improvements in outcomes that could be used to negotiate with PBMs, which in turn should expand their markets and drive volume growth.

“It is my vision that we’ll be a world-leading company in treating obesity.”

Lars Fruergaard Jørgensen, Novo Nordisk

Novo also expects growth from obesity programs, where it plans to combine candidates from its industry-leading pipeline of six NMEs to achieve improvements in efficacy that are large enough to overcome impediments to reimbursement and patient adherence.

“It is my vision that we’ll be a world-leading company in treating obesity,” he said.

Still, he said, accelerating growth beyond single digits over the next four to five years will require deals.

Jørgensen plans to add late-stage or commercial products via M&A. While Novo has been active in early stage partnering with both biotech and academia, it has made only two small acquisitions in the past six years.

Jørgensen said Novo is willing to spend in the low single-digit billions in U.S. dollars to acquire a late-stage or commercial company or asset in cardiometabolic disease or hematology.

Over the longer term, Novo is looking to add assets in non-alcoholic steatohepatitis (NASH).

Under pressure

Novo had maintained an operating profit growth target of an average of 15% in krone per year since

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