諾和諾德 (NVO) 2019 Q1 法說會逐字稿

My name is Keyur Parekh, and I cover Novo Nordisk for Goldman Sachs.

My pleasure to have the management team here.

So without any further ado, I'm passing it on to Karsten to make some introductory comments and then we go straight to Q&A after that.

Karsten, all yours.

Okay.

Thanks, Keyur, and thanks to Goldman Sachs for -- am I on with mic?

Good.

And thanks to Goldman Sachs for hosting this last session with Novo Nordisk.

It's great to see the turn up here at the bank holiday in London.

You all look very nicely, fresh and energized after a long weekend.

So that's good to see.

We are again here so ready to feel your questions.

We have done it in a way as in previous quarters that we will do a rather brief warm-up presentation in order to reserve plenty of time for Q&A.

With me today, I have -- it's not the dynamic tool, but could be something like that.

I have Mike Doustdar from International Operations.

I will come back to why International Operations is really something super interesting again today.

Then as always, Mads Krogsgaard Thomsen, our CSO, here to talk about our pipeline and progress on pipeline.

And then finally, Camilla Sylvest -- not least Camilla Sylvest, Head of Corporate Strategy and Commercial Affairs.

So a strong team.

We should be able to feel all your questions.

So without further ado, we'll dig into the presentation.

You know the forward-looking statements and the uncertainty surrounded around our forward-looking statements.

So I'll not spend too much time around that but jump into the highlights for the quarter.

And we have delivered what we believe is a really solid start to the year in terms of our first quarter.

So our sales growth in constant exchange rates is up 4.5% for the quarter and our operating profit in constant exchange rates are up 8% for the quarter.

Sales growth is driven by International Operations, 13% growth by IO, rest of the U.S. is down 5% and North America 4%, that's an inventory effect that artificially pulls down the U.S. growth and there's some facing off in IO growth.

But net-net, the 4.5% is reflective of growth rates for the quarter.

Then in terms of our commercial execution, then we are taking market share.

80% of our business is in diabetes.

We are gaining market share in diabetes, so we gained 60 basis points of diabetes value market share according to IQVIA MIDAS 2018 compared to a year ago.

So that speaks to both our portfolio and our execution in the diabetes care market.

And one of the key opportunities and we'll come back to that is Ozempic and the penetration of Ozempic where we, in the first quarter, realized DKK 1.4 billion in sales, the brand has now been launched in 19 markets and, of course, the U.S. is key driver for now because that's where we launched first and this is a huge GLP-1 market.

R&D, main event for the quarter was basically 3 filings, but related filings to the FDA, oral semaglutide for glycemic control, oral sema CD, Ozempic CD.

So Mads will come back to that, but 3 key events in terms of regulatory events.

I call it the financials and then, finally, in terms of our outlook then we confirmed our outlook in constant exchange rates for the year.

We're off to a solid start, so confirm our outlook.

The U.S. dollar to the Danish kroner has strengthened a couple of points compared to our last guidance in connection with full year.

So the currency impact is now slightly more favorable than 3 months ago, so we'll come back to that in detail.

So with that and without further ado, then I'm handing it over to Mike Doustdar.

Thank you very much.

I think most of the guys have seen this slide, so I'll try to fast through them.

The split of the sales geographically is -- has caused some little bit -- [a lieu] to that 13% growth in International Operations, 4% decline in U.S. I think the good news for the quarter, again, in IO is not just that the growth numbers look good, but they're coming actually from all 5 regions.

We have a situation where, for the time being, every single region, including by the way Japan is growing quite recently -- decently.

Karsten alluded to some timing effects, I'd like to remind most that, of course, in 2018, we had a situation where IO grew at 7 percentage points composed of an [8 8 8%] from Q1 to Q3 and a lower Q4 at 4%.

So some of the 13% is impacted by that.

And, in general, I would say, in AAMEO and in Latin America, it would not be unusual to have some timing impact from one quarter to the other.

If you look at a thumb and product point of view then the graph shows that you are basically on insulin, doing -- we are doing quite well in International Operations, I would say, especially, in places again like AAMEO and Latin America, both value and volume of insulin is growing phenomenally.

In U.S., you'll have the impact that has been alluded to the negative in U.S., around all the product areas.

So insulin is declining 13%.

There are some stocking effects over there, but U.S. is increasing market share on the insulin.

On GLP-1, 25% growth in International Operations primarily coming from Europe.

And in obesity, we have 51% and triple growth, once again, coming from International Operations, and biopharm is flat at a bit of a plus in IO and minus in U.S.

Yes.

Thanks, Mike.

So a bit more on the market shares.

As Karsten mentioned, we are growing our total diabetes market share with 0.6% just to make sure that we see that, that is driven basically out of the U.S. so far and it has really come around to a growth after we have -- growth has become more competitive in the GLP-1 segment.

But when we look at insulin, you see that both of our operational units are driving also insulin volume market share and, of course, that in itself is at a relatively absolute high level, very close to between 45% and 50%.

When we look at the uptake of Ozempic, I think most of you have looked at this graph, but it's still nice to show it again.

You see a nice uptake of Ozempic from basically 0 NBRx in the U.S. to now 30.

And that also means that why we chose that's been declining from 40% to 20%, there is a net increase of 10 percentage points NBRx share win in the U.S. That, of course, also means that now our total GLP-1 NBRx share is across our TRx share.

So that's, of course, where we would like to see it.

Now with the U.S. if you then look at countries outside the U.S., you see also a very consistent uptake curve actually for many of these countries, even stronger than the U.S. because this is total market share.

That also relates to the fact that we now have, in many of these countries, a one-payer system that means once we get reimbursement and market access, we can go all in.

In the U.S., we took a more staggard approach because we needed to get access which comes more gradually.

But overall, we are happy and satisfied with the rollout of Ozempic in the 19 countries that have launched and we, of course, continue to roll this out in many places.

Talking about obesity.

Mike said, we grew 51%.

It is also very strong part of our total growth, so bringing significant value to the patients.

We have launched in more than 40 countries and there are really 2 types of markets at the moment.

The U.S. where we have almost 99% reimbursement from most patients because of employer-funded insurance.

And then we have the other markets where it is for the majority out-of-pocket payment, but still have to go via the doctor for prescription.

Of course, over time, we are looking at how we may potentially be able to include more markets into the more reimbursed segments, but that comes on a country-by-country basis in that case.

But so far, really strong growth and obesity contributing to a big part of our business.

So that's the current state, but Mads will talk a little bit more about the future pipeline also.

Thank you, Camilla.

And I'll also be brief because I think you know most of us up here, but services inspiration may be of a bit of discussion.

We did submit on March 20, the NDAs described by Karsten.

And normally you have an action date 10 months later, which would be January 20.

But as you know for the type 2 diabetes glycemic indication, we opted to use the priority review voucher, which essentially means a September 20 expected action date for the type 2 diabetes indication for oral semaglutide.

Tresiba, we have to say, has now been up against glargine U100 in the DEVOTE trial.

Now we have a big trial reporting later at a conference later this year where we both document really meaningful reductions in hypoglycemia, both severe, nocturnal and so on versus glargine U300, also known as Toujeo.

At the same time, we improved significantly HbA1c, and we reduced -- this even occurs at reduced dosing versus glargine U300.

Obesity.

Yes, Camilla, we now have started Phase II trial for amylin, once-weekly analogue that can also be combined with semaglutide in a 2 plus 2 equals 4 way we hope.

And if that happens, we might be approaching bariatric surgery levels of weight loss if successful towards the end of the day.

Biopharm-wise, quite a lot has happened.

We've got Esperoct extended half-life factor VIII product approved in the U.S. and is now also actually endorsed by the CHMP in Europe, awaiting commission approval.

Then for concizumab, the first-in-class Tissue Factor Pathway Inhibitor antibody monoclonal human, essentially got breakthrough designation by the FDA for the hemophilia B with inhibitor space where there's not much out there.

And that means that we have a very expeditious and amicable and ongoing dialogue with the agency vis-à-vis getting into Phase III for that product.

Macrilen is the world's first noninvasive growth hormone diagnostic test.

It's all-growth hormone secretagogue ghrelin agonist.

And essentially, we're kicking off a Phase I/II pediatric trial to also get this as a diagnosis for kids in the United States where we today hold the rights.

And then on NASH, we actually decided Camilla's team and my team to start a Gilead collaboration.

We believe they are the leading hepatology company and hence they are now taking their hepatitis knowhow into NASH.

And we are now collaborating on a nonsteroidal FXR agonist and an ACC inhibitor that will be in lose combination in a proof-of-concept trial together with semaglutide.

And that's going to start next month.

And I think that -- no, I actually have one more.

This is the forward-looking flow.

We've spoken about what's happened.

I'd like to mention, of course, that on the clinical side, it's important that we're actually kicking off a number of outcome studies: a cardiovascular outcome trial called SOUL for oral semaglutide; a renal outcome trial called FLOW for Ozempic; and also a superiority-based retinopathy outcome trial called FOCUS.

And they are all starting this quarter or the next one.

I don't think I'll got through all of this rather than say that the LAI287 is an important once-weekly insulin first-in-class that can also be combined with semaglutide to create a once weekly, you can say, insulin GLP-1 combo that might actually have a very long durability successful.

Regulatory-wise, on the biopharm side, in addition to the same story, we are actually submitting Adult Growth Hormone Deficiency indication for somapacitan, the once-weekly growth hormone analogue in all major territories during the second half.

And we're also awaiting Japanese approval for Esperoct towards the end of the year.

And then we're wrapping up a number of Phase I programs in the obesity pipeline, but more about that later.

And then over to you, Karsten.

Thanks, Mads.

I think I've been through the majority of the P&L, so just hitting the highlights.

4.5% currency exchange rate sales growth and then positive currency impact, so 9% reported sales growth for the quarter.

Our gross margin is down in constant exchange rates by about 120 basis points.

There are 2 main drivers behind that.

It is U.S. pricing and then it's geo mix, so saving more in IO and less in U.S. And then partially, it's being offset by productivity and manufacturing.

Sales and distribution costs.

Investments in gross margins and gross profits that's, I'm sure, you have the same comment across many companies, but we're driving our business forward and investing in the future.

R&D, 21% down.

So we're not about to close down R&D with minus 27 in the quarter.

We have this reversal of prelaunch inventory, we call it, for oral semaglutide, standard accounting practice for Novo Nordisk and for the industry at large.

So where we have a favorable impact on -- of DKK 500 million that impacted the quarter, so adjust for that down 6% since we are kind of between trials, so closing out the PIONEER trials and starting up STEP and SELECT trials as Mads was covering.

That leads to operating profit, 8% growth and 40% reported.

Then of course, we have hedging.

So our net hedging is neutral for the quarter, so nothing big to report on there.

I think it's important to note that our emerging market currencies had been very stable in the first quarter, so the 13% growth that we -- that Mike was covering in IO is actually also turning into reported sales growth for IO.

Nothing big on taxes and net-net diluted earnings per share down 1%.

So based on the stats like that, we are confirming our outlook for the year.

We are off to a good start.

We're delivering on our plans and on our own target, so we're confirming our outlook.

The U.S. dollar has strengthened since the full year outlook guidance.

So that's why we're increasing our currency impact from 2% to 3% on sales and from 4% to 5% on operating profits.

There is an offset then, of course, on the hedging.

So the hedging is negative now at 3.3%.

The very attentive analyst reader will, of course, say how does it balance between the gain you have above the line and the hedging versus below the line.

And it is actually balancing.

We're down to the roundings, why you'll not make the simple math on 1% versus the delta on DKK 900 million.

So actually our FX hedging is neutral to the gain we have above the line for our full year outlook.

This one, I think, we've just been through.

So without further ado, and I'm not sure where the blood sugar is after a good lunch, but without further ado then we're ready to jump into Q&A.

And, Keyur, is all set?

Keyur Parekh from Goldman Sachs.

Two questions please.

First one, Mike for you on International.

I know you guys have said, we should think about high single digits, so it's kind of the underlying growth.

So just help us think about as we go into the rest of 2019 and 2020, which on the launch is coming up, do you see the pressure on the growth being upwards or downwards?

And what are the driving factors for that?

And secondly, Mads, we see big focus from investing perspective on what REWIND will show.

Your perspectives on what you expect that data to show given it'd been heated and trimmed kind of what you think we should be able to see?

But also do you think they end up their primary prevention label or do you think that's unlikely?

Keyur, under IO percentages, I think the high single digit you're making a reference to is what Karsten has referred to as 8%, 9% underlying growth for Q1.

It's not what we are speaking with for the totality of 2019.

What I have said is that if you go as back as even 2 decades, International Operations has grown somewhere between 5 to 6 percentage points year-after-year during good days and bad days.

What I feel would be just to say, we can up that historical growth rate similar to last year by about 1 percentage point.

And I get to that percentage namely by looking at the fact that in historical growth rate, we had 0 obesity sales in International Operations and we had far fewer product launches.

And these 2 elements are parts of the good growth rates we saw primarily last year and continuation of it into this year in the first quarter and one heavier.

So that is a little bit numerically.

Now to the second part of the question as what can take this up and down?

Well, we have seen a really successful uptake of Ozempic in Europe, 17 markets.

We have plans to take that further to outside of Europe and actually introduce Ozempic to some of the larger European countries.

I hope that we can continue to outperform on those launches and that each can add a plus value to us.

And Saxenda continues to impress us and not just you're getting that wrong quarter by quarter, we also internally are getting that wrong and we continue to seeing better than average growth.

And if that continues again, that I think is good.

On the negative side, I would say that we have had less than usual disasters, especially in emerging markets.

We have not had a good part of the country being wiped out due to political instability or what have you.

And there are a couple of early alerts.

If they kick in of course, they would negatively impact us.

You spoke about how currency has been on our side for the Q1?

Well, as we're speaking last night, the Turkish lira went down by 1.5 percentage points due to the dispute on Istanbul elections.

And those type of things, of course, happens as we go forward and then can negatively bring us down forward.

I think it's fair to say, we should -- I should expect out of my internal organization a percentage or so better than historical growth because I have better tools.

Yes.

And then on the REWIND.

Well normally, when I express myself in forward-looking statements and it's way into the future, I can say anything that brings into my mind almost as long as I think it's the true story.

But today we all know that a month from now or less, we're going to San Francisco to see not only a 2-hour PIONEER symposium about our wonderful all semaglutide clinical trial program, but also a couple of days in advance of that a REWIND symposium from our friends at Eli Lilly.

So I cannot speculate, but when I look at Trulicity as a molecule dulaglutide, it's a human GLP-1 with a metabolic profile, very similar to that of Victoza albeit once weekly of course.

So I would predict overall the MACE protective capabilities of dula are somewhat similar to what I would expect from molecule like dulaglutide, not too much to the tune of oral semaglutide, but I might be proven wrong, let's see.

And since the population is composed of like 70% primary prevention cohort, 30% secondary, one might argue that you will have a lot of MACE events in the primary prevention cohort.

But do bear in mind that very often in secondary prevention, you have event rates annually of to the tune of 4% or so whereas in primary prevention cohorts, typically, it will be lower.

So the absolute amount numeric of MACE events that are composed of either primary events or secondary events remains to be seen.

And I think for the FDA to take any positive action other than what they typically do for CV risk reduction indication for GLP-1s would actually demand significance on both elements in the primary cohort and the secondary, which, to my view, is maybe not that likely but again, I might be proven wrong.

So what I think we're heading for is Eli Lilly and Novo Nordisk having submitted 3 CV indication labels for 3 different products or Ozempic and dula.

And essentially, all of us trying to get a CV claim and it's almost at the same time.

So the medical review team in the endocrine metabolic division are probably right now busy looking at all these GLP-1 and locks the CV provinces.

It's Kerry Holford from Exane.

Two questions, please.

Sorry to return to peer mix in GLP-1, but on the call on Friday, you spoke this being a relatively slow moving train and that we shouldn't expect significant shifts in the remainder of this year.

But also in the call you spoke of this being one of the reasons why we're still at risk around your full year guidance.

So I guess I'd like to just iterate again your expectations for the rest of the year and why this has happened in Q1 with that shift related specifically?

And why you are relatively comfortable with that world close to remainder of the year the 1Q event only or should we think about this impacting subsequent quarters?

And then secondly on oral sema, question for Mads.

Can you just run through the decision why you filed 2 separate NDAs for that quarter, which I think is quite unusual.

So I think being assessed by 2 separate entities.

The FDA, of course, is at the risk, the priority review is not achieved, the diabetes indication that the FDA elects to wait for the CV risk decision.

Yes, and just really to understand why decide a solid way?

So I'll start out with the channel mix.

So what we're just to make sure the audience is clear on the question.

So this relates to GLP-1 pricing in the U.S. in the first quarter.

And there, we're rather counting that on average, realized -- price realization that is down and is down for -- due to 3 factors, it's down due to a donut hole that we've been out commenting for since almost a year ago.

Then it's down due to payer mix and (inaudible) would be payer consolidation in the U.S. market.

And finally, it's down due to channel mix.

And to your question specifically on channel mix, what is driving channel mix is that without being too specific, 3 main factors.

It's less utilization of a noncontracted cash business, that's one, it's more utilization in nonretail and its growth of Part D. So those 3, they are not one few in isolation, that's something that we see for the year and we expect into our guidance.

So with that, over to you, Mads.

Yes.

And in reality, when you decide to use a priority review voucher, I'll actually turn the question a little bit the other way around and say using a PLB, you actually shorten the time that the agency has to essentially regulatory dossier by 4 months.

And since the PIONEER program is huge, it's we're speaking close to 10,000 patients in 10 trials, including a CV safety trial.

Then there would actually be a sincere risk by compiling it 1 NDA that the FDA would say -- they would find a reason so as to a 3-month extension or whatever simply because it was not manageable to do the entire thing in one go.

So we've actually looked at it differently and said the CV indication for Ozempic is using SUSTAIN 6 data supported by PIONEER 6. And the CV indication for oral sema is using PIONEER 6 supported by SUSTAIN 6 bridging between the 2. That means that if we allow the regulatory teams that the FDA not allow -- if the regulatory teams had the FDA -- had the option to use 10 months in parallel on the same data sets in really supporting 2 different products, it is more likely that even with the advent of an AdComm or what might be coming that this can all be done in a beautiful parallel fashion where everybody is speaking the same language, has an insight and has good time to review the files and then action team generate then use the PLB only for the type 2 diabetes indication, also allowing Camilla and the team to hopefully start discussions with peers and so on, much that has happened such that we can get swiftly to market.

I think, over here.

Trung from Crédit Suisse.

So 2 questions for me.

One is potentially outside the potential rebate reform.

There's going to be another set of changes related to Part D in 2020.

These relate to the threshold change getting to the donut hole that's going to take a bit longer.

And then when you're through the donut hole, that's going to be taking a little bit longer going through the donut hole as well?

What is that impact Novo in 2020?

And then the second is just related to international Ozempic.

In your launch chart, you showed just there earlier, I didn't see any of -- I didn't see Germany, I didn't see Italy, France, might acknowledge there you're just talking about launching potentially in these countries soon.

Can you just give us an update where you are there?

Good.

So if I start out with the Part D rebate exposure, then you're right.

There are different thresholds in relation to the donut hole next year.

We are not outguiding for 2020 at this point in time.

And I will say, right now, it's uncertain times also with potential rebate reform in the safe harbor.

So -- but it is true that there will be an incremental impact from a longer donut hole, if you will.

And on the Ozempic, the data use SEDAR is sourced from IQVIA, which is -- right now the latest numbers are from February.

So we show basically the data that's available.

In Europe, we have had announcements on launches in Italy, in France, in Spain, actually U.K. has also, of course, been launched and I think was in the chart.

So 4 of the large 5 European launches have been announced.

Germany has not been announced because we're still in dialogue and negotiations with the German governments.

And when I know more, I can share more with you.

But the other large affiliates are already having Ozempic announced.

And then soon within a month or 2, we're moving out of Europe into Latin America, our next big launch is reserved, the single largest GLP volume market outside of, I think, outside of the U.S. -- north America.

I think we are over here.

Sachin?

Sachin Jain from Bank of America.

A couple of questions, I guess, for Camilla on oral sema.

So firstly on access level, I think ahead of Ozempic, once you've got the Trulicity access curve and the aim for them is to match that.

And in the end, you exceeded it.

Could you just give us some color on how you think of oral sema access curves related to, I think, Lars made some affiliate call of not needing same level of access with oral sema that you've achieved with gem?

So just to understand that as well.

And then the second question related to launch curve.

Again Ozempic, again, a very successful launch close to DKK 2 billion year 1. Could you just relate to what extent you can for using (inaudible) of thinking about a number for year 1, somewhere related to that Ozempic number?

Yes.

And the offset -- access uptake with oral semaglutide is clear that with the use of priority review voucher, we will have a bit more time to get the right access in place for oral semaglutide during the autumn of this year, if everything goes well.

So we do expect that over time, we should get to similar access rates for oral sema than what we see on most of our other products.

And that will be on the high side of 18.

So that's where we are, comparing one-offs, you've also seen that different institutions would like to look at the cost effectiveness of oral sema versus, you could say, most other products, including SGLT-2, DPP-4, insulin and GLP-1.

So of course, we are preparing ourselves to show the effectiveness with oral sema versus all of these compounds and that is to be expected, of course, when you bring in and you compound to the market.

And of course, at the minimum, you would need to be able to show that.

So we are quite confident with the data we had for PIONEER trials and we will be looking at that.

Then of course, when it comes to outlook for year 1, we are not guiding on the 2020 as Karsten just said, so we thank for the question, but I think you knew that we are not about to reply to that one.

But of course, we have a strong confidence in oral semaglutide, that's clear.

I think...

I'm Michael (inaudible) from Bernstein.

Can I just ask about obesity?

So Saxenda in the U.S. grew 13%.

So what is the underlying number adjusting for the destocking?

And then just following up, what's the average stay time on the drug?

It is something the companies talked about in the past.

So has that stay time changed since you first launched?

And then, the second part of the question is what do you expect this stay time to be on semaglutide in obesity?

And then the next question is on Trulicity.

So I appreciate that Ozempic is growing very, very rapidly.

But Trulicity is holding pretty firm on new-to-brand.

You're superior on weight, you're superior on HbA1c, they don't have a CV claim.

What is the feedback that you get from physicians as to why they are holding so fair?

I'll take the first one on underlying and then Camilla is taking the next.

So for Saxenda, in the U.S., there are basically 2 factors.

So it's the inventory factor we have discussed for this quarter.

And then when you look at the comparison Q1 last year, Saxenda was very strong in the U.S. also, which was also linked to, what we call, a fluke in the distribution chain.

So if you adjust for those 2 events, we're clearly about -- above 20% growth for the profit in the first quarter.

Yes.

So when it comes to stay time, you could say that stay time is around 4 to 5 months in the U.S. We have other markets where the stay time is slightly lower, (inaudible).

But in the U.S. around 4 months 5 months.

We are looking at also trying to prolong the care for patients with our -- like Saxenda care program that needs, hopefully, more support to patients than just medicine.

And with that, we have around 40% of patients engaging in that.

And we do see that, that of course drives a longer engagement with patients.

We are not only looking at our own patient support program, but we're also looking at (inaudible) with companies that are leading in behavior modification to combine that with Saxenda.

And when we do that, we do see also nice effects of being able to stay longer on the product.

And with that, hopefully, also get better, you can say, weight loss over time.

And we are expecting to publish some of these data later this year.

So we do expect that in obesity, it's not only about leading medicine, it's also about supporting patients to lifestyle behavioral changes and that's what we are working on.

With semaglutide and obesity, you also actually expect a longer stay time on that.

And I know Mads would like to comment on that as well.

Yes.

Because we speak a lot to the patients and physicians, who, in general, treat obesity.

And the 2 things they are telling Camilla and me is that a, efficacy trumps everything and when you either get to what's a plateau weight loss and you still have to inject either daily or weekly, you seem to shy away or if you are, in general, disappointed, so efficacy is important.

And the twice -- the double kick we saw in Phase II versus the open-label arm of Saxenda bodes well in terms of a expectedly longer stay time.

Add to that, that the titration phase plus the time to plateau is more than a year, unlike for Saxenda where it's 36 weeks or so.

We actually saw that in week 52 of the Phase II trial, there was an active ongoing weight loss in the patients.

So I cannot quantify the expected stay time, but it will clearly be longer than Saxenda.

And it's even aided by the fact that just the titration phase takes longer to get to the 2.4 milligrams plus all the other things.

And then I think, there was question on Ozempic versus Trulicity.

You said why?

And just to add on that, I think we've seen that every time a new GLP-1 is launched into the market, the growth in the market actually is expanding in terms of volume growth and segment growth.

And that has also happened with the launch of Ozempic.

So with Ozempic, we are driving -- our NBRx share up with around 30%.

You do see that -- and, of course, it's Eli Lilly to comment on their NBRx share is stabilizing at 11, now below the TRx share whereas ours is increasing on GLP-1 on top.

Our main prescription drivers are basically efficacy and weight.

And I think when it comes to Lilly, I think, you would have to talk to them about where their prescription drivers are on Trulicity.

But I do want to remind you that when we -- when Trulicity was launched, there was also a growth of the segment we would lose some market share on Victoza once daily versus once weekly, but it still meant that was still strong growth on Victoza.

So because of the segment growth, it seems like there is space for this -- for the GLP-1 treatment to still expand into the diabetes treatment, which is good for patients in both HbA1c and weight and potentially also cardiovascular risk profile, which is the leading cause of death of people with type 2 diabetes.

Pete?

Pete Verdult, Citi.

Just one follow-up just to Camilla's question.

Did you say that you actually gave this stay time on Saxenda.

I didn't here a number?

Excuse me, say again.

Did you give us stay time on Saxenda?

Yes.

4 to 5 months.

4 to 5 months.

Okay.

Sorry, I missed that.

In the U.S.

In the U.S. whereas we have significantly lower in countries like Brazil and other countries in between, but we normally do calculate it around 4 months.

2.5 months in Brazil -- 2.5 months in Brazil like probably around average of 3 outside of U.S.

All right.

Just 2 questions for Mads on the pipeline.

Just on the amylin analogue, can you just refresh my memory because you've probably (inaudible) clearly -- do you think sema 2.4 will hold up against GLP/GIP and you got mono-amylin analogue and combo studies on the semi-glute side.

So is this purely just in the area of weight where you want to be a new standard?

Is there any A1c angle?

And is there any ability to co-formulate?

So just a reminder of that strategy because it seems to be you're clearly talking the latter up more and more over last few months?

And then, Karsten, sorry boring question.

Just to clarify, the inventory impact that you got in Q1, is that what you expect to stay for the remainder of the year, i.e.

structural reset?

Or do you -- if we think about your guidance, are you expecting some inventory rebuild in the year?

Good.

Mads, if you want to -- I'm waiting for somebody.

Peter, yes, we are excited and, of course, we had all these household compounds in our inventory.

We test them in all the animal models, we look at combination.

Is there additivity synergy or the opposite, et cetera.

And the short version is that we have seen to refresh our minds is that over a period of 7 treatment weeks, we see a weight loss at a really tolerable dose of 7%, i.e., 1% per week.

Don't expect that to occur for a year because then people would disappear so that's not like 7. But we are expecting based on animal pharmacology and these early multiple dosing studies in humans that there is actually a sema 2.4 like label efficacy for the amylin.

Remains to be seen in the ongoing Phase II trial, but it seems to be a truly powerful agent that acts on the brainstem as opposed to sema, new type that acts on the hypothalamus, hedonic eating component.

So it seems like that GpG will prevail at least there were open studies really suggest that if you get 15 on 1 and 15 on the other, you add them together.

And we will actually have co-delivery in the pen system, so that you get both agents in 1 weekly injection.

And by the way, we are doing right now the optimization of the fixed-dose combination ratio doing a multiple dosing study that is ongoing as we speak.

I think we are in the third of fourth cohort.

Good.

And the boring question on inventory that's first you call it.

First of all, we don't control the inventory so the inventory is between us and the patients.

They are controlled by the wholesalers and pharmacy chains.

So this will be more speculation on my side more so than anything else.

What -- and where we have better visibility is to the wholesale inventories and less so to the pharmacy chains.

On what we see now is on the wholesalers that the inventories are at a low but reasonably normal level end of Q1.

And generally speaking, when I look back in the past, how much, past number of years then inventories were tend to be in the years slightly higher than what they are during the middle of the year simply due to the fact that wholesalers want to buffer, especially during the holiday season or Christmas.

So everything else equal, slightly higher by the end of the year at the wholesalers.

Peter Welford with Jeffries.

A couple of questions.

One, since finished off sort of on obesity, you switched into NASH M&A.

Can you just comment if this first of many deals, I guess, we should see where you look to study combination regimens in NASH either through, I guess, internal or external ventures.

And could you just comment perhaps as far as which sort of mechanisms could be most compatible with Novo's GLP-1 pipeline?

And then just with regards to the U.S., could you give us some sort of visibility on the -- perhaps disparity of net prices you see across the U.S. landscape that you get?

I appreciate ex -- obviously, the government and just with regards to, I mentioned -- I appreciate if there could be any details, any sort of feelings for the disparity we see on the different plans that there are?

Yes.

okay.

So vis-à-vis, the need for combination treatment in NASH, and for that matter, obesity, is clearly there.

Because if you take the drugs that are including the study that was done with the Victoza by an investigator in Birmingham, there was a placebo corrected NASH resolution of 30% for Victoza 1.8.

That was good, but it was not 100%.

So quite clearly, you need to deal both with the metabolic stress, the inflammatory stress and the fibrosis.

So you need ideally 3 different ways of targeting and also achieving higher rates of resolution.

And with Gilead, we've actually made a really nice agreement with -- I have to admit 2 metabolic acids, the FXR agonist that might also lead to fibrosis by the way.

And then the acetyl coenzyme carboxylase inhibitor.

And they are being treated in loose combination because they are all together with similar once weekly as you know.

The question is, will there be more combination study sample.

We are being contacted both by investigators and by other companies who have shown interest in doing combination studies with semaglutide that seems to be also a little bit of an unpolished gem in this area where because all the metabolic fixed people want to test it out in various combination.

Of course, what Camilla and I have done is actually lock up these 2 areas so as long as we are with Gilead on those and who hope goes all way to the end, then we're not going to do similar combinations with other companies.

But it does not rule out the other combination, for instance, with antibody products if there are some good and safe ones out there.

Good.

And then on price differences in between channels in the U.S. In the U.S., the market is characterized by having some of the highest prices in the world and some of the lowest prices in the world.

So just mapping it out then in reality we are realizing prices at list price and you see the U.S. this prices, there are probably available.

So where we'll provide pretty much no rebates apart from a small piece to the wholesalers, so that's one end of this data.

So the Medicaid-type pricing were, for instance, we had 100% rebate.

So some of the nonfederal channels are also closer to the Medicaid typesetting than this price and then you have typed the in between and the commercial channels for managed care for that.

But as you see now in your reports, our average is 68% gross to net, so rebate to the sales.

You made a reference to old sema pricing obviously taken into consideration cost-effectiveness and ISO review.

Can you just remind us on the injectable deal, if you want, for the ISO review for those?

Has there been any sort of published ISO now?

Where are those coming in (inaudible) of cost-effectiveness?

I don't recall in top of my head that we've seen in ISO review, but I could be wrong, I could take on that with you later, but in general, GLP-1's coming very strong on cost-effectiveness because we have seen significant effect on HbA1c, but also on rate.

And we know that, that drives a lot of cost -- all of these cost-effectiveness studies are based on the call model, which is you can say a validated model that is used in health economic society.

Based on the longer-term impact of lowering the risk profile for someone with severe complications of diabetes that so when you talk about cost-effectiveness often we talk about either something is cost-saving directly on why it has improved cost-effectiveness meaning you pay a little bit more to get some more and then for each threshold, different countries have thresholds that they say this is an acceptable additional pay.

But as we vote out Victoza in the old days, we generally, by that point in time, found GLP-1's are cost-effective compared to many other treatments the market.

So, Mike, one question on China.

So Gan & Lee announced a partnership with Sandoz.

They produce a similar Lantus.

So I guess just your thoughts on how credible the Chinese players are producing insulins both within China, but also then taking those insulins outside of China and then 1 for Mads quite specific question, but the GKA activated glucokinase activators.

There's a company in China who is developing the drug that I think looks quite interesting, potentially demonstrating beta-cell function improvement.

In the past, a lot of companies looked at glucokinase activators, did novel, I actually don't know what was the reason if you did locate it?

Was the reason why you drove the program and looking for a partner is that something that would be interest you?

I take the Chinese competitors very seriously.

Actually we think and talk about them all the time.

I make no secret that we are losing to the local Chinese players in China on human insulin market share and I think the million dollar question for me is how to deal with them because on one hand, you could promote your human insulin, which we're not, they are doing that.

And go after them but that promotion comes at a cost, if I would put the same amount of money and reps behind Victoza, I can make more money out of that.

On the other hand, you have a situation that if you don't do anything about it, probably human insulin is not going to go anywhere and they're going to get stronger and stronger and stronger and eventually allow themselves to grow outside of China.

So far we've done well, I would say, with our Chinese market.

This last quarter, insulin grew by 9.3% in value, 8.5% on volume.

So we are growing on par with market.

The data you looked at by the day on China is inaccurate because you are looking at IQVIA.

So we have a little bit more of a better data and on for full data, we're doing pretty okay, but we need to make sure that we find a way to deal with them, especially on the lower segment, which the fight right now is really all about.

I would say, with regards to the deal with (inaudible), it's something that we're monitoring.

There's very little information available on that.

So I cannot speculate exactly how that will be, but Gan & Lee is a company that we know well and we have been competing with in China so we'll take it as it comes.

And then maybe, Mike, want to just add that as you know Tresiba is approved in China is basically seems to be a very strong also hyperglycemia label.

We've got a translator, so we could understand.

And actually once you have that (inaudible) we have now Tresiba actually a bit of promoting Tresiba on a provincial level and have some reimbursement on a provincial level, but we're happy that the national drug lift opened up again actually and we qualify for once again a dialogue with the government on entering into the national reimbursement.

That process will happen throughout the next few months.

So Mads is very correct.

We actually do see upside on Tresiba compare maybe to a year ago because simply we did not think that the Chinese government will open up the national drug lift soon after their previous opening, which was last year.

So 1.5 year range.

Thank you for the question for glucokinase activators.

Yes, we did, but we never talked about it, but we had one all the way almost to the clinics.

Now for those who have forgotten our chemistry text books, the glucokinase enzyme is mostly active in beta cells and in liver cells, right?

So you can go down 2 routes, like have a dual activator that works in the beta cell and the liver as does the Chinese molecule to the best of my insights and then liver selective one.

We did both categories of small molecules in the old days.

They were by the way license to (inaudible) in those days.

I don't know what happened to them but anyhow so we have been there.

The short version is that if you make a dual activator like the Chinese one, yes, you might actually get beneficial effects on beta cell that add further efficacy, but you are running the risk of hypoglycemia like informed.

But so just to be crisp on that one.

And then the levels of efficacy, not to the leverage but it's around, as I see the 0.8% A1c is (inaudible) interesting if it's safe, but I'm not sure that it is something that can be lowered in license, but probably not.

I think we have a -- I just...

That's clear.

It's more about combination, that you can combine it with (inaudible)

It is true, but, for instance, it's more fun for us to combine all (inaudible) into one thing than a new unproven mechanism that might provide hypoglycemia risk, that's a dual activator.

And I think we're all the way to the back.

(inaudible).

Let me talk about GLP-1 growth is being stellar over the last 12 months.

Can you talk to the relative penetration by channel?

So how penetrated is commercial relative to Part D, relative to government?

And where do you see those topping out on an absolute basis?

Yes.

So on U.S., GLP-1 and the channels, I think instead of starving at the channels, then it's important to start with what Camilla was referring before, the market in totality.

So the market is going 29%.

So that's clock speed of the market.

So a lot of patients -- small patients are getting access to GLP-1 in the U.S., so the benefit, of course, of us and the Eli Lilly.

We have very solid market access in commercial, so the patients in commercial, they have access for the vast majority who have 85% access focus and pickup as an example.

So patients have access to it in commercial so -- and also in part B. So that is more a question about whether it's being prescribed by a physician and more so whether the channel has topped out.

So it's more a market growth-type perspective.

And then you will say in nonretail and Medicaid, so there'll be nonfederal hospital (inaudible) likes.

It is not fully reimbursed there yet.

So there's still volume potential we had in those channels for patients to have access to GLP-1 there.

Just if you're getting volume drugs and you talked about the insulins with government channel being the 100% rebate.

That's something we need to be aware of for our models going forward.

So I'm just trying to understand what proportion of growth you see from here coming from lower prices channels?

So let me ask a different way.

Do you expect the majority of your script growth over the next 3 years to come from commercial and Part D all from government channels?

So we don't want to go into detail channel forecasting externally.

The key point is, we expect continued very strong GLP-1 volume mark growth and it's being driven across the channels.

You could see the slide that we have 50% NBRx in the U.S. And the one that's driving growth is Ozempic.

And Ozempic is not right now being sold in Medicaid and so on, right?

So that also...

Mads, I have got a follow-up.

(inaudible) GLP-1 volume.

Looking at Slide 74, at the back of the plan, this is an illustrative chart.

I was (inaudible) your forecast for summer, prescription volume only get so big the injectable formulation and given the relative size of the 2 markets, obviously, I would just like to understand your thought behind the components that go into that chart.

And then secondly on concizumab, I feel that Pfizer just started once-weekly Phase III for the TFPI.

Can you confirm whether this is a once-weekly formulation is something that you look out with concizumab.

I think so far your Phase III is looking at once daily.

Yes.

So the Slide 74 -- just hold it in case anyone doesn't remember we're trying to be -- it's just illustrative, but that of course just shows you that we do expect that over time, Victoza will -- it has its stay time of roughly 3 to 4 years Victoza.

We now see that NBRx is quite some Victoza down from 40% to 20%.

On the contrary, we have Ozempic coming up from 0 to 30, so a net 10% gain in NBRx in just one year so when that solidifies into total scripts over time, then of course you would see automatically with the growth in the segment and Ozempic getting a strong share of the new staff, you would automatically see Ozempic taking over on total scripts over time.

Then at some point in time, we will launch oral semaglutide.

That of course contributes to further expanding the GLP-1 segment because now you have basically GLP-1 in a task that they can be used in a segment of the market where we have not been competing before, namely in the (inaudible) segment and that just means that we expect Ozempic and oral sema to be our strong growth drivers, of course, of the future.

That's how you should see this chart.

Yes.

And then, Camilla, I'd never be critical to you, but I think the slide proves the point that we're slightly more scientific in R&D then in the...

And of course, yes, go ahead, Mads, but over time we of course do expect that the -- by the time we get to loss of exclusivity of the process, the number of new staffs are at a relatively low level, but already today we see that 70% of the scripts in GLP-1 is done from once weekly GLP-1.

So that already you could imagine by the time you get to '20, '23 or '24, maybe a once daily GLP-1 is not what exactly (inaudible) by that point in time.

And then on concizumab, well, very briefly concizumab is an antibody that, of course, has a long half life in its own way rendering it available for once weekly treatment in Phase II however, we have the view that when you go to high levels, you actually do start seeing by chemical changes in the direction of a prothrombotic effect so will the other companies investigating this mechanism see it.

However, at the same time, we did not see any clinical adverse events at all in that regard.

So clearly, we're initiating concizumab as once daily in an ultra-fine needle -- a single use, disposable device, which is the patients really liked, but it's also an option to do once-weekly for concizumab.

Okay.

Good.

That was the last presentation.

Thanks for taking interest in Novo Nordisk.

And again, thanks for Goldman Sachs for holding this event.

So have a great day to all of you and wherever you go.

Thanks.