諾和諾德 (NVO) 2021 Q3 法說會逐字稿

Welcome, everybody. So very exciting to have a physical -- very exciting to have a physical road show. Thank you, Novo Nordisk for showing up in person. That's a novelty. I don't think, this team needs any introduction. So I'll hand over to you for the usual comments.

Thank you, Michael, and thanks for UBS for hosting us. I think it's the first time we're in this very beautiful auditorium. So I really appreciate that. And so nice to see you all in person. It's been a while for some of us meeting. So really been looking forward to this.

As a round of introduction, I think you know us, but just for good stake, our team today is a great team. It's Camilla Sylvest, who is the Head of Commercial Affairs & Corporate Strategy (sic) [Commercial Strategy & Corporate Affairs]; and Martin Lange, Head of Global Development; and myself, Karsten Knudsen, CFO of Novo Nordisk. And then we have Investor Relations officers with us to ensure that everything is conducted in good order. So we've really been looking forward to this.

In terms of practicalities, you know the drill from the last time, I think we have to go back to the first quarter of 2020 when we met last time for launch meeting. So have to get back into the rhythm, right? So we'll do a fairly brief presentation, call it, 15 minutes or something like that, and then we move into Q&A. And I promise to give you a small instruction in terms of the logistics of the Q&A for those of you who have not been in the UBS setting before.

So since the session is being recorded and webcasted, we have microphones with each chair. And so when you have a question, after the presentation, then please take the microphone and push the button. And I'm not sure if it has also built-in some kind of electric shock in case you ask more than 2 questions, but I cannot promise that, but if we can keep ourselves to 2 questions, then I think we'll have a good activity.

So in terms of our presentation. First of all, as you all know, in case there would be comments or questions around the future, then you know, the future is uncertain and actual results might differ from the forward-looking statements. So please take that into account when you assess the discussions further today.

In terms of our communications, you know our strategic aspirations. We've been very consistent with our strategic aspirations for now 2 years. It's 2 years since we had our last Capital Markets Day, more or less 23 months. And as you read in our company announcement this quarter, we have now scheduled our Capital Markets Day come March. So the 3rd of March, 3/3. So that should be worth remembering. So we hope to see you all at the event in Denmark in Copenhagen. It might even include a factory tour. We're still working on the logistics. So really looking forward to present our corporate strategy, progress on our strategic aspirations and a lot of other exciting activities in our pipeline for sure.

So where we are currently in our strategic aspirations is when we start with what we call purpose and sustainability, that's what some companies would know ESG, but we see significant progress both on the environmental agenda on CO2 emissions and continuing to drive that down 44% compared to '19. So continued focus, which is also being recognized externally.

Our social responsibility activities are core to who we are and how we operate. So apart from bringing innovation to society, then we also work intensely with ensuring and enabling access and affordability. And we do that through a number of mechanisms from a type 1 program for children with diabetes to vulnerability assessments. And of course, on the governance, continuing to work on that part. And I'd say diversity and diversity metrics has been a core focus for a longer period of time. And now -- as you have seen, now we have a more formalized target for senior leadership in the company.

Pipeline margin, we'll come back to. So I don't want to steal his thunder. I'd say of small aspects or minor aspects, the Xultophy approved in China. And actually, Xultophy could become a meaningful size product in China. So that's why we put it up here. And then as we put in our company announcement.

We achieved proof of principle with our glucose-sensitive insulin. And the glucose-sensitive insulin really holds a lot of promise for patients if we can succeed on that one. And getting to proof of principle is really a milestone for the company. There were some other aspects that informed us that in order really to take the program forward or take the technology forward, we need to refine it a bit further. So we'll do some additional work until we take it forward. But really encouraging with the proof of principle.

Commercial execution, Camilla will talk to, so I'll not cover that. We continue to progress on that. And financials, I'll be coming back to.

So when we look at our group sales, 13% sales growth on a year-to-date basis, which clearly is significantly above what we are anticipating for the year when we started out this year. So when we issued our initial guidance for the year, it was still kind of in a COVID setting with a lot of uncertainties and went with Chinese PPP impact and other health care reforms. And now some upgrades later, significant stronger pace on our topline Wegovy launch really pulling off as well. GLP-1 market also growing at a high pace. So very rapid growth.

And when we look at that growth level, then this is actually in terms of percentage growth. This is the strongest growth we've seen for more than a decade. I think we have to go back to 2006 or so, to get to the same level of growth for Novo Nordisk. And needless to say, the company today is like more than 3x the size as compared to 2006. So really, really strong growth also in the context of the industry.

International Operations, double-digit growth, we've seen that for some quarters. So we keep riding on demographics on the product portfolio, Obesity. And I'd say now, GLP-1 is really also being a key growth driver in International Operations, which is very encouraging to see. You see that on the right-hand side with 47% growth for International Operations in the first 9 months. But then I'd say, even more impressively, look at the U.S. growth rate, 13%. So our global growth of 13% is basically equally balanced between our 2 operating units, with a 50-50 more or less share of growth, and delivering 13% growth in North America when we've been through kind of renewing our portfolio and realizing, I'd say, rather low growth rate in North America for that reason for some years. And then now getting into double-digit territory is a really, really good experience and really well done by our North American team. Truly driven by, of course, the GLP-1 portfolio and our Obesity franchise there.

And then from a therapeutic point of view, GLP-1 growing 30%, accounting for roughly 75% of our total growth of the company. Insulin 2%, which is actually, if you look at the last few years, actually, fairly solid growth on our Insulin franchise also. International Operations continuing to drive growth. We actually continue to take volume market share in our Insulin business on a global scale, and then U.S. decline of 8%, mainly driven by lower U.S. realized prices.

Then Obesity, we'll come back to that 50% growth, 80-plus-percent growth in the quarter. Really, really happy to see that. We've been investing in Obesity for a couple of decades. Now we're really starting to see it step up significantly. We've seen a good momentum with Saxenda. This is, of course, even stronger. So really encouraging to see. And again, both North America and IO.

And then finally, Biopharm 4% growth. I think our Biopharm team are doing a great job in terms of driving through our latest generation products and competing to get good market share there versus competition, while holding on to our legacy products. And then as Martin will show, then we actually have a number of exciting Biopharm pipeline readouts in the coming months. So also really good momentum on the Biopharm side.

So on this slide -- in conclusion, really strong momentum on pretty much all geographies and in all therapy groups. So a really strong year thus far.

And with that, I'll hand it over to you, Camilla.

Thanks a lot, Karsten. So let's take a little bit of a deeper dive into some of the commercial aspects. And here, you see the details of our total diabetes market share, where we continue to gain share. This time, 0.7 percentage points. So we are now at 29.9%. You remember our strategic aspirations towards 2025 of 1/3 of the diabetes market, so progressing well towards that. It's really driven primarily by GLP-1 , but also by our gains in insulin volume. But then, of course, in its totality, we are gaining GLP-1 share both in International Operations and in North America.

When we zoom in to International Operations, you see here the diabetes split down on different regions. So 14% sales growth in total in diabetes in IO and then double-digit growth in both EMEA and China and in the rest of the world, as we call it. What's, of course, also interesting is on the right-hand side that you see our share of growth continues to be above our market share, indicating that we are likely to continue the momentum, a pretty strong market share increase of 4.7 percentage points versus 2020 in IO total GLP-1, our total diabetes market share -- GLP-1, sorry.

Here, you see U.S., and you see the momentum in the U.S. based on NBRx and TRx. What you see here is, of course, that we have continued to gain market share, primarily driven by Ozempic, but also by Rybelsus both on a TRx level and on an NBRx level. And then when we look at Rybelsus, in particular, you see here the uptake versus the SGLT-2 since their respective launches. We are tracking well with Rybelsus. We are gaining as part of our commercial strategy, access into the oral anti-diabetes segment where we haven't been really playing a big part before. And this is, of course, the segment that's characterized by many more, you can say, physicians in terms of concentration than where we've been operating before. Nevertheless, we see a good momentum with Rybelsus making it our second biggest growth driver with 18% share of our total growth of the company. And that is, of course, despite the fact that it has been launched during a period of COVID-19 and a number of lockdowns.

Outside the U.S., of course, in Japan, we have also a steady market share gain. Japan is still under this 2-week prescription limit and that basically means that people have to come back on a biweekly basis to have new prescriptions that we expect will be -- or it will be listed a year after the launch. So that is early next year that, that will be listed. So this is how things are working out in Japan.

Rybelsus has now been launched in 22 countries. So we are progressing well also in terms of reimbursement in the European countries on par with GLP-1.

And then obesity care, here, you see that the momentum has really come back in the Obesity business. On the left-hand side, you see the -- both U.S. and North America as well as International Operations really coming back to a very strong momentum. We now have a 73% market share. But as you know, we are more occupied with actually growing and expanding the market development, the launch of our new products into this segment than the actual market share. So it is really the size of the pie rather than our share of the pie in the current point in time.

Then, in the middle, you see the branded TRx in the U.S. And here, you see, of course, the launch uptake curve of Wegovy, which is, I think it's fair to say, a relatively C curve. And of course, some of you also know that it has been a little bit of a challenge for us to supply enough into the market towards the demand that we have seen in the U.S. And I think it's fair to say that getting to in 5 weeks where we were -- where it took us 4 years with Saxenda, that was a little bit faster than what we actually had expected. But now we are ramping up supply. And you would also see that we are actually able to fill the market faster than what we expected, and that's also part of our up adjustment for the year that we are actually delivering a bit more Wegovy than we initially thought that we could. So we will continue to ramp up on this.

Interesting is also that more than 70% of the Wegovy scripts come from people -- or prescriptions to people that are new to anti-obesity medication. So really back to our strategy of expanding the market, making sure that more people living with obesity can get access.

And then over to you, Martin.

Yes. Thank you so much, Camilla. So staying in the Obesity space, we initiated the OASIS trial. It goes without saying that in any disease area where we have subcutaneous treatment, patients are happy with that as long as we have good efficacy. But we also hear from a number of patients that an oral offering would be very, very attractive.

So to address that need, we have initiated the OASIS trial, investigating all semaglutide 50 milligram in patients with obesity or overweight, together with comorbidities versus placebo in a very lean, very small program, focusing a little bit on speed to market. The program is actually so small that we're talking about a 1,000 patients in total. In the pivotal trial, we are looking at 660 patients being randomized either to oral semaglutide or to placebo. This study will be conducted primarily in U.S. and Europe and will be sort of the pivotal trial for the U.S. -- European approval.

The idea is, obviously, that we have a lot of knowledge around the semaglutide molecule, both in the diabetes and obesity space and both in the subcutaneous and in the oral space. That allows us to bridge on historical data and allows us to have this very, very lean program. And even though the trial was initiated in this quarter, we actually expect to have finalized recruitment by the end of this month. Also, obviously speaking to the interest of the patients of going into obesity.

In the cardiovascular space, in our focus area that we call other serious chronic diseases, we've initiated the ZEUS trial. Some of you have seen that we last year bought Corvidia. Their prime asset being ziltivekimab. Ziltivekimab is an anti-IL-6 antibody, specific to the IL-6 agonist. It is that we know that there is still a very high mortality and morbidity within cardiovascular disease, some of it driven by dyslipidemia. You know the (inaudible), you know the PCSK9s. But there's still a residual risk. And a lot of that risk is attributable to inflammation.

You've also seen that by reducing inflammation in outcome stories and saw populations where -- with increased inflammation specifically as measured by IL-6, reducing that inflammation is associated with an improved outcomes to the tune of 30% to 35%. So quite dramatic improvements in this specific diseased -- very diseased cardiovascular population.

We are super happy and very excited with the ziltivekimab molecule. Some of you have probably seen that anti-IL-6 antibodies out there, they are associated with efficacy, but they are also associated with safety issues. What we've seen in Phase II for ziltivekimab, it's a very efficacious compound, reducing markers of inflammation to the tune of 90%. But at the same time, without the safety issues that we've seen in this class in previous assets. So no increased risk of infections, no increased risk of neutropenia with clinical infections, no liver infection. That's obviously made us very excited.

So we've initiated and gone directly into cardiovascular outcomes trials, looking at very diseased patients, not only with atherosclerotic cardiovascular disease, but also with kidney disease and increased level of inflammation. This is specifically the target population where we've seen that decreasing levels of inflammation has had a tremendous impact on these patients outcomes. The trial will be event driven, and we expect it to read out approximately in '25. However, given that it is event driven and given that we don't know exactly the event wait, this could be a little bit with the plus and minuses.

The interesting thing maybe is to look at the number of 6,200 patients being randomized into the trials. This is obviously lower than what you've seen in our other cardiovascular outcomes trials, those ranging from somewhere between 10,000 to 70,000 patients. This is a reflection actually of the disease -- or the severity of the disease because we do expect an event rate that is substantially higher in this population that will be normal.

So very, very exciting, very interesting. And from a portfolio and from a strategic perspective, additionally interesting because with the initiation of these 2 trials, we now have ongoing Phase IIIa activities in all of our therapy areas across our entire value chain. And that, obviously, for us is super gratifying. We initiated our journey, obviously, staying within Diabetes, Obesity and our Biopharm area. But we also wanted to move into new therapy areas as we initiated that journey 3 years ago, and already now across the board, we are in Phase III. So we are very, very happy with that.

Looking a little bit back on our Q3. Karsten mentioned glucose-sensitive insulin. If there's a holy grail in insulin treatment, it has to be glucose-sensitivity insulin. That will potentially allow patients to be without fear of hypoglycemia, but also be without fear of under treatment, so to speak. We have conducted a Phase I trial. We are very, very excited by the fact that we did establish proof of principles, showing that this molecule was, in fact, glucose-sensitive.

We had to acknowledge also that from a PK profile, if they not really live out to 1 daily dosing, and therefore, we're going back into discovery to look at the PK properties of the molecules. That's not something that concerns us a lot in the sense that this is what we've been doing for the last 100 years. For us, the most important part was to establish that we could generate glucose-sensitive molecules. So stay tuned on that one. I have to say, I find that super, super exciting.

Just want to mention CagriSema, A lot of you have seen us talk about CagriSema in the obesity space. We've also initiated a small Phase II trial. Actually, earlier this year, it's finalized recruitment because we want to investigate what can CagriSema do also in diabetes. This is potentially also very, very exciting, and the time lines for the diabetes trial will actually allow us to initiate Phase III diabetes. At the same time, we initiate phase III for obesity if the data should warrant it.

In the NASH space, not a big surprise, I think, to any of you. We did want to investigate if semaglutide would have an effect in semaglutide at all, that's the late stage of the NASH disease. We know that it's effective in F2 and F3, and we've initiated Phase III to that effect. But we also wanted to investigate F4. And we had to say, in that space, we did see, as expected, an improvement in steatosis for these patients, but not a significant improvement in fibrosis. These patients are simply too advanced. And therefore, we have decided to only pursue semaglutide in F4 in combination with other treatments. We are specifically doing that together with Gilead in 1 Phase II trial where we are looking at the Gilead compound together with semaglutide. But we are also doing our own combination trial, looking at semaglutide together with the FGF21.

So we do believe that, that is the approach in late-stage NASH and F4, that it has to be a combination. Obviously, we are very, very excited to -- in the F2, F3 space to see that our Phase III trial is recruiting very, very fast and actually ahead of our schedule.

Looking towards Q4. We are, I think, mostly looking forward to the European decision on semaglutide obesity 2.4 milligrams, but also to the decision on diabetes to consider a milligram (inaudible). As Karsten alluded to, we have a lot of readouts going into '22. This year, we have initiated a lot of stuff. We haven't been able to present you a lot of results. But already in the beginning of '22, we'll be looking in the Biopharm space towards Sogroya, towards concizumab and obviously, towards Mim8, which is going to be exciting in and of itself. We will be looking at the readout of the entire icodec program over 2022, and potentially also be looking at other interesting readouts, including the CagriSema Phase II in diabetes. So with that, back to you, Karsten.

Thanks, Martin. I think the financials has been through before. But in short, 13% sales growth, 12% profit -- operating profit growth and a 14% EPS growth for the first 9 months.

Outlook increased based on 9 months performance. So 12% to 15%, both on sales and profit in local exchange rates. And given the 3% appreciation of the dollar compared to our Q2, 1 notch lower currency impact compared to what we saw at that point in time. So now 3% negative currency impact on sales and foreign profit, mainly linked to the dollar, slightly offset by lower hedging gains for good reasons. No changes in tax rate and continued very strong cash generation for the company is driven by, of course, our increase in net profit as well as changes to our cash flow linked to U.S. rebates.

That concludes the presentation. And I think we're ready now to move into Q&A. Remember, the microphones, and Michael, you will take the lead in showing how to use the microphone.

Great. Two questions, please. One for Karsten, just going back to the margin. The way you changed the guidance over the year, obviously, until this week implied the margin decline this year and now we're more looking at a flat margin. So are we now at a point where the infrastructure is there and your topline will gear the margin going forward? Or is there still incremental need to invest to drive further growth? And I'm clearly trying to pull you into commenting on 2022, if you could.

And then a question for Camilla. Very clear that the -- or you made it very clear that the GLP-1 market growth was a lot faster -- is a lot faster this year than maybe anticipated. Just wondering if you could sort of give us your thoughts what triggered that because Rybelsus didn't get the commercial support because of the pandemic and didn't grow as dynamically as planned, yet the market developed quite positively? So any thoughts around that would be helpful.

Thank you for those 2 questions, Michael. I'll start out with the margin and commentary on that. And when you have a company growing double digits, then of course, that creates an opportunity for margin leverage. You see that across multiple companies and industries. And in our case, we also do get margin leverage in our Diabetes franchise. However, at the same time, we are building our Obesity business. And when you look at the potential and promise in our Obesity business, then we are front-loading investments in that business, and which, in a mixed way, is margin dilutive.

And the second notion is then in terms of pipeline. So now we have a fantastic opportunity with the growth rates we have to generate strong financial results and a lot of financial resources. And -- but, of course, that comes with an obligation also to have growth platforms when we get into the 30s and 40s. So part of the earnings we're generating and the cash flow we're generating, we are investing into R&D for future growth platforms. And as you see, we have an R&D margin ratio of around 12%, with an expectation of that ratio going up over time and hence, R&D investments increasing faster than sales over time. So net-net, that yields, as I also said back at our latest Capital Markets Day, that you should expect broadly stable margins in the medium term. So basically, leverage in Diabetes and investments in Obesity and in pipeline.

And on the GLP-1 market growth, specifically, if we take the U.S., as I assume you also referred to, then what we have seen is, of course, the continued expansion of the GLP-1 segment over time, and that has even accelerated a bit more now with Ozempic primarily because reps are now back in the field. So since the second quarter, we have much more presence in the field than we had last year. But what we also, of course, have seen is quite a positive momentum around the notion of semaglutide and what semaglutide can achieve, especially also around the approval of Wegovy. That's to say that there are many people living with diabetes that are also living with obesity at the same time. So in the U.S., approximately 25 million people with diabetes, where 15 million of those are also obese. So it basically means that it has probably underlined how strong of a product Ozempic is for people living with diabetes and obesity at the same time.

That being said, it is -- the growth is also further fueled by guidelines where we have seen the momentum of GLP-1s really kicking in and continues to be a treatment that is potentially a little bit underutilized compared to the efficacy that it has on both HbA1c and weight. And here, of course, the more that gets -- you can -- that understanding increases, the more momentum that will be to GLP-1. Remember that today, GLP-1 is around 8% of the total diabetes patients. And of course, that is -- there is a potential to say that more people could benefit from this type of treatment. So those are some of the key factors. I think you probably should also just mention that this extraordinary spike that you saw in the markets here before that I showed you related to the jump in June is not likely to happen again next year. So that's just 1 thing to make sure to take into account.

Thank you, Michael. Thank you, Camilla. Then, Keyur.

Hopefully, this works. Two questions, please. One, Camilla, as you look at your GLP-1 share of the market ex U.S., I think you're now at 57%, which is meaningfully higher than where you are in the U.S. So what do you see as kind of a natural upper limit for the Novo Nordisk kind of GLP-1 share in the IOs? And then separately, on R&D question, as we look at the Phase III study for zilti, how similar is the patient population in the Phase III versus kind of the Phase IIb that you guys did? Is it exactly the same? Is it any different?

Thanks a lot. So when it comes to GLP-1 market share outside the U.S., what's really important to us is to continue to drive and expand the GLP-1 segment. So a bit to what I was talking to before. The market growth outside U.S. is high, but there is still a very, very big untapped potential. And we see in many places that GLP-1 is at, we can take places like China where GLP-1 has not even started its journey yet. So there is still a momentum for us to keep building the GLP-1 market getting much better treatment to many, many people out there. And this is really the focus of what we do.

We also noticed that Ozempic has a very high preference here, simply because it has a great efficacy in terms of HbA1c. It has twice the weight loss compared to Trulicity. And then, of course, it also has quite strong cardiovascular safety profile. And so all of these things together make it a very, very relevant treatment for the type 2, that is still on a journey to be expanded in many countries despite the fact that we have more than 60 launches now in different countries outside the U.S.

On the R&D side, the 2 populations are fairly similar. The key underlying focus obviously is patients having inflammation, and also chronic kidney disease. Where they differ a little bit is on the requirement on the cardiovascular disease, where we, in our outcomes trial, have more focus on established cardiovascular disease.

So I guess just a couple of follow-ups on that, Camilla. Does that mean kind of your international -- as you look at that GLP-1 growth and the opportunity you have, should we then interpret that into numbers as confidence in IO continuing to grow the way you have delivered growth in the last few years? Should we think of it as upside to growth in the last few years? How should we think about that?

That's something that when we think about the short term, we will guide you more when we get to next year, and we'll get later to that. But of course, just as a principle, GLP-1 treatment is something that is a very, very strong treatment to people living with type 2. And you should expect us to keep on focusing on that and keep driving both with Ozempic and with Rybelsus. And it's important for us to establish both of those 2 treatments in all of the markets where we operate over time. So we continue to expand this. So when I don't comment on your market share question, in particular, it's really because we think that the market growth of this segment is the important part that we can drive. We are quite confident with a strong market share, but market share will not drive the majority of the growth in the longer term. And that's why we really are very, very keen on keep expanding to more markets and keep driving the momentum around the understanding of the benefits of GLP-1 treatment.

Wimal?

So Karsten, you mentioned Xultophy is potentially a big opportunity in China. Could you just maybe explain why? And is it to do with the patient population because they are diagnosed at a very high HbA1c versus the U.S. And so therefore, they need something quite punchy upfront. So that's the first question. And then the second one is on high dose Ozempic, maybe for Camilla. We're going to get the approval very soon. And I'm just curious how you're thinking about pricing strategy. And the reason I ask is Ozempic or semaglutide 0.5 milligram and 1 milligram are at the same price, so nonlinear pricing. And Wegovy is significantly more expensive than Ozempic 1 milligram. So could you -- are you going to follow a nonlinear pricing for Ozempic high dose? And if so, how would you be able to charge a significantly different amount between 2-milligram high-dose Ozempic and 2.4-milligram Wegovy because it's 0.4 milligrams extra drug. So just how would you be able to manage that process?

Thanks, Wimal, for those questions. So China Xultophy, so my comment was not that it's going to be a ginormous product that overtakes the world. My comment was that it is big enough to make a meaningful difference in our Chinese sales and hence, enough to mention here. And the reason behind that is, first of all, just the sheer size of the Chinese market. You combine that with the clinical profile we know from Xultophy, all the dual trials that we've done, a super attractive clinical profile. And then, of course, then we'd be looking at some other markets. So like a market like Japan, where Xultophy has actually made very good progress. And in China, now we're starting to see that GLP-1 is penetrating more and more of the market. You see the growth rates for Victoza. So having a highly efficacious product in a big market, will yield, at least according to our plans, meaningful sales potential. But of course, we are also very much focused on Ozempic and the potential with Ozempic in China in parallel with that. And then Camilla on 2.0?

Yes. On 2.0, first of all, I'd just like to say that, of course, we know from clinical trials that 80% of patients are getting good control with Ozempic 1.0. There might be then the remaining part of people that need an additional strength and that's really what we have with Ozempic 2.0 for. So we are, of course, expecting to roll that out to a number of countries to exactly build on this. But really, I just wanted to underline the satisfaction with Ozempic 1.0.

I think you will have to bear with a little bit of patience with us when it comes to pricing strategy, mainly for competitive reasons. But of course, I just wanted to underline that there are a number of markets, 3 different archetypes of markets that are sort of in the world. There are some that purely have linear, semi-linear pricing in terms of how GLP-1s are priced due to the pricing system. And then there are systems that have 2 different channels in the first place. And then, of course, systems that have reimbursed markets where, of course, on a molecule basis, things are a little more difficult to separate completely. So these are some of the perspectives that, of course, we are looking into when we are defining the price strategy for 2.0, but much more about that next year, I promise you that.

Richard?

Just following up on that, on Xultophy. Is that now more important in China than Ryzodeg given what you're seeing with VBP? Or is Ryzodeg still innovative enough to sort of avoid the clutches of VBP in China? And then a question on icodec. Just could you be a little bit more precise on timings around icodec and remind us what you're looking to demonstrate with that?

Yes. Thank you, Richard. So clearly, Ryzodeg is a top product in China. It's approved, and it's reimbursed on the NDRL and China is the biggest mix market in the world. So clearly, Ryzodeg has a very, very high priority in China. And then it's just fantastic to have Xultophy to complement with it. Of course, Camilla can talk a long time around the different segments in China and basic prescribers and mixed prescribers. So I think the market size and opportunity and complexity yields plenty of space for both compounds.

Martin on icodec?

Yes. So the icodec program is 6 trials currently ongoing. They've started recruitment earlier this year and will finalize the last 2 studies later this month. So basically, we'll see a readout of all of the icodec trials starting with ONWARDS 2 from basically first quarter '22 and onwards towards the end of the year, aiming at a regulatory submission, either late '22 or in '23.

In terms of the outcomes, I mean, obviously, it goes without saying, convenience is nice, 4 monthly injections instead of 28. That's good. But based on the Phase II data, we also have a reasonable belief that we can see both superiority on efficacy. And specifically ONWARDS 1 and ONWARDS 5 appear to look at superiority on efficacy. And at the same time, we believe that, in particular, in the maintenance period, which is obviously the majority of the patient's life, we'll also see improved glycemic profile. So if everything pans out, icodec holds the promise of better convenience, more efficacy and better [sales].

Perfect. Yes, behind there.

Karsten. So 2 questions. On VBP insulin, does your full year '21 guidance include any inventory reductions within the Q4 period ahead of the implementation of VBP? And then secondly, in terms of sort of net pricing for Wegovy, I'm thinking about this. So Doug was talking about the sort of 50% of patients who are on the bridging program at the moment. Should we expect these people to roll into like an expanded access program? And just more broadly, should we be thinking that the pricing of GLP-1s in obesity and diabetes starts to converge back to Wimal's question to sort of maximize patient experience, prescribing experience and obviously, sort of payer attractiveness?

So if I start with the first one, then you take the second one, Camilla. So as to inventory reductions in China related to VBP, we work with a range for this year, which is to cater for all kinds of uncertainties that might come down, but we have not included any material impact from VBP in our full year 2021 guidance.

And on Wegovy, we basically established the bridge programs and the co-pay programs for people who have the coverage on Wegovy to make sure that there was an opportunity, while we were working on access with the PBMs, that everyone could get back to a good coverage after that. Then -- that, of course, just means that, that's a normal process to do. We expect that when we go into next year, we will be at a place where we have the same net access that we have with Saxenda today, around 40% in the U.S.

When it then comes to the pricing in Diabetes and in Obesity, there are 2 different established channels in the U.S. in terms of how this is done. So we're basically just following down that route of anti-obesity medication and how that is priced and how that is covered, and the same for diabetes. So this is really 2 different channels, 2 different segments of people. And yet, of course, as I spoke to before, there would be some people living with diabetes that also are living with obesity. But remember, when it comes to obesity, we have 100 million people living with obesity, and then 25 million people living with diabetes, and 15 million overlap, so to say. So the underlying potential and need for treatment is big in both of those people.

Sachin.

I'll take some R&D questions for Martin, if I may. So just a follow-on on icodec. The superiority you referred to, I think, is in the Lantus comparator studies, obviously largely generic product now and you're [gunning] for noninferiority in the Tresiba studies. Is that high enough of a bar? Or would you need superiority versus Tresiba to really convince payers? Or is this sort of an ex U.S. product?

So in the ONWARD 5 trial, we actually have a mix in the comparator, and we'll have the opportunity to also be looking at -- I mean, it's a 1,000 patient study. So we'll have the opportunity also to be looking at individual comparators. But we do know that in terms of glycemic control, Tresiba is obviously a higher bar than glargine. And therefore, we've also had to design stories where we believe that we can achieve what we are setting out. So from a realistic perspective, and also because Lantus is still the biggest drug out there. It's the right comparator from a regulatory perspective and also from a payer perspective. And it's basically more important to show superiority there than -- versus Tresiba. But we will also have to be looking at what -- where does icodec go versus Tresiba and others.

I wonder if Camilla could just touch on the payer commentary on the versus Lantus in a second. But my second question for Martin is on concizumab, which hasn't really been a focus. But I wonder if you could update us on the safety of that product with the 3 thrombotic events. Obviously, Phase III data due next year, your level of excitement and how you see positioning commercially versus HEMLIBRA? And how you think about this versus Mim8 earlier in the pipeline?

So when you ask me today, I'm actually pretty upbeat about concizumab because we just finalized recruitment for the final story, which basically means that we can start doing what we call a rolling submission with concizumab already this year as per agreement with FDA. I don't think I can speak to the commercial aspect of concizumab. But just to say, it's obviously going to be a broader profile than what you see with HEMLIBRA because concizumab will work in both hemophilia A and B with or without inhibitors, and that in and of itself gives a broader profile. And obviously, again, it's too early to speculate on the efficacy profile. But I mean, what we've seen so far is suggesting that concizumab is a good and efficacious drug.

On the safety side, we put, as per agreement with the FDA, some checks and balances in, and we're not seeing any safety issues since then. And therefore, we're quite confident that this is going to be both an efficacious and safe drug.

So just to finish on that, I think Martin said it perfectly in terms of the commercial positioning, this is a compound that actually has the potential to work in the segments, both with and without inhibitors. And this, of course, makes it a really broader potential than what we've been working with, with some of our other compounds.

And you also wanted to touch upon icodec again versus Lantus in terms of now, of course, we need to see the readout of our Phase III trials. But in terms of potential, I think it's fair to say that we generally have a market share in Obesity segment that -- where there's also still, as we would say, untapped potential for growing that further. And with a compound like icodec, there is, of course, a potential to use the convenience and potentially also the efficacy factor to drive penetration in that segment. And when it comes to payers in -- details on pricing, in particular, I think that's again something we would have to come back to when we get a little closer to the launch, and we've seen the final efficacy profile.

I think, it's Jo.

Jo Walton from Crédit Suisse. Two questions for Camilla, please. Yesterday, you were kind enough to give us some sort of stay times on some of the injectables. I wonder if you could tell us a bit more about how people are staying on Rybelsus? And perhaps compare it to treatment on a GLP? Or are they staying on it and preferring it to an SGLT2 perhaps? I'm just trying to get some idea of perhaps the patient satisfaction behind Rybelsus.

My second question is just on marketing. A number of companies have told us that through COVID, they've been able to do fancy new things with data scientists in India, bombarding patients and doctors. And there's just like it's -- COVID has given them a new way of doing things. Have you found that? Can you give us any examples of what that is? And perhaps if you're doing something better than others in the Diabetes space?

So in terms of the patient satisfaction with Rybelsus, I just wanted to mention that we have really good patient feedback on Rybelsus. Some of you sometimes ask about the dosing conditions, whether that's any issue at all, we don't get particular comments on that part. It seems to be working out well. We have good patient support in terms of apps and so on are waking up with Rybelsus and things seems to, from that point of view, working out. I don't have particular information at this point, Jo, on the stay time. But maybe let me try and get that to you if we have it, it's not anything that we have been -- it's still early in the days in terms of the launch to calculate that, but we will try and come back with an estimate of that. But in terms of dropout rates, nothing unusual compared to what we've seen on other GLP-1s. So no concerns in that aspect. But let me just dig into the data and come back on that.

In terms of marketing and what we call multichannel engagement, yes, we have indeed been working on that, and it's fair to say that COVID-19 has escalated our implementation of that. So we are working actually also out of our hub in Bangalore on making sure that we develop new materials for use. I would hope that we are not bombarding anyone with it. But what we are trying to understand and learn is how we best engage people in the way that they prefer. So to do more individual engagement of physicians, all according, of course, to GDPR regulations in Europe and so on. So we have indeed been scaling that up.

And of course, we also have analytical modules to try and understand retrospectively, how the data are used and what we can learn from that. Our aim is also that we forward looking can predict better exactly what is the next best marketing, you can say, tool that we would like to apply to satisfy the needs of those we communicate with. So hopefully, we'll be able to, in this way, target physicians in the way that they prefer with exactly the information that they need.

Peter Verdult, do as fast this time around. And we're running a little bit against the clock. So Simon if you -- of course and then we have perhaps 1 more.

Peter Verdult, Citi. Two questions, Martin, sema and cagri. Is there any like extension dates from the Phase II that we might see next year? Or is 2022 just about the initiation of Phase III obesity and diabetes trials? And then just tacking on, I think, Matt has in the past told us that cagri was not -- you couldn't formulate that orally. So when might we see the first oral amylin coming into the Novo pipeline? And I'll wait for my second question.

Yes, absolutely. Unfortunately, no more data on cagri -- CagriSema in obesity. As I said, we'll have a readout during '22 on CagriSema in diabetes. And that's basically -- on the oral part, I think we've sort of discussed that it would be interesting to be able to have a combination product, both attacking the GLP-1, but also the amylin. And obviously, we are working very fast on that in our preclinical space to get it into clinical trials, without being more specific.

Can I have a more or not?

Nice try, Peter.

Just following up on Jo's question about stay time on Rybelsus. I wonder if you've now got a feel for between patients and providers preference for oral versus injectable versus agnostic between the 2. Just to give us an idea of how that's shaping up. And then on Wegovy, you said about the supply issues being eased in early 2022. I'm assuming that doesn't mean unconstrained supply from the 1st January. So could you give us an idea of the cadence of additional capacity in '22? And is your DTC campaign contingent on that supply increase?

If you cover Rybelsus preference, then I'll take the Wegovy supply chain.

Yes. So what we see in terms of preference on oral versus injectable is really very depending on preferences. So that basically means that endos, for example, they tend to prefer an injectable with a slightly higher efficacy as once weekly. And then there are -- but endos are still prescribing a significant amount of tablets. So what is important for us is to understand those that are -- have a clear preference -- the physicians that have a clear preference for tablets that are prescribing today, a lot of VBP force, for example, where clearly, with the PIONEER results, we know that the Rybelsus have much stronger efficacy on both weight and HbA1c control. So to understand who they are and then understand, of course, also getting out there to promote the benefits of Rybelsus.

In terms of concentration, it's clear, I think we talked about it before that the concentration of endos and the depth of the number of prescriptions per person is stronger in the endo segment than it is in the primary care segment. So the space that Rybelsus operates in has a much longer tail of physicians. And that is why due to COVID-19, our presence in the field with them has been a little bit hampered. But now we are back into the field and can then drive that, but it is going to be a little bit of a Boeing lift off, so to say, if I might use that analogy, that it's not going to be -- it's going to be sort of a longer-term effort to compete in this segment. But I just want to reiterate that today, we have 7% total script market share in the modern anti-diabetes segment, yet this is our second biggest growth driver of the company with Rybelsus. So just to say that, that potential is very big, and that's why it's important for us to compete in both spaces.

Thank you, Camilla. And in terms of Wegovy supply chain, as we've said before, it's something we're ramping up as we speak as fast as we can. And referring to our company announcement there, then when we get to the first quarter of next year, then we do believe that we will not be supply constrained in the U.S. marketplace. And then we have this, perhaps not the most eloquent wording in the world, but depending on demand in our company announcement, but it's basically to say that there's still a lot of uncertainties around what is a true fundamental underlying demand vis-à-vis the bridge patient support program and so on. So -- but early part of next year, we'll supply have to get going again and have the reps fully detail Wegovy in the U.S. marketplace.

As to your question on DTC, as you know, there's a time limitation for when to start DTC and we'll be crossing that limit by the end of this year. So of course, we have that in our toolbox. But most likely, we'll not go out with a giant national campaign in the first quarter of next year. I think we'll be getting going with the sales reps and other tactics and then we'll be scaling DTC as we move along.

Peter Welford, Jefferies. So 2 quick ones, I think. Firstly, on Mim8. Just returning to, I guess, the prior question, but more on -- when you could just consider the move to Phase III. It sounds as though from the call yesterday that you'll have safety data, but you won't know all the efficacy. So by the look of the Phase III design, it looks as though you're not trying to better HEMLIBRA necessarily on the dosing regimen. So do you think you'll have any insights into whether how competitive this product will be with HEMLIBRA by the time you start the Phase III? And is it possible in the Phase III to actually show differentiation? Or is that something that we should be thinking about in later studies that you'll be running in parallel?

And then just on Karsten's question on R&D. Percentage of R&D is going up. Can you just talk a little bit about what's the limiting factor at the moment for that? Is it, Martin, not having enough to do to be able to tell you to increase it? Is it, as a company, you haven't got into enough areas yet and you need to broaden your areas? Is it you can't hire enough people? Or what are the moments, I guess, is the ones holding that back in terms of the percentage if you can help with that?

I'm not sure how much Martin paid to have that question. Maybe I will have a bunch of questions...

I really want to thank you for that question.

But he owes you big time.

So on Mim8, I mean, what's happening right now, we have the Phase I/II going. And as we see cohorts reading out, I mean, the primary endpoint is safety. And therefore, we have a safety group of people looking at safety on a continuous and ongoing basis. So our decision will not be based on efficacy, but it will be based on the combination of absence of safety issues together with the PK program. What we will know when we go into Phase III is obviously the PK profile, the potency, the safety and then some biomarkers. And we are looking to have the full readout of that early next year. We'll then go to the FDA, have a good discussion and initiate the phase III program and the Phase III dosing as agreed.

We do believe that the differentiation will happen on the potential safety side. It's going to happen on the convenience side in terms of dosing intervals. We do believe that Mim8 has the potential to be a once monthly dosing. And then obviously, with the device, which is going to be an easy-to-use subcutaneous device.

On the efficacy side, we have to say that what is out there is having annual bleed rates close to 0. Obviously, that's difficult to compete in a regulatory setting. However, we also do know that what is out there is associated with breakthrough bleeds from time to time. I think it's relevant to say that we're getting on the market looking at this in a real world setting, which is quite interesting also from an efficacy perspective. And now to Karsten.

So did you notice how short Martin's answer was to make time for the budget commentary. So I think the starting point is that we are super committed to be investing in R&D also at this point in time. I think strategically, where we are as a company, where we have attractive topline growth, and we have a long runway before significant LOE on semaglutide molecule. Now it's really the time to invest in innovation for the coming decades. So there's no discussion there.

Then it's more around the how. And you could say, if you divide it up in business development, research and development, respectively, then on the business development side, that is purely a function of attractive external opportunities with the right match in terms of seller and buyer. And you could say if there were any kind of more discretionary steps in our R&D spending, then that would be linked to business development activities. So I think that is reasonably straightforward.

Then on the research side and how to scale research. And what we are doing is that we are broadening our research platforms in terms of technologies, whether it's RNAi, cell therapy, gene therapy, peptides, et cetera, oral peptides as well. So we are broadening our platform and basically increasing the number of shots on goal. So we have, I would say, very ambitious aspirations that you will hear more about at our Capital Markets Day in terms of what to achieve on the research side. But unfortunately, research and innovation is not only a function of money. It's also a function of science and creativity. So -- and to do that in the right balance, so investing more, but of course, also finding the right targets and the right compounds is where the magic happens.

And of course, when we see the opportunities, then we invest in the opportunities. I think when you look at what we're investing R&D-wise in the sema molecule across the board, that is very, very significant. So I think that is a good testament for us investing in the key opportunities at hand. And that's what we're doing in Martin shop. So when you look at our year-to-date R&D cost growth of -- if you adjust for the PRV approaching 20% R&D cost growth this year, then we are significantly stepping up. So a function of innovation and access to innovation and creating a good return. And then, of course, also respecting that we have shareholders who also expect a return on an annual basis. So all of that coming together leaves us to a place where we expect to be able to invest more or grow R&D investments more than we grow sales in the years to come.

And just to add to that, I mean, what you see is actually a broader and deeper pipeline in all of our therapy areas that we've seen for many years. So already now the investments are coming to fruition in our research area. You will see in my shop, we're going from 40,000 patients in clinical trial this year towards 60,000 patients in the coming years. And a lot of that increase is in new therapy areas. So I think across the board, we are seeing a high level of R&D investment that is actually bearing fruit as we speak. So just want to repeat, we're having Phase III activities in all of our therapy areas.

Great. I think we would love to continue, but we're running out of time. So thanks for listening in and participating in this London lunch meeting with the Novo Nordisk in connection with our Q3 results. We really appreciate all your interest and support. And thank you for the participants here. I think we'll be around for some minutes for any follow-up questions. So thank you for participating, and thanks to Michael and UBS for hosting. Thank you.

Thank you.