Novo confident of strong drug pipeline and future growth- CEO

Denmark’s Novo Nordisk has a stronger development pipeline of new drug candidates than it has ever had before, and thinks it can keep delivering the strong sales growth of the past decade, its chief executive said on Tuesday.

The company, which is the world’s largest insulin producer, has grown sales by 13 percent on average for the last 10 years, and it aims to increase its numbers of patients to 40 million in 2020 from 23 million in 2012.

Novo has no long-term sales target, but it has a target for its operating profit to grow by 15 percent per year.

“I believe we have never had as strong a pipeline as we have right now,” chief executive Lars Rebien Sorensen said at the company’s capital markets day in Hillerod near Copenhagen.

In the third quarter Novo Nordisk had a market share of 27 percent of the global diabetes care market, which is worth around $42 billion per year. France’s Sanofi and U.S. company Eli Lilly are its main competitors.

Sorensen said future sales growth would primarily come from China and from the International Operations (IO) region, which includes 140 countries outside of Europe, China, Japan, Korea and North America.

Sales from those areas are expected to continue to grow at a rate of around 15 percent in the next five to 10 years.

“Growth in United States, all uncertainties taking into considerations, is likely to go down a little bit to between 15 and 20 percent,” Sorensen said.

The United States stands for roughly half of the global diabetes care market, and Novo has increased its share of the market significantly over the last decade to around 29 percent.

“We have a market share in the U.S., which is slightly less of what we think we could have long-term. Therefore we expect high growth there,” chief operating officer Kaare Schultz said.

He said he believes the so-called glucagon-like peptide-1 (GLP-1) diabetes drugs, such as Novo’s Victoza, will become a larger part of the U.S. market than the current 9 percent of the market.

Growth in Europe and Japan is expected to remain low.

Novo Nordisk faced a setback earlier this year when the U.S. Food and Drug Administration asked for further clinical studies for its Tresiba diabetes drug, delaying its potential launch until 2017 at the earliest.

Shares in the company were up 0.6 percent on Tuesday having risen 7 percent in the last 12 months to trade at 19.1 times 2013 earnings, compared with Sanofi at 13.8 times and Eli Lilly’s multiple of 17.2.

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By Teis Jensen