Novo Nordisk warns of U.S. legislation, cautious on 2018
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[November 01, 2017] By
COPENHAGEN (Reuters) - Drugmaker Novo
Nordisk forecast only muted growth in 2018 and warned that draft
legislation in some U.S. states to make pricing more transparent could
impact business in its largest market.
The warning over U.S. state legislation comes after fears that
President Donald Trump's healthcare policies could hurt the industry
have diminished somewhat during the year.
"Trump has repeated a number of times that he believes the industry
gets away with murder, obviously we don't agree," said Lars
Fruergaard Jorgensen, chief executive of the Danish company.
But at the state level, more and more legislation was being prepared
to increase clarity around prices, he said.
"If the transparency bills lead to a disclosure level that is too
excessive, it becomes difficult to do business, for instance, if we
have to publicly share what is in our contracts," Jorgensen said.
The comments came after the world's top maker of diabetes drugs
nudged up its forecasts for the full year after reporting better
than expected third-quarter operating profit.
However, its shares slipped 2.9 percent by 0935 GMT on the back of
more cautious than expected guidance for next year and weaker
third-quarter sales, especially for its Tresiba and Levemir diabetes
Novo Nordisk said it expected only low to mid single-digit sales and
operating profit growth next year.
It narrowed its 2017 sales growth forecast to 2-3 percent from 1-3
percent and lifted the range of its operating profit growth outlook
to 3-6 percent from 1-5 percent, all measured in local currencies.
NEW GROWTH HOPES
With its established diabetes treatments in the firing line
especially due to U.S. price pressures, Novo Nordisk is pinning
hopes for growth on new obesity drugs and a once-weekly injection
and tablet version of its semaglutide diabetes drug.
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Novo makes most of its money from its daily Victoza drug, but its
bestseller is still losing market share to rival Eli Lilly's
In the short term, Novo Nordisk hopes to reverse this trend as it
has now updated Victoza's label with the claim that the drug reduces
the risk of cardiovascular events.
Such a label is a first for so-called GLP-1 drugs. These drugs are
not insulins but an imitation of an intestinal hormone that
stimulates the production of insulin.
In the longer term, Novo Nordisk is taking aim at Eli Lilly with its
own weekly injection semaglutide, which is expected to be approved
in the U.S in December with launch early next year.
"We believe we have the ammunition needed to turn this around,"
The firm posted a quarterly operating profit of 12.04 billion Danish
crowns ($1.88 billion) compared with an average 11.95 billion crowns
forecast in a Reuters poll of analysts.
(Reporting by Stine Jacobsen; editing by Louise Heavens and Keith
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