Novo Nordisk A/S

Hello and welcome to the Q4 2020 NOVA Nordisk A S earnings conference call. Throughout the call participants will be in listen mode only and afterwards there will be a question and answer session. Today I'm pleased to present Lars Fruhgard Jorgensen. Please go ahead with your meeting.

Thank you very much. Welcome to this NOVA Nordisk full year 2020 and outlook for 2021 earnings call. I'm Lars Fruhgard Jorgensen, the CEO of NOVA Nordisk. With me I have our Chief Financial Officer, Karsten Munk Knudsen, and our Chief Science Officer, Mads Kroosgaard-Thompson. Also present and available for the Q&A session is Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camille Silvestre. Today's earnings release and the slides for this call are available on our website, knownnoise.com. Please note that this call is being webcasted live and a recording will be made available on Known Noise's website. This call is scheduled to last for one hour. The presentation is structured as outlined on slide 2. Please note all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified. The Q&A session will begin in about 25 minutes. Please turn to slide 3. As always, I need to advise you that this call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors including the uncertainties around COVID-19, please see the company announcement for the full year of 2020 and the slides prepared for this presentation. Please turn to the next slide. Nordisk has also been challenged in the last year from COVID-19. During this period, our key priorities have been to safeguard our employees, continue the supply of life-saving medicines and support societies around the world. We believe we have successfully delivered on these priorities while also delivering on our strategic aspirations. Nordisk has taken important steps towards reaching our strategic aspiration 2025 on all four dimensions. We launched our social responsibility strategy Defeat Diabetes and raised the ambition on renewable power to include our direct suppliers. Later, Mads will elaborate on the successful year within innovation and therapeutic focus. For commercial execution, we have increased our market share in diabetes and have progressed on obesity and biopharm aspirations. Lastly, on financials, both sales and operating profit grew by 7% at comparable exchange rates, and we continue to provide attractive capital allocation by returning 37 billion Danish kroner to shareholders. Please turn to slide 5. Before we move on to the particulars of this full year performance, I would like to update you on changes to executive management. After more than 30 years with Novo Nordisk and 20 years as Chief Science Officer, Mads Kortgaard-Thompson will retire from his current position by the end of February 2021 and take up a position as CEO at the Novo Nordisk Foundation. This leaves the role as CEO at a time where Novo Nordisk pipeline is strong and the entry into new therapy areas is on track. As a consequence and in accordance with succession planning as of 1st of March R&D will be reorganized into two separate areas. One of which is research and early development headed by Marco Schindler who is promoted to executive vice president and chief science officer. The other area is development headed up by Martin Lange who is also promoted to executive vice president. In a time where we are broadening our technology platforms and expanding our research into adjacent disease areas, markers will play a central role in bringing higher levels of innovation across all therapy areas, thereby ensuring that our business continues to be sustainable in the decades to come. Furthermore, with more projects and a broader strategic therapy area focus than ever before in our history, development is essential for ensuring that our portfolio of innovative drugs and devices The 10% sales growth at comparable exchange rates was driven by 10% growth in software operations, where all areas and therapies supported growth, and North America operations growing by 3%. Sales growth was driven by growth across all therapy areas. Diabetes care grew by 8% despite insulin sales decreasing by 3%, reflecting lower realized prices in the U.S. Tier 1 sales increased by 29%, driven by a 32% sales growth in international operations and a 28% sales growth in North America operations. Obesity care sales grew by 3%, driven by international operations, partly offset by North America operations. Sales growth was negatively impacted by COVID-19, driven by fewer patients initiating treatment. Biopharm sales increased by 1%, driven by international operations. Please turn to slide seven. We aim to reach one-third of the global diabetes value market and we are now at 29.3%. This increase is a reflection of GLP-1 market share gains. For insulin, we have increased our volume market share by 0.7% in the last 12 months, which was driven by market share gains in EMEA and rest of the world. Since 2019, we have increased our GLP-1 market share by around 3% to over 50%. This is driven by market share gains in EMEA, rest of world and the U.S. Further, it reflects the global uptake of Osempic and launches of Rebelsus in nine countries. Please turn to slide 8. The U.S. GLP-1 volume market continues to grow around 30%, driven by once-weekly GLP-1 products. With uptake of Osempic and the launch of Rebelsus, Nordisk has new-to-brand market share leadership of 57.1%, and is the market leader with around 50% market share measured in total prescriptions. Please turn to slide 9.

Since the initial focus launch, the Rebelsus uptake has been on par with that of select SGLT2 launches.