Novo Nordisk A/S

Welcome to this Novo Nordisk earnings call for the full year of 2021 and outlook for 2022. I'm Lars Ruhrgaard Jorgensen, the CEO of Novo Nordisk. With me today I have Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Silvestre. Executive Vice President and Head of Product Supply, Henrik Wolff. Executive Vice President and Head of North America Operations, Doug Lange. Executive Vice President and Head of Development, Martin Holst Lange, and finally, Chief Financial Officer, Carsten Mohn Knudsen. All presenters will be available for the Q&A session. Today's earnings release and the slides for this call are made available on our website, knownnordisk.com. Please note that this call is being webcasted live, and a recording will be made available on Known Nordisk's website. The call is scheduled to last one hour. Please turn to the next slide. Presentation is structured as outlined on slide two. Please note that all sales and operating profitable statements will be at constant exchange rates unless otherwise specified. The Q&A session will begin in about 25 minutes. Please turn to slide three. As always, I need to advise you that this conference 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, please see the company announcement for the full year of 2021 and the slides prepared for this presentation. Please turn to the next slide. In 2021, Illinois delivered double-digit sales growth and progressed on all four dimensions of our strategic aspirations. I would like to highlight a few today. Within purpose and sustainability, we continue to take action on our social responsibility strategy, Defeat Diabetes, with a focus on access and prevention. In 2021, we reached almost 35 million people living with diabetes with our treatments. More than 5 million of these received treatment through our access and affordability programs. From an environmental impact perspective, we have also progressed. In 2021, our CO2 emissions across operations and transportation decreased by 43% compared to 2019. Finally, To underline our commitment to offer an inclusive and diverse working environment, we launched a global gender diversity aspiration. The purpose of this is to achieve a balanced gender representation across all managerial levels by the end of 2025. Martin will come back to the specific key milestones within R&D, but I would like to briefly share my overall perspectives. By the end of 2021, we had ongoing phase three clinical trials within all our therapy areas. 2022 will be an exciting year with multiple interesting readouts from our R&D pipeline. Following a productive partnership since 2019, we acquired Boston-based Dicerna Pharmaceuticals and their innovative RNA interference platform in 2021. Dicerna's RNA interference technology platform is complementary with Nordic existing technology platforms. The acquisition supports our strategy of using a broad range of technology platforms across all our therapy areas. We expect to start clinical development with the first target in 2022. In 2021, we deliver double-digit sales growth, reflecting solid commercial execution across geographies, as well as across diabetes, obesity, and biopharm. Regarding the supply situation for Begovi, Henne will provide an update later. The commercial progress across all therapy areas will be covered by Camilla and Doc. Lastly, leaving financial to Carsten, we are pleased with a sales growth of 14% and operating profit growth of 13% in 2021, both measured at constant exchange rates. With that, I give over the word to the Hiller Fund update on commercial execution.

Thank you, Lars, and please turn to slide 5. In 2021, our total sales increased by 14%. This sales increase was driven by both operating units with international operations growing 14%, and North America operations also growing by 14%. GLP-1 sales increased 32%, driven by North America growing 25%, and international operations growing 52%. Insulin sales increased by 1%, driven by 6% growth in international operations, partially offset by a 9% sales decline in North America operations. The U.S. insulin sales declined by 9%, driven by lower realized prices and a decline in volume. Obesity care sales grew 55% overall. In international operations, Saxenda sales grew 52%, and in North America operations, obesity care sales grew 57%. In the U.S., obesity care sales grew 58%, driven by both Saxenda and Bigobi. Biofarm sales increased by 4%, driven by North America operations, growing 6%, and international operations growing by 3%. Please turn to the slide, please. In line with our strategic aspirations of reaching one-third of the diabetes value market by 2025, our sales growth within diabetes care of 13% is faster than the overall diabetes market. Thereby, we have improved our market share by 0.8 percentage points to now 30.1%. The increase in Flex GLP-1 growth of 32% and market share gains in both operating units. Currently, Ousembic has now been launched in 72 countries and Rebeltus in 29 countries. Please turn to slide 7. In international operations, diabetes care sales increased by 14% for the full year of 2021, driven by all geographies and therapy areas. GLP-1 sales increased by 52% in 2021, and Novenoris remains the market leader in international operations with a GLP-1 market share of 58.9%. reflecting an increase of 5.2 percentage points compared to just one year ago. This is driven by share gains across geographies and overall just one share of growth in international operations of 74%. Please turn to the next slide. Biopharm sales grew by 4% in 2021. This was driven by 6% sales growth in North America operations and 3% sales growth in international operations. Rare blood disorders grew by 9%, driven by uptake of launch products, espirox and bifixia, as well as NOVA7 and NOVA8. Specifically, hemophilia A products grew by 25%, hemophilia B sales by 25%, and NOVA7 by 4%. Rare endocrine disorders sales declined by 2%. The declining sales reflected additional patients increasing by 5%, offset by North America operations decreasing by 12%. And now over to Henrik for an update on the supply situation.

Thank you, Camilla. Please turn to the next slide. Following up on the conference call in December 2021, I would like to provide you with an update on the Vigovi supply situation and our latest capacity expectations. I would like to start by recapping the situation. Put simply, Novo Nordisk produces the active pharmaceutical ingredients and does the assembly and packaging in-house for Vigovi, while formulation and filling is for now done by a large contract manufacturing organization. In close collaboration with the CMO, we were on track to ramp up capacity and meet demand for Vigovi in the US. Unfortunately, as you know, the CMO received a 483 letter from the US FDA addressing CGMP issues at the production site for Vigovi searings. Therefore, the CMO had to temporarily stop deliveries and manufacturing to correct the compliance issues. Since December, we have worked hard to optimize our internal capacity. Consequently, we now expect that our internal capacity in the first half of 2022 will be close to the demand of around 20,000 weekly total scripts as seen in the U.S. market in the end of 21. This is an improvement compared to the previous communicated 60 to 90% range. While the CMO has yet to resume production, we see good progress and have a constructive collaboration in place and still expect that we will be able to meet U.S. demand for Vigovi in the second half of 22. Outside of the U.S., we have submitted the already existing PDS290 platform for regulatory review in the European Union and expect a decision in the second half of 22. Working with two platforms will provide additional flexibility for future launches. With that, I would like to hand over to Doug.