Novo Nordisk A/S

Good day and thank you for standing by. Welcome to the Q1 2025 Novo Nordisk AS earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 again. Please be aware that today's conference is being recorded. I would now like to hand over to your first speaker today, Jakob Rode, Head of Investor Relations. Please go ahead sir.

Thank you and welcome to this Novo Nordisk earnings call for the first three months of 2025. My name is Jakob Rode and I'm the Head of Investor Relations at Novo Nordisk. And with me today I have CEO of Novo Nordisk Lars Brorgaard Jørgensen, Executive Vice President US operations Dave Moore, Executive Vice President International Operations Mike Duster, Executive Vice President and Head of Development Martin Holtz-Lange and finally Chief Financial Officer Carsten Munchlussen. All speakers will be available for the Q&A session. Today's announcement and slides for this call are available on our website nomonordisk.com. Please note that the call is being webcasted live and the recording will be made available on our website as well. The call is scheduled to last one hour. Next slide please. The presentation is structured as outlined on slide two. Please note that all sales and operating profit growth statements will be a constant exchange rate unless otherwise specified. Please turn to the next slide. We need to advise you that this call will contain forward-looking statements. These 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 announcements for the first three months of 2025 as well as the slides prepared for this presentation. With that, over to you Lars for an update on our strategic aspirations.

Thank you, Jakob. Next slide please. In the first three months of 2025, we delivered 18% sales growth and 20% operating profit growth. I would like to start this call by going through the performance highlights across our strategic aspirations before handing over the word to my colleagues. Starting with our focus on purpose sustainability, we are now serving nearly 46 million patients with our diabetes and obesity treatments. This is an increase of almost 4 million patients compared to the first three months of 2024. Our total carbon emissions rose by 37% compared to the first three months of 2024. This was mainly driven by the acquisition of new production sites and capital expenditure activities related to expansion of manufacturing sites. These are also efforts to meet the high demand for our innovative treatments. To uphold our commitment to being a sustainable employer, we expanded the number of women in senior leadership positions to 42% compared to around 41% last year. In R&D, we completed the second and final pivotal trial, we defined two, with our next generation obesity treatment, Caclisema. We remain on track for submission in the first quarter of 2026. Recently, our application for Wigovia 2.4 milligram for the treatment of metabolic dysfunctional associated steatohepatitis, or MASH in short, was accepted by the US FDA and granted priority review. In addition, the new drug application for weight management for all semigroutide 25 milligram, or as a person would call it, Wigovia in a pill, has been submitted to the US FDA. If approved, this would be the first -in-one treatment for obesity in the US. Lastly, we are in license to early stage assets that show promise in addressing obesity and other cardamom product diseases. Martin will come back to this and our overall R&D milestones later. The quarterly sales growth is driven by both operating units. Dave and Mike will go through details later. In terms of financial details, we delivered sales growth of 18% in the first three months of 2025. However, we have reduced our full year outlook due to lower than planned branded GLP-1 penetration, impacted by the rapid expansion of compounding in the US. Nonoise is actively focused on preventing unlawful compounding, as well as the efforts to expand patient access on our GLP-1 treatments. Carson will come back to this later. We will continue to drive attractive growth and expand patient access to our innovative treatments. In the US, this includes recent initiatives with NoCare Pharmacy, Taylor Health Collaborations, and the CVS Formulary Decision. In international operations, there remains a large unmet need for patients and we are excited to continue focused commercial efforts in existing and future markets in 2025. Furthermore, we realize the significance of our global footprint, including those activities based in the US. Nonoise has a strong presence in the US with over 10,000 full-time employees across the value chain. This includes research and development and substantial manufacturing footprint. We have invested over US$24 billion in the US over the past 10 years, including ongoing expansions and improvements to our manufacturing site in Bloomington Indiana and Clayston, North Carolina. The existing US tariff does not materialize change of financial outlook for 2025. That being said, we are closely following potential tariffs on pharmaceutical products in the US. Before we move on to the particulars of the first quarter performance, I would like to update you on changes to executive management. Please turn to the next slide. After nearly 30 years with NoNoNordice, Camila Silvest decided to step down. Camila played a pivotal role in establishing our GF1 and obesity franchises and spearheaded the development of our long-term social and environmental goals. I would like to thank Camila for her meaningful contributions to NoNoNordice and wish her all the best for the future. This development has triggered several organizational changes effective 3rd of April aimed at enhancing the speed of decision making and strengthening the execution focus within our operating units. Ludovic Havgard, formerly executive vice president of Rare Disease, now heads up product and portfolio strategy. This is a newly established area designed to forge a closer connection between commercial strategy, medical affairs, and business development across all of therapy areas. Tilda Homelabuevier becomes the newest member of executive management as executive vice president of quality IT and environmental affairs. The reshuffle will also enable the more to focus exclusively on the US operations as well as Henrik Wulf on CMC and product supply. I would now like to give an update on our commercial execution in the first three months of 2025. Please turn to the next slide. As of January, North America operations and international operations were reorganized and financial reporting has been divided into US operations and international operations. More details on the regions can be found in the company announcement. In the first three months of 2025, our sales increased by 18%. The sales growth was driven by both operating units with US operations growing 17% and international operations growing 19%. Our GF1 sales and diabetes increased by 11% driven by US operations growing 10% and international operations growing 13%. International sales increased by 3% driven by US operations growing 13%. The sales increase was driven by phasing rebates as well as channel and payer mix partly counted by a decline in volume. International operations sales increased 1%. Obesity care sales increased 65% driven by US operations growing 40% partly impacted by compounded GF1s and international operations growing 137%. In both geographies growth was driven by a weak Gobi partly offset by declining Saxenda sales as the obesity care market is going towards once weekly treatments. Where disease sales increased by 3% driven by a 5% sales increase in international operations where disease sales in US operation grew 1% compared to last year. Please turn to the next slide. Today, North America remains the global patient on GF1 treatments across diabetes and obesity. Our ongoing scaling efforts have supported close to a tripling of GF1 patients reached over the past three years. We are dedicated to serving patients who need our medicines and increasing our capacity to meet their needs. By integrating the three required fill finish sites and expanding our existing capacities, we are ready to reach more patients with serious chronic diseases. With that, I'll hand over to Dave.

Thank you Lars. Please turn to the next slide. Sales of GLP-1 diabetes care products in the US increased by 10% in the first three months of 2025. The sales increase was mainly driven by continued uptake of Ozempic. Following the US approval of the flow data earlier this year, Ozempic is now the only GLP-1 receptor agonist proven to reduce the risk of chronic kidney disease in people living with type 2 diabetes and chronic kidney disease. Novo Nordisk remains the market leader in the US with more than 50% market share measured by total monthly prescriptions. Please turn to the next slide. Wigobi sales increased by 39% in US operations in the first three months of 2025. The Wigobi sales growth was driven by increased volumes which were negatively impacted by wholesale or inventory movements. This was partially countered by lower realized prices. Wigobi was around 200,000 weekly prescriptions. The total US branded anti-obesity market more than doubled with a growth rate of over 160% in the last year. The volume of compounded GLP-1s in the US is estimated to have impacted the uptake of Wigobi prescriptions and the growth of the branded obesity market during the first quarter of 2025. In February, the FDA removed somaglutide from the drug shortage list. As a result, it is now illegal under US compounding laws to make or sell compounded somaglutide drugs except with rare exceptions. Novo Nordisk is working to prevent unlawful and safe compounding of somaglutide in the US while making sure patients have access to safe, legitimate somaglutide produced by Novo Nordisk. Following the resolution of the somaglutide shortage, we have a number of initiatives to support patients with obesity seeking treatment with Wigobi. In March, we introduced SelfPay, a direct to patient delivery of all doses of Wigobi at a reduced cost of $499 per month through our Noble Care Pharmacy. Access to Wigobi for cash paying patients was further expanded in April with the announcement of collaborations with three telehealth organizations. And last week, it was announced that CVS chose Wigobi to be the only GLP-1 medicine covered for obesity on its template as of July 1, 2025. While Novo Nordisk is committed to providing patients with choice and did not pursue an exclusive formula replacement, we do believe the decision by CVS speaks to the benefits of Wigobi. These include established cardiovascular benefits noted on the Wigobi label, and we await the FDA priority review of the promising data from the Essence Trial for potential inclusion of MASH as a primary indication in the label in the second half of 2025. We will continue to identify additional ways to expand access to Wigobi. Now, I'd like to turn it over to Mike for an update on international operations.

Thank you, Dave. If you can go to the next slide, please. Sales in international operations grew by 19% in the first three months of 2025, driven by GLP-1 products. GLP-1 diabetes sales increased 13%, driven by all regions. GLP-1 diabetes sales growth was negatively impacted by periodic supply constraints. Obesity care sales grew by 137% to 6.5 billion DKK. Sales of Wigobi reached more than 5.5 billion DKK, growing at 392% driven by sales across all regions. Next slide, please. Novo Nordisk remains the market leader in international operations with a total diabetes and obesity GLP-1 volume market share of over 72%. Diabetes remains a significant global health challenge, affecting more than 550 million individuals in IO. Revelsis is now available in over 40 markets and continues to gain market share in international operations.

Meanwhile,

Ozempic remains the leading GLP-1 diabetes product within IO, having launched in around 80 markets. With improved supply, we are now fully focused on our promotional activities to further expand the number of patients reached. Also, within obesity, we see a substantial unmet need, with more than 800 million people living with obesity in IO and only a few million of these people being treated. We have launched Wigobi in around 25 countries, including three in just the last month, reflecting a greater supply availability and staying true to our commitment in reaching more and more patients. We look very much forward to rolling out Wigobi in many more markets as the year goes through. Next slide, please. Our rare disease sales increased by 3%. This was driven by sales increase in international operations of 5% and US operations sales growth of 1%. Sales of rare endocrine disorder products increased by 14%, driven by Nordotropin, and improvement in manufacturing output as well as grow your launch uptake in international operations. This is countered by a decrease of 5% in US operations, mainly driven by Nordotropin. Rare blood disorder sales decreased by 1%, driven by lower sales of NOVO7. Now over to you Martin for an update on R&D.

Thank you, Mike. Please turn to the next slide. In March, NOVO Nordisk released the headline results from Redefine2, the second and final pivotal trial with catarcema. The trial included people living with obesity or overweight along with type 2 diabetes. Redefine2 was a 68-week efficacy and safety trial with 1,206 people enrolled. People were randomly assigned to receive either catarcema, a fixed dose combination of catarolin type 2.4 mg and macrotide 2.4 mg or placebo. The mean baseline body weight was 102.2 kg. The Redefine2 trial incorporated a flexible trial protocol similar to Redefine1. After 68 weeks of treatment, assuming all people adhere to treatments, catarcema resulted in a significant weight loss of .7% compared to .1% in the placebo group. In the trial, catarcema appeared to have a safe and well-tolerated profile. The most common adverse events were gastrointestinal, with the vast majority being mild and moderate and decreasing over time in line with the GRP1 receptor agonist class. We have now completed the second and last pivotal catarcema phase 3 for weight management. We look forward to sharing more data from Redefine1 and 2 at the American Diabetes Association in June. We are on track with scaling of the catarcema supply chain and we still expect to file for the first regulatory approval in the first quarter of 2026. Building on the learning from Redefine1 and 2 trials, we have extended the duration of Redefine4, which is now anticipated to read out in the first quarter of 2026. Turning to Redefine11, we expect the trial to be initiated during the second quarter of 2025. The purpose of Redefine11 is to investigate the potential for further weight loss by prolonging the duration of the trial to 80 weeks and focusing on dose re-escalation throughout the study. Next slide please. In February, we submitted the oral thermaglutide 25 mg to the US FDA as the potential first oral GRP1 treatment for obesity. Oral thermaglutide 25 mg demonstrates an overall efficacy and safety profile similar to once-weekly injectable thermaglutide 2.4 mg. For context, I would like to revisit the OASIS-IV results. OASIS-IV was a 64-week efficacy and safety trial comparing once-daily oral thermaglutide 25 mg to placebo in 307 adults with obesity or overweight with one or more comorbidities. In the trial, adults with obesity or overweight who received oral thermaglutide 25 mg experienced an average weight loss of .6% from a baseline body weight of 105.9 kg when assuming full adherence to the treatment regimen. Around one-third of participants achieved a weight loss greater of 20% or more. Secondary endpoints from OASIS-IV demonstrate improvements in chytometabolic risk factors such as waist circumference, blood pressure, and inflammation in patients treated with oral 25 mg versus placebo. In addition, oral thermaglutide 25 mg appeared to have a safe and well-tolerated profile on par with the thermaglutide 2.4 mg. The full publication of OASIS-IV is expected later this year. Altogether, oral and injectable thermaglutide has been studied in robust clinical development programs with more than 43,000 thermaglutide-exposed patients and exposure from post-marketing use of over 33 million patients. If approved, oral thermaglutide 25 mg is expected to be the first oral DfB1 receptor agonist for weight loss. The manufacturing of the active pharmaceutical ingredient, bulk tablet manufacturing, and packaging of oral thermaglutide 25 mg are all carried out in the United States and all manufacturing steps are up and running. We anticipate the US FDA review will be completed around the turn of this year. Next slide, please. Turning to the upcoming R&D milestones, we look forward to a year with exciting trial readouts. Before speaking to the remainder of 2025, I would like to highlight some of the milestones from the last few months. In addition to the completion of R&D 2 and the submission of oral 25 mg of magnetite for obesity in the US, Novo Nordisk continues to pursue the expanded treatment optionality for people living with obesity. Although not shown in the slide, I would like to mention our newest agreements to enlicense two early stage assets for the treatment of obesity and other cardiometabolic diseases. These include a -in-class oral, non-increasing preclinical candidate in obesity, an associated metabolic disorder, and a DfB1 GIP-glucagon triple receptor agonist. The latter triple G-acid is the second triagonist in our pipeline and we expect the phase 1 results from our internal triagonist in the second half of 2025. Within RADACES, the main phases of two phase 3 A trials, real 8 and real 9, were successfully completed with Sorgroia for non-replacement indications and submitted for regulatory approval in EU. Within cardiovascular and emergent therapeutic areas, we are excited to have submitted the Essence Part 1 trial with once weekly semaglutide 2.4 mg for regulatory approval in both EU and US for the treatment of mesh and moderate to advanced liver fibrosis, namely F2 and F3. As a reminder, Essence achieved both primary endpoints. By week 72, 37% of people treated with semaglutide 2.4 mg achieved improved liver fibrosis with no worsening of steatohepatitis, while 63% achieved a resolution of steatohepatitis with no worsening liver fibrosis. To put this into perspective, the Essence phase 3 trial results are the best phase 3 results within mesh to date. In the US alone, around 13 million people live with mesh and currently have limited treatment options available. We are excited that the US FDA has accepted the supplementary new drug application and granted priority review for RIGOI to treat mesh in adults with moderate to advanced fibrosis, with a decision anticipated in second half of this year. Moving to upcoming milestones in 2025, I would like to start with a few data readouts in type 2 diabetes in the second half. Specifically, we expect the first phase 3 results from calcosema from pre-imagined 3, investigating calcosema as an add-on to basal insulin in people with type 2 and amygdala in phase 2 trials. Our upcoming readouts and clinical programs in obesity demonstrate the breadth of our pattern in both modalities and mechanisms of actions to meet the needs of patients. In addition to the initiation of redefine 11 with calcosema in the first half of 2025 that I mentioned earlier, we also expect the phase 2 readout from the once weekly GIP-GRP1 coagulantist in the second quarter of 2025. We are also very excited to initiate the phase 3 program for calcoglutide in monotherapy in late 2025. Within radices, we expect US submission for sagroia in non-replacement indications in the second quarter of 2025, as well as regulatory submissions from MyMate in the US and EU in the second half of 2025. Lastly, we look forward to the readout of the EVOKE and EVOKE PLUS trials in patients with early Alzheimer's disease. With that, over to you,

Karl. Thank you, Martin. Please turn to the next slide. In the first three months of 2025, our sales grew by 19% in Danish corona and 18% at constant exchange rates, driven by both operating units. The gross margin decreased by 83.5, decreased to .5% compared to .8% in the first three months of 2024. The decrease mainly reflects amortizations and depreciations related to casulence, as well as costs related to ongoing capacity expansions, partially countered by positive product mix driven by increased sales of DLP1-based treatments. Sales and distribution costs increased by 12% in Danish corona and by 10% at constant exchange rates. In US operations, the cost increase is mainly driven by promotional activities related to VigoV and Osempic. In international operations, the increase is mainly related to VigoV launch and promotional activities. Research and development costs increased by 20% in Danish corona and 19% at constant exchange rates. The increase in cost is mainly driven by obesity care and reflecting increased late-stage clinical trial activity, as well as increased early research activities. Administration costs increased by 5% both in Danish corona and at constant exchange rates. Operating profit as a consequence increased by 22% measured in Danish corona and by 20% at constant exchange rates. Epidia increased by 23% in Danish corona and by 21% at constant exchange rates. Net financial items showed a net loss of 1.8 billion Danish corona compared with a net gain of 72 million Danish corona last year. This primarily reflects losses on its currencies and financing costs related to the funding of the Catalan transaction. The effective tax rate was .6% in the first three months of 2025 compared to .4% in 2024. Net profit increased by 14% and diluted earnings per share increased by 15% to 6 kroner and 53 euro. Free cash flow in the first three months of 2025 was 9.5 billion Danish kroner compared to 5 billion Danish kroner in the first three months of 2024. Free cash flow is reflecting higher net cash generated from operating activities, partially countered by increased capsule expenditure. Capsule expenditure for property planning equipment was 13.4 billion Danish kroner compared to 8.4 billion in 2024. This was primarily driven by investments in additional capacity for API and finished capacity for both the current and future injectable and oil products. We have returned 36.7 billion Danish kroner to shareholders mainly as dividends in the first three months of 2025. Following the step up in CapEx investments in 2025, NU Norsk is not conducting a share buyback program. An authorization to the board of directors to buy back shares was however in line with previous years adopted at the annual general meeting on 27th of March 2025 should the initiation of a share buyback program later be deemed relevant. For 2025, the range for sales growth is now expected to be 13 to 21% at constant exchange rates. Given the current exchange rate versus Danish kroner, sales growth reported in Danish kroner is expected to be 3% lower than constant exchange rate growth. The new range reflects lower than planned penetration of branded GLP-1 treatments in the US impacted by compounded GLP-1s. The outlook reflects expectations for sales growth in US operations and international operations mainly driven by volume growth of GLP-1 based treatments for obesity and diabetes. Following the US FDA removal of semacrotide injectables from the drug shortage list, the sales outlook assumes a reduction in patients on compounded GLP-1 treatments during the second half of 2025. The updated guidance reflects several efforts already on the way as mentioned by Lars, Mike and Dave. Operating profit growth is now expected to be 16% to 24% at exchange rates. Given the current exchange rates versus Danish kroner growth reported in Danish kroner is expected to be around 5% lower than at constant exchange rates. The updated expectation for operating profit growth primarily reflects the lower sales growth outlook partially accounted by reduced spending. No one always expects net financial items to show a gain of around 0.9 billion Danish kroner. This is mainly driven by expected gains on hedge currencies, primarily the US dollar, partially offset by interest expenses related to funding of the debt-financed capital and transaction. The effective tax rate for 2025 is still expected to be between 21 and 23%. Capital expenditure is still expected to be around 65 Danish kroner in 2025, reflecting expansion of the global supply chain. In the coming years, the capital expenditure to sales ratio is still expected to be low double digits. Precise flow is now expected to be 56 to 66 billion Danish kroner, reflecting the lower than expected sales growth, mainly driven by lower volume growth of GLP-1 treatments in the US. All of the 2025 expectations are based on assumptions that the and regional macroeconomic and political environments will not change significantly business conditions for New Norse during 2025, including changes in tariffs and duties. The announced tariffs currently in effect do not materially change our financial outlook for 2025. However, a potential expansion or increase of tariffs may have a negative impact on and our industry. That covers the outlook for 2025. Now back to you Lars.

Thank you Carsten. Please turn to the final slide. The performance in the first three months of 2025 with 18% sales growth reflects that nearly 46 million people are now benefiting from our treatments. Further, we progressed our R&D pipeline, including completing the final pivotal trial for our next-generation obesity treatment for the summer. We have reduced our fully outlook due to lower than planned GLP-1 penetration, which is impacted by the rapid expansion of compounding in the US. I am confident in our recent initiatives in the US to support patients to seek the benefits of our GLP-1 treatments. Furthermore, the obesity opportunity remains large in its naturations and look forward to reaching more patients with the additional rollouts of BGobi globally. At No Noise, we will continue to focus on commercial distribution, the progression of our R&D pipeline and expansion of our production capacity. In the pursuit of treating more people living with serious chronic diseases. With that, I would like to hand over the word to Jacob.

Thank you Lars. Next slide please. And with that, we're ready to take the Q&A where I kindly ask all participants to limit her or himself to one or maximum two questions, including sub-questions. With that operator, we are now ready to take the first question.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To restore your question, please press star 1 and 1 again. We will now take the first question. And your first question comes from the line of Richard Fosser from JP Morgan. Please go ahead.

Hi, thanks for taking my questions. Two please. First one on the compounders in the US. You've obviously done a partnership with HIMS, but HIMS themselves are suggesting that they will continue to personally compound and have a significant contribution to their business from personal compounding. That seems to be at odds with the partnership and at odds with your commentary of trying to reduce compounding and it only allowed in rare circumstances. Could you just talk about how you expect that to go and how you expect to deal with that in the second half? And then a second question, if I can, please. Just on the competitive effects from Monjaro, you're seeing on IO. And how easy you expect to be able to grow a Zempic once the supply constraints in IO are removed. How ready is that? Thanks very much.

Thanks a lot, Richard. Two questions for Dave and Mike respectively. Let's start with the first question on compounding and next steps and hand it over to you, Dave.

Thank you. And thanks for the question, Richard. To be clear, we do not support unlawful compounding. We are against the illegal importation and the continuation of compounding in the United States. As you mentioned, we did announce collaborations with telehealth providers. The reason for this is increasingly people living with obesity are seeking healthcare through telehealth companies. And we need to be where patients are and to have an offering for the real Wigobi. These collaborations allow a link to Noble Care Pharmacy where the real Wigobi can be available through these telehealth companies. As we've mentioned, on May 22nd, we fully expect the FDA to enforce the law. And at that time, we will continue to fight against unlawful compounding, for example, mass personalization. Thank you. Over to you,

Mike. Thanks very much, Dave. Richard, I think to answer your question, I'll split it in between Ozempic and Wigobi. So we have Ozempic since 2019 launched and now in 80 markets across I.O. So a very decent footprint, I would say, in many, many countries. We have been launching Wigobi a bit due to the supply constraints, not at the speed we wanted to. Also partially because we were servicing and maintaining, of course, the patients that were on Ozempic. But now, starting from this year, as the supply constraints are lifted, we have seen an acceleration like you would not have seen before. Just in the last couple of months, six new launches and more to come as we go forward. In terms of sheer number of prescriptions and volumes, if I just give you a couple of data points, we have currently 64% volume market share on injectable GLP-1. So on the back of Ozempic and Wigobi. And that 67% market share is rather stable. So it's not going down. And we, of course, hope to be able to continue fueling that with these so-called new launches, as well as, of course, getting back to promoting Ozempic much more assertively than we have been during the constraint period.

Thank you, Mike. And thank you, Dave. And also thank you to Richard. With that, we are ready for the next set of questions,

please. Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead.

Great. Thank you for taking your questions. So one on the guidance and one follow up on the compounding pharmacy. So on the guidance, if we sort of assume a similar second quarter as in the first quarter, then the scenarios for progression in the second half are quite wide with around 8% growth at the bottom end and 22%, 23% growth at the upper end. So could you reconcile the potential outcomes? What are the most important variables there? And what are the key assumptions for both ends of those variables? And secondly on compounding, you mentioned there's having a significant impact. But have you got any surveys of what you think how many patients might drop off versus switch to branded and then the branded switch to rego-V versus switching to epitide? You mentioned you have factored that into the guidance. Just wondering how much that is factored into the guidance. Thank you.

Thanks a lot, James. And on the first one on guidance, we'll go to you, Carlton.

Yeah. Thank you, James, for that question. Yes, I think for the dynamics we see in our business, then we delivered 18% growth in the first quarter. And then of course our aim is to continue to drive that attractive growth. And that entails increasing script trends in the US and continuing to drive GF1 franchise in IO. So specifically to the guidance ranges, this means in terms of the patients on compounded products, we'll go to branded products in the second half of this year. And we will be able to enable that through the CASH channel and NovoCare and the Taylor Health collaborations. We also do have a little update with the MASH we spoke to before, classic commercial tactics, and then of course the CVS collaboration. So the acceleration to deliver our guidance is mainly in the second half of the year when we talk about US, while in international operations we will see a continuous step up over the coming quarters in terms of sales growth. So that takes us to kind of the basic fundamental of our guidance range. And I would say on compounding specifically, given that the data quality on number of patients on compounding is not very high, then it's based on market research where we're looking at one million or more patients on compounded GF1 today. And then we've made estimates based on how many patients will either be able to benefit from the personalized exception or will drop off treatment. And as a consequence, the rest will go to a branded product. So a number of assumptions, but we have a lot of tactics in place to be able to capture patients that will no longer be able to have a compounded product with effect from the second half of this year, given some patients will also have inventories in place personally and therefore the second half comments. Thank you, James. Thank you,

James. That also covered part of question two. Anything from you to add, Dave, on what we see currently in terms of magnitude of compounding potentially split on branded GF1 treatments as well?

Yeah, thank you, Jakob. I will share that with you. The market research that Karsten mentioned also gives us an idea that certainly semaglutide is overweight. We estimate 70% of compounding is of semaglutide. But I'd like you to focus on three things, three actions that we're taking to ensure that we're effective in this transition as compounding starts to wind down. Number one, we expand the cash offering. The $4.99 via Noble Care Pharmacy was purposeful and planned at the time when compounding would start to diminish as well as the collaborations with telehealth companies. And soon that cash offering will be available in all 9,000 CVS stores. Number two, we continue to expand better coverage for Wigobi. This helps for some of those patients that may be on compounding that insurance and would have access to Wigobi for a low copay. And number three, as Karsten mentioned, we have targeted commercial efforts aimed at patients and healthcare practitioners so that we can focus on semi-safety of real Wigobi versus compounding as well as the availability and the affordability. Thank you.

Thanks a lot, Dave, and also thanks to you, James. With that, we're ready for the next set of questions, please.

Thank you. Your next question comes from the line of Peter Sardot from BMP Paribas. Please go ahead.

Thank you, Peter, from BMP Paribas. Lala Karsten, two quick ones. I suppose I'm still struggling just to understand where the disconnect has been with respect to your messaging given at February C&D in London about commercial execution being management's top priority and the prescription trends we've seen since then, especially when you have, as you said, 40 million commercial lives where most patients probably only have to pay $25 a month to get access to Wigobi and you've been smashing it with ETC and rep. So is it really only about the compounders or do we have to consider your nearest branded competitor doing a better job? And then more quickly and secondly, just your thoughts on the recent orthoglipron diabetes data, especially given scalability doesn't seem to be an issue there. So thanks very much.

Thanks a lot, Pete. I think both of those go to you last, but let's start with the first one on commercial execution as a priority.

Yeah, thanks, Pete. You're right. This has been our focus for some time. But I think it's important to say that when you assess that based on script trends, it is really, really difficult as there is a significant share of the business turning into being compounded. And we estimate that, you know, that's a similar amount of business as what we have in the US on DLP1. So I think they've outlined our tactics and we feel honestly very confident that this is the right moment for us to make a serious change in the market. And that's baked into our guidance for the second half of the year. And I think also the point that CVS actually choose our brands without us paying for exclusivity is a sign that there is very strong perception around Wigovia in the market. The added benefits we have on top of the real world experienced weight loss is great. And that is just getting even better, assuming we get the mass indication as well. So what you get in one product here is just very, very attractive. In terms of Orfu, I think there's been a lot of interest in how the all category will develop. It's clear for us all along that we have the head start here. We have not pushed it as hard as we do now until we have ramped up manufacturing. We have seen significant scaling and efficiency step up in our API facilities in the US. And when we submit the data to SDA, you can assume that we have what it takes to do a full launch in the US. And Ben Ryan, as was also alluded previously, this is a molecule with tremendous safety data, so more than 30 million patient lives. And I think we shouldn't belabor that point as physicians and patients make choice on a trusted product. And of course, the efficacy is similar to what we have with Wigovia. So really, Wigovia is in a pill. I think it's a very attractive offering and assuming positive outcome with the agency. We're ready to give this a big push and also on this point show a very strong commercial execution. So thank you, Pete, for that.

Thanks a lot Lars and thanks a lot, Pete, as well. And with that, we are ready to the next set of questions, please.

Thank you. Your next question comes from a line of Martin Parkoy from SCB. Please go ahead.

Yes, good afternoon, Martin Parkoy, SCB. Just two questions just last coming back to CVS again, because one of the buzzwords that you have used for many years now is optionality. And I can understand that CVS is a win for Novo, win for Wigovia. But do you think it's a win for patients in the US to lose optionality and exclude another obesity product? Then secondly, also back to the -or-semi 25-milligram. I just understand that you said that you can run with full steam when you launch. But what kind of opportunity do you see? How big part of the market would actually like to have Wigovia in a pill instead of Wigovia as we know it today?

Great. Thanks a lot for those two, Martin. And I think again, both will go to you, Lars. So firstly, on the CVS one.

Yes, thank you, Martin, for the questions. You are right that we support optionality and open access to products. We believe it's in the best interest of patients and physicians that they can make the choice for the patient. And different patients have different needs, so we support that. So this is a situation where it's not a decision made by us. We have not made a bid on an exclusive contract, but it's a choice that CVS has made. We appreciate the partnership we have with CVS over many years. And as Dave also alluded to, it's a partnership that now also includes our cash program in the 9,000 CVS outlets. So it's their choice. So it's not really something we have a say in. But of course, we do appreciate the perception about the product and what it can. And I think it talks through the real-world experience of Wigovia. And of course, for a payer, what is the tangible value of reducing the risk of cardiovascular disease? And hopefully also, near-term, say, the best mesh profile you can think about. And getting all of that in one product is very, very attractive from a payer perspective. In terms of the all opportunities, I think it's important to note that it is about competition within a category of those we prefer and all. We believe a majority of patients would still benefit the best from being on injectable therapy. That's where you get typically efficacy. And also, we have learned over the past few years that weekly injection is actually very, very convenient. Having to deal with your disease once a week in a very simple device solution is very convenient for patients. I think physicians are nowadays very comfortable in prescribing injectable. Having said that, there are patients who prefer an all. And we are pleased that we can compete very well in this segment. We believe it will be way smaller than the injectable segment. And being first to the market with a known molecule, known efficacy, known safety. And also, some try to say that it's not convenient. In our view, it is very convenient. You wake up in the morning, you take a tablet with some water, and you're ready for your day. So we believe we can play very well in a smaller segment compared to the all injectable category. And we'll be first assuming a positive regulatory outcome.

Thank

you,

Martin. Thank

you, Lars. And thank you, Martin. And then we're ready to move on to the next question,

please. Thank you. Your next question comes from the line of Michael Niedelkowicz from TD Cowan. Please go ahead.

Thank you for the questions. I have two. My first relates to potential political risk. The current administration in the US has at times singled out GLP-1s when it raises the issue of apparent price disparities between the US and other countries. NOVO is presumably deep into negotiations with CMS about the IRA price discount for some agglutides starting in 2027. Do you sense any risk if the administration plans to take this as an opportunity to make an example of GLP-1s and demand a particularly severe price cut? That's my first question. And then my second question relates to the pipeline and specifically in McCreighton. I believe NOVO has been in discussion with the FDA about phase three planning for an obesity trial, but the R&D milestone slides not include a trial start in 2025. Can you tell us whether a phase three trial for Emma Cretton could yet start this year? And when a phase three obesity trial does start, has a decision been made as to whether the oral or subcutaneous formulation would be advanced first? Thank you.

Yeah, thanks a lot for those two, Mike. Again, I think for the first one, we'll go to you, Lars, on GLP-1 price negotiations.

Yeah,

thank

you, Michael. So when you look at it, if you take WIGOVI first, we have very limited WIGOVI exposure in Medicare so far. And if you take some of the other, say, O or governmental funded channels like VA and Medicaid, those are channels with somewhat lower price point and I think more comparable to what we see in other geographies. If you look at OCEMPIC, obviously there's a bigger share of business in Medicare, and that's then what's being discussed under the IRA. And I cannot go into specifics around it because it's still relatively early days, but I think there is an established mechanism in dealing with that. So I would actually say from an overall political risk point of view, I actually think we're in a good spot because our book of business pricing exposure is either lower or is already in ongoing pricing negotiations compared to perhaps other products that sit in parts of Medicare with higher price point or has not yet been opened up for negotiations. So I see relatively limited, say, additional risk compared to what we're already facing. Having said that, it is still early days and an ongoing process.

Thanks for that, Lars. And for the second one on amycrotin, we'll hand it over to you, Martin.

Yeah, thank you very much for the question. So not a lot of new to add from last quarter, as you know, the process is to submit an end of phase two package specifically to the FDA, but also to other regulatory authorities. We are in that process and respect an outcome within the next couple of months. Then we will know, and this is what we plan for, this is what we expect if we can progress into phase three. And that phase three program will be initiated with current amnesty into one of next year. And the focus for the phase three program will be both all and injectable.

Thank you, Martin. And thank you, Mike. And then we are ready to take the next set of questions, please.

Thank you. Your next question comes from Faction James, Bank of America. Please go ahead.

I'll take my questions. I'm just going to try and push Kirsten and David to the topics if there's any more color you're willing to give. So firstly, on the compounded sema sort of patient funnel, Kirsten, will you just give us any color as to what you're seeing for inventory in the system? We've heard estimates as anywhere between three and 12 months. And then any color on what percentage you expect to shift to branded, given that they're on compound because they can't afford it or it's not covered. And then I'm going to be provocative on the branded catcher. Some of what we hear is as these patients come off compounded sema, cash patients may prefer, let me give a cheaper syringe and vial strategy and that bound perception, efficacy, safety is beginning to edge with Gobi. So I know that's provocative, but I wanted you to just touch on that. And then finally, a lot of what we've discussed has been the obesity market. But I wonder if you could touch on a Zempic. I'd assume limited compounding impact, markets slowing down, you're losing shares to Monjaro. So it's not exactly clear to me what changes that second half. Thank you.

Thank you, Sachin, for those two questions. On the first on compounding, we'll hand it to Karsten and then we'll hand it over to Dave, anything to add before Dave goes on to the second question on Zempic. But firstly, over to you, Karsten.

Yeah, thanks Sachin. And I wish I could give you like razor sharp data points based on high quality market data. But this is a fairly young segment in terms of data and market research. So you're correct that within telehealth, the setup is more towards a subscription basis on three, six, nine, even 12 months, where patients get the incentive through a lower subscription rate if they sign up for a longer period of time. So yes, most likely there'll be some patients sitting with the inventory on May 22. We don't have really good data on that. But that's also why we're cautioning in our outlook section of our company announcement that the market should expect a step up mainly in the second half of this year from compounding and of course, the CVS contract. As to brand and drop off to different solutions, price sensitivity, etc., I'll hand that over to Dave on the in-market understanding of that one. Over to you, Dave.

Thank you. Thank you, Carson. We believe the strong label of Wigobi as well as the brand awareness of Wigobi and the fact that the semi-compounded is overweight. We think that there is certainly a focus with healthcare practitioners to maintain that continuity of care. And what we've heard is the availability of branded Wigobi through these new channels, meeting the patients where they are is a very important step in terms of that transition and funneling of patients. As Carson mentioned, of the total number of compounded patients today, some will drop off. But certainly, as you mentioned in our guidance, we do expect to capture and see a real interest in patients coming over to the real Wigobi. And then I'll shift over to Ozente. As we're seeing this year so far, the growth of the GLP-1 class, it does continue. It's lower than what we've seen in years past at 15%. But that still leaves plenty of opportunities, still a runway for future growth. And this continues to be a game around NBRX and our commercial leverage. So here are the things that we're focused on in the US with Ozente. First of all, our overarching commercial focus is leveraging the Ozente label, the broadest of any GLP-1 label on the market and continues to be the most widely known GLP-1 as well. Our commercial efforts during this year include the launch of a new campaign called the Ozempic Era Campaign. We are in the Ozempic Era and our patients are experiencing that and that the understanding of the broad label is something that now both patients as well as physicians understand. And then lastly, we continue to focus on decreasing the outflow, meaning maintaining longer stay time and having patients have the full effect in getting to the middle of the grand dose. Thank you.

And just building on Dave's comment before we hand it back to Sir Jakob, then for Ozempic, also our market research indicates a certain level of compounding, not a lot, but potentially in the mid single digits of GLP-1 diabetes treatment in the US. So after May 22nd, there might also be an uplift there to go forward and benefit with the tactics that Dave just covered.

Thank you, Carsten. And with that, I think we are ready for the final set of questions, please.

Thank you. Your final set of questions come from the line of Jo Walton from UBS. Please go ahead.

Thank you. You've talked a lot about pricing and your strong commercial focus. Could you give us an idea of what you think a typical price point would be for a compounded samaglitide and how far adrift that is of the $500 that you're charging? The reason that I ask is, I assume that this is a price sensitive market, and yet the starter dose from your competitor is only $350. And I wonder whether people just can't move, step up from whatever they're paying today up to that $500 and the $350 is a very compelling starting point for the compounder. Could I also just ask if you could tell us what the average stay time is now that you've got less of a supply constraint, whether you're seeing that obesity stay time get longer or whether you're still having to reacquire patients every few months? And if nobody minds, I'd also like to take this opportunity to let people know that after 40 years as an analyst, this is my last purely farmer sell side call. Novo was one of the first companies outside of the UK that I covered back before the merger of Novo and Nordisk, so I really am that old, but it'll soon be time for me to move on. I have a couple of projects I need to complete before I leave the UBS team fully in Matthew's very capable hands, but I want to say it's been an enormous privilege to watch the development of many life cycles of drugs and to work with so many people in Novo and other companies, clients and competitors, many of whom I'm very proud to count as friends.

Thanks a lot, Joe, and first and foremost from team Novo, thanks, congratulations on a very impressive career. On your two questions, let's move to Dave. Dave, first of all on GOP1 pricing for the real begovia as well as for compounded ones and then on stay time.

Yeah, thank you for the question and also congratulations to you. There are a range of prices that we hear in the marketplace and it really does depend on whether or not that is a bundled price with a telehealth company in terms of offering their telehealth services as well as medicine. As you pointed out, it is less for the compounded GLP1 than what we're seeing in terms of the cash prices, no question. When we think about the funnel and when we talked about the guidance and expectations that Karsten mentioned, certainly we do expect some patients not to transition, meaning they may be on a compounded GLP1 and they may not transition over to a branded medication. One of the things that's important for us though is to ensure that we are educating around the availability of a goby through commercial insurance. We have over 55 million Americans that have coverage for a goby where they would receive the medicine for a low cost, so we have a lot of people that are on a compounded GLP1 and they're not on a branded copay. What we've learned is many patients on compounded GLP1 do have insurance, so educating them, doing insurance verification as part of our commercial efforts is also important. Then to answer your question on stay time, the current 12 months average stay time is around 7.4 months. That continues to increase as the brand grows and more and more patients continue with their therapy over time. Thank you.

Thank you, Dave and thank you, Joe. With that, we are done with the Q&A please and I'll hand it over to Lars for a set of final remarks.

Thank you, Jakob. We delivered 18% growth in the first quarter driven by our innovative treatments and we had to lower our guidance for the year because of how big compounding has been of semaglutide. I hope you feel we have a clear plan for how to counter that, close that down and really use our commercial taxes outlined today to gain a fair share of those patients. We remain very confident in the market opportunity, the number of people with obesity willing and interested in seeking care and as we scale capacity and progress with our R&D pipeline, not least all semaglutide, 25 mg and I would also say upcoming data for clacosemma. We feel really excited about our opportunity in this space. So I close with that and also thank Joe and wish you best of luck for the future and thank you all for participating in this call. Thank you, bye bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.