WEBVTT - Novo Nordisk CEO Talks Earnings, Product Competition

0:00:02.560 --> 0:00:08.719
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. So Novo has been

0:00:08.720 --> 0:00:13.160
<v Speaker 1>facing increased competition from compounding pharmacies of your drugs in

0:00:13.200 --> 0:00:16.560
<v Speaker 1>the US. The shortage is now over, so those compounded

0:00:16.640 --> 0:00:20.000
<v Speaker 1>versions won't be selling after May twenty second, your CFO

0:00:20.040 --> 0:00:22.400
<v Speaker 1>Tol Bloomberg earlier today that you expect to see a

0:00:22.440 --> 0:00:24.919
<v Speaker 1>step up in business as a result. But at the

0:00:24.960 --> 0:00:28.840
<v Speaker 1>same time, you lowered your full year forecast this morning

0:00:28.920 --> 0:00:31.479
<v Speaker 1>due to that increased competition, and I wonder how we

0:00:31.480 --> 0:00:33.519
<v Speaker 1>should be thinking about squaring that circle.

0:00:35.440 --> 0:00:37.640
<v Speaker 2>Yeah, you're right that we are now in situation where

0:00:37.720 --> 0:00:41.000
<v Speaker 2>we can supply the domain in the US and if

0:00:41.040 --> 0:00:43.479
<v Speaker 2>they has taken us off the drog shows list, and

0:00:43.560 --> 0:00:47.239
<v Speaker 2>that means that it's illegal to do compounding, so that

0:00:47.280 --> 0:00:49.800
<v Speaker 2>has to stop, and that creates the opportunity for us

0:00:49.840 --> 0:00:54.560
<v Speaker 2>to drive a bigger growth in the scripts for the legitimate,

0:00:54.800 --> 0:00:58.800
<v Speaker 2>high quality product from Norman Audis. And when we lower

0:00:58.840 --> 0:01:01.960
<v Speaker 2>the guidance for the folio is really because of what

0:01:02.000 --> 0:01:04.960
<v Speaker 2>the impact was of compounding in the third quarter and

0:01:05.440 --> 0:01:08.120
<v Speaker 2>probably also a bit into the second quarter, and we

0:01:08.160 --> 0:01:10.440
<v Speaker 2>have a relative steep compared to in the second half

0:01:10.440 --> 0:01:14.240
<v Speaker 2>of the year. So you should see this this guidance

0:01:14.440 --> 0:01:17.319
<v Speaker 2>as one of us really stepping up in the second

0:01:17.319 --> 0:01:19.240
<v Speaker 2>half of the year and getting to more and more

0:01:19.280 --> 0:01:22.760
<v Speaker 2>patients and really moving forward in a business environment with

0:01:22.840 --> 0:01:26.280
<v Speaker 2>a much much lower compounded share of the business really

0:01:26.319 --> 0:01:30.119
<v Speaker 2>down to the rare cases where personalized is really needed,

0:01:30.240 --> 0:01:32.480
<v Speaker 2>no bulk compounding taking place.

0:01:33.120 --> 0:01:34.959
<v Speaker 1>And so I mean, at the same time, this is

0:01:35.000 --> 0:01:37.600
<v Speaker 1>good news for Novo, but it's also good news for

0:01:37.680 --> 0:01:41.040
<v Speaker 1>your competition, Eli Lilly, who also has been facing increased

0:01:41.040 --> 0:01:44.480
<v Speaker 1>competition from compounders. So I mean in terms of the

0:01:44.880 --> 0:01:47.919
<v Speaker 1>sort of doopoly that's developed between Eli Lilly and between

0:01:47.920 --> 0:01:50.760
<v Speaker 1>Novodoor Risks when it comes to the GLP one market,

0:01:51.000 --> 0:01:52.920
<v Speaker 1>how do you see that playing out now that the

0:01:53.040 --> 0:01:54.960
<v Speaker 1>era of compounding seems to be ending.

0:01:56.720 --> 0:01:59.000
<v Speaker 2>Yeah, I think it's a good point. It's really important

0:01:59.080 --> 0:02:04.080
<v Speaker 2>for no compounding because if you have an environment where

0:02:04.560 --> 0:02:09.520
<v Speaker 2>you can compound pattern protected branded products, basically.

0:02:09.200 --> 0:02:10.240
<v Speaker 3>That's the end of innovation.

0:02:10.600 --> 0:02:13.359
<v Speaker 2>So of course this is a benefit for both our

0:02:13.560 --> 0:02:16.320
<v Speaker 2>competition ourselves that this is now moving out of the

0:02:17.240 --> 0:02:19.720
<v Speaker 2>of the equation and then it's back to really drive

0:02:19.840 --> 0:02:23.320
<v Speaker 2>growth of the market. Together will really be only serving

0:02:23.360 --> 0:02:26.560
<v Speaker 2>a fraction of the market. Uh, you know, a few

0:02:26.560 --> 0:02:30.160
<v Speaker 2>million patients living with obesity. So now it's back to

0:02:30.160 --> 0:02:33.440
<v Speaker 2>the classical commercial tactics explaining the value of the brands,

0:02:33.560 --> 0:02:36.519
<v Speaker 2>explaining the benefit of being on treatment. Of course, we

0:02:36.639 --> 0:02:40.720
<v Speaker 2>encouraged by the fact that we have the only obesient medicine,

0:02:40.760 --> 0:02:45.080
<v Speaker 2>will label that it protects for card rescue disease, and

0:02:45.120 --> 0:02:48.160
<v Speaker 2>we'll also expect in the second half the year to

0:02:48.200 --> 0:02:51.399
<v Speaker 2>have if they approval for a labeled.

0:02:51.080 --> 0:02:54.000
<v Speaker 3>Benefit of mass this fed delivered disease.

0:02:54.880 --> 0:02:58.320
<v Speaker 2>Where we really have the best data, best evidence of

0:02:58.360 --> 0:03:01.000
<v Speaker 2>any product in the market, and this is a significant

0:03:01.000 --> 0:03:03.640
<v Speaker 2>no medical need somewhere asmissed you about how we can

0:03:03.680 --> 0:03:04.959
<v Speaker 2>drive growth of the mark going forward.

0:03:05.440 --> 0:03:08.239
<v Speaker 4>Lars, our own Bloomberg intelligence analyst, take a look that

0:03:08.680 --> 0:03:12.120
<v Speaker 4>Eli Lilly has surpassed on Novo Nordisk for the obesity

0:03:12.120 --> 0:03:14.400
<v Speaker 4>market share by fifty three percent. Now they're beating you.

0:03:14.919 --> 0:03:18.919
<v Speaker 4>How do you compete when your products are relatively the same.

0:03:20.919 --> 0:03:24.200
<v Speaker 2>Well, I think they are different in a number of aspects,

0:03:24.240 --> 0:03:26.400
<v Speaker 2>and I would just like to underline that when you

0:03:26.440 --> 0:03:29.960
<v Speaker 2>look at the global supply of deal one products, where

0:03:30.000 --> 0:03:32.240
<v Speaker 2>we are really serving the mark based on our simple

0:03:32.240 --> 0:03:35.600
<v Speaker 2>gluetide molecule. Globally, we have two thirds of the world market,

0:03:35.680 --> 0:03:37.880
<v Speaker 2>so two thirds of all patients are on treatment from

0:03:37.960 --> 0:03:39.080
<v Speaker 2>low noise, so.

0:03:39.000 --> 0:03:41.640
<v Speaker 3>We are the leader in the globally.

0:03:42.160 --> 0:03:44.520
<v Speaker 2>Of course, short term it's difficult to assess the real

0:03:44.560 --> 0:03:48.320
<v Speaker 2>competitiveness when you have compounded products, and we happen to

0:03:48.360 --> 0:03:50.680
<v Speaker 2>believe that perhaps compounding has developed in to say a

0:03:50.720 --> 0:03:53.400
<v Speaker 2>third of the market, so that is as big as

0:03:53.640 --> 0:03:57.480
<v Speaker 2>a business from US, So we of course hope to

0:03:57.520 --> 0:04:00.000
<v Speaker 2>get our fair share of that back and that will,

0:04:00.400 --> 0:04:03.440
<v Speaker 2>you know, I think, create a stronger and more fair

0:04:03.480 --> 0:04:06.360
<v Speaker 2>representation of the underlying competitiveness of the brands in the market.

0:04:06.640 --> 0:04:09.080
<v Speaker 4>Along the same lines, you and Lily are also very

0:04:09.160 --> 0:04:13.280
<v Speaker 4>much focused on an oral pill to fight obesity as well.

0:04:13.920 --> 0:04:16.320
<v Speaker 4>How are you going to price this product and so

0:04:16.520 --> 0:04:17.400
<v Speaker 4>keep it competitive?

0:04:19.200 --> 0:04:19.839
<v Speaker 3>Yeah, you're right.

0:04:20.279 --> 0:04:23.040
<v Speaker 2>We have submitted to the FDA here back in February

0:04:23.640 --> 0:04:28.920
<v Speaker 2>the first all obesity medicine of a GP one, so

0:04:28.960 --> 0:04:32.480
<v Speaker 2>we are head of competition here. We expect a regulatory

0:04:32.680 --> 0:04:34.800
<v Speaker 2>decision around the turn of the years, so we can

0:04:34.880 --> 0:04:36.920
<v Speaker 2>launch in the beginning of next year in the US.

0:04:37.360 --> 0:04:39.919
<v Speaker 2>And this is a product that basically basically it's a

0:04:39.920 --> 0:04:43.040
<v Speaker 2>begovi in a pill, so it comes with the figacy

0:04:43.120 --> 0:04:46.159
<v Speaker 2>of Regovy and it comes with the proven safety that

0:04:46.240 --> 0:04:48.200
<v Speaker 2>comes from having more than thirty million.

0:04:48.200 --> 0:04:49.839
<v Speaker 3>Patient years of data.

0:04:50.440 --> 0:04:52.800
<v Speaker 2>And I think that's a tremendous body of evidence for

0:04:53.240 --> 0:04:57.120
<v Speaker 2>clinicians and for patients to really go to ificationous treatment

0:04:57.720 --> 0:05:01.000
<v Speaker 2>that's also safe. And we've all are submitted again here

0:05:01.000 --> 0:05:04.080
<v Speaker 2>the CUD of escual protective data, which is something competitions

0:05:04.240 --> 0:05:07.760
<v Speaker 2>does not have. So if you can see safety, proven

0:05:07.760 --> 0:05:11.159
<v Speaker 2>track record and CV benefit, those would be key selling

0:05:11.200 --> 0:05:12.279
<v Speaker 2>points for us.

0:05:12.680 --> 0:05:14.640
<v Speaker 1>Well, let's talk a little bit more about the competitive

0:05:14.720 --> 0:05:18.400
<v Speaker 1>landscape because earlier this month you had CVS drop lily

0:05:18.560 --> 0:05:21.640
<v Speaker 1>zet bound as a preferred drug on one of their lists.

0:05:21.720 --> 0:05:24.800
<v Speaker 1>You also partnered with CVS to increase the use of

0:05:24.920 --> 0:05:27.920
<v Speaker 1>way GOVY and I'm interested here, Lars, have any other

0:05:28.040 --> 0:05:32.120
<v Speaker 1>PBMs beyond CBS Care March approached you with request to

0:05:32.200 --> 0:05:35.080
<v Speaker 1>do some more of these exclusive access deals. Is this

0:05:35.120 --> 0:05:37.599
<v Speaker 1>something that you're looking to replicate in the future.

0:05:39.760 --> 0:05:41.840
<v Speaker 2>Yeah, you're touched on a great point here. We have

0:05:41.920 --> 0:05:46.599
<v Speaker 2>a long term, stronger partnership with CBS, and I think

0:05:46.640 --> 0:05:52.320
<v Speaker 2>it's important to note here that is a classical demand

0:05:52.400 --> 0:05:57.240
<v Speaker 2>from a payer like CVS and other PBMs to ask

0:05:57.360 --> 0:06:01.120
<v Speaker 2>for exclussivity. But it's important line here that we did

0:06:01.160 --> 0:06:04.680
<v Speaker 2>not bid for an exclusive position, and I.

0:06:04.640 --> 0:06:06.320
<v Speaker 3>Think it's it's it's.

0:06:06.160 --> 0:06:09.960
<v Speaker 2>Not something that's attractive for the manufacturers in the in

0:06:10.440 --> 0:06:12.600
<v Speaker 2>the market. So it might be that there's a man

0:06:12.720 --> 0:06:15.680
<v Speaker 2>demand for it, but I don't think PBMs will will

0:06:15.720 --> 0:06:17.280
<v Speaker 2>actually get bits.

0:06:17.400 --> 0:06:19.440
<v Speaker 3>That's a link to actressivity.

0:06:19.160 --> 0:06:22.200
<v Speaker 2>And we did not bid that here either. So I

0:06:22.200 --> 0:06:25.200
<v Speaker 2>think it's important to to underlign the the partnership we

0:06:25.240 --> 0:06:27.160
<v Speaker 2>help with SEVERS because I think that's the trusted the

0:06:27.240 --> 0:06:29.719
<v Speaker 2>relationship and the fact that they actually chose with GOV

0:06:30.240 --> 0:06:33.320
<v Speaker 2>based on the experience they have in the market of

0:06:33.400 --> 0:06:36.600
<v Speaker 2>weight loss, the CV benefit and also, as I mentioned,

0:06:37.000 --> 0:06:40.919
<v Speaker 2>mass is an important new indication for us to potentially

0:06:40.960 --> 0:06:44.080
<v Speaker 2>get on label later this year, and that's a real

0:06:44.680 --> 0:06:47.880
<v Speaker 2>health issue. And here you get saying one product the

0:06:47.920 --> 0:06:52.640
<v Speaker 2>best mass data that's ever been shown, and you get

0:06:52.640 --> 0:06:54.920
<v Speaker 2>it in the in the price you're already paying for

0:06:55.160 --> 0:06:57.160
<v Speaker 2>for we GOOB. I think that's a really really good

0:06:57.200 --> 0:07:01.920
<v Speaker 2>deal for a payer, hitting more birds with one stone,

0:07:02.160 --> 0:07:02.960
<v Speaker 2>so to say.

0:07:03.360 --> 0:07:06.040
<v Speaker 1>Appreciate that context there. It's hard to talk to any

0:07:06.080 --> 0:07:08.920
<v Speaker 1>CEO without talking about politics in this moment, and that's

0:07:08.960 --> 0:07:11.880
<v Speaker 1>exactly where I'm going to go right now. We've heard

0:07:11.880 --> 0:07:15.640
<v Speaker 1>from the Trump administration that they're thinking about considering tariffs

0:07:15.680 --> 0:07:18.240
<v Speaker 1>on farm a broadly, and I'm curious about how that

0:07:18.280 --> 0:07:20.280
<v Speaker 1>could affect no vote artistic.

0:07:20.360 --> 0:07:21.760
<v Speaker 3>I know that you have some.

0:07:22.000 --> 0:07:25.400
<v Speaker 1>US manufacturing presence, of course with the cattle lit deal.

0:07:25.720 --> 0:07:28.640
<v Speaker 1>Are you thinking about shifting even more production to the

0:07:28.760 --> 0:07:33.000
<v Speaker 1>US or even potentially stockpiling certain drugs? What does your

0:07:33.040 --> 0:07:34.400
<v Speaker 1>planning look like right now.

0:07:36.120 --> 0:07:38.480
<v Speaker 2>Yeah, that's a great topic, and it's one of those

0:07:38.520 --> 0:07:41.400
<v Speaker 2>that's a bit difficult to predict right now because there

0:07:41.400 --> 0:07:44.960
<v Speaker 2>are quite a number of different messages coming out. If

0:07:45.000 --> 0:07:47.480
<v Speaker 2>you look at our all manuffacting footprint, that's one of

0:07:47.640 --> 0:07:51.880
<v Speaker 2>having invested significantly in the US. You know, specifically, we

0:07:51.920 --> 0:07:56.560
<v Speaker 2>invested twenty four billion dollars in the US say operations

0:07:56.760 --> 0:08:00.760
<v Speaker 2>over the past ten years. We have moderntier thousand people

0:08:01.080 --> 0:08:03.800
<v Speaker 2>working for US in the US, and we actually produce

0:08:03.960 --> 0:08:07.480
<v Speaker 2>and export more from the US than we import to

0:08:07.560 --> 0:08:11.880
<v Speaker 2>the US. So when other companies were moving manufacturing out

0:08:11.880 --> 0:08:14.679
<v Speaker 2>of the US to perhaps save tax, that was actually

0:08:14.720 --> 0:08:16.800
<v Speaker 2>a time where we started dropping down and investing in

0:08:16.840 --> 0:08:19.600
<v Speaker 2>the US. So we have api manufacturing in the US.

0:08:19.640 --> 0:08:21.960
<v Speaker 2>We have field finished products. And when you talk about

0:08:22.240 --> 0:08:25.920
<v Speaker 2>an all businity treatment like THEGOVI in a pill, that's

0:08:25.960 --> 0:08:28.400
<v Speaker 2>actually one hundred percent produced in the US. The API

0:08:28.560 --> 0:08:30.800
<v Speaker 2>is made in the US, the tableting is done in

0:08:30.840 --> 0:08:33.200
<v Speaker 2>the US, the packaging is done in the US, so

0:08:33.240 --> 0:08:37.080
<v Speaker 2>it's really a US made product to Americans. So I

0:08:37.120 --> 0:08:40.360
<v Speaker 2>think we have a good setup. Like all global companies.

0:08:40.400 --> 0:08:42.400
<v Speaker 2>Of course, we are products moving forth and back. But

0:08:42.559 --> 0:08:46.079
<v Speaker 2>the underlying basis is that we export more from the

0:08:46.240 --> 0:08:48.160
<v Speaker 2>US than we import through the US.

0:08:49.160 --> 0:08:53.040
<v Speaker 4>So lars, does that imply that the ingredients also that

0:08:53.080 --> 0:08:55.120
<v Speaker 4>you use to manufacture them are also made in the

0:08:55.200 --> 0:08:56.520
<v Speaker 4>US or is that going to be a risk?

0:08:56.840 --> 0:08:56.960
<v Speaker 3>Yes?

0:08:57.800 --> 0:09:01.440
<v Speaker 2>Yes, So if you take again we go in a pill,

0:09:01.880 --> 0:09:03.320
<v Speaker 2>all of that is produced in the US.

0:09:03.320 --> 0:09:04.439
<v Speaker 3>We don't know.

0:09:04.559 --> 0:09:08.760
<v Speaker 2>We do mainly biological manufacturing, so we don't import chemicals

0:09:08.800 --> 0:09:12.680
<v Speaker 2>from China, India or other places in the world. It's

0:09:13.520 --> 0:09:16.680
<v Speaker 2>biologic manufacturing done in the US. But of course we

0:09:16.720 --> 0:09:19.760
<v Speaker 2>also have cases where we explore API from the US

0:09:19.800 --> 0:09:23.240
<v Speaker 2>to Europe and we export from Europe to the US,

0:09:23.280 --> 0:09:27.439
<v Speaker 2>so there are products crossing the border. But again, as

0:09:27.440 --> 0:09:32.240
<v Speaker 2>I mentioned, we export more from the US than we

0:09:32.280 --> 0:09:34.960
<v Speaker 2>import to the US, and that also means that over

0:09:35.040 --> 0:09:37.760
<v Speaker 2>time we could localize more and more in the US,

0:09:38.120 --> 0:09:41.320
<v Speaker 2>and we are also expanding and investing more in the US.

0:09:41.320 --> 0:09:43.319
<v Speaker 2>And you know, we also have a big number we

0:09:43.360 --> 0:09:46.720
<v Speaker 2>can mention if need be. But I think the proof

0:09:46.720 --> 0:09:49.160
<v Speaker 2>point is that we did not leave the US. We

0:09:49.280 --> 0:09:53.240
<v Speaker 2>actually stayed and we double it down to today's situation

0:09:53.320 --> 0:09:55.360
<v Speaker 2>where we export more from the US than we import

0:09:55.400 --> 0:09:56.840
<v Speaker 2>to the US. I think that's a great story and

0:09:56.840 --> 0:09:58.960
<v Speaker 2>I think it's aligned with what the Dedminstration is looking for.

0:10:01.200 --> 0:10:03.240
<v Speaker 4>Ending it out here. When it comes to M and

0:10:03.320 --> 0:10:07.000
<v Speaker 4>A and building out your obesity portfolio externally, are there

0:10:07.000 --> 0:10:09.160
<v Speaker 4>gaps you need to fill and what kind of company,

0:10:09.200 --> 0:10:11.000
<v Speaker 4>what kind of biotech company would be interesting?

0:10:12.840 --> 0:10:15.360
<v Speaker 2>Yeah, you know, we're pursuing a leadership position when it

0:10:15.400 --> 0:10:19.840
<v Speaker 2>comes to obesity and including diabetes and fuel disease areas,

0:10:19.840 --> 0:10:22.480
<v Speaker 2>and we have a very very strong internal pipeline. But

0:10:22.559 --> 0:10:24.840
<v Speaker 2>as you say, there are also some gaps we have

0:10:25.280 --> 0:10:29.280
<v Speaker 2>We have instance in licensed true early deals since our

0:10:29.320 --> 0:10:32.920
<v Speaker 2>last report UH in the small molecule space, So there

0:10:32.960 --> 0:10:37.240
<v Speaker 2>are examples of areas we would like to fill, and

0:10:37.280 --> 0:10:40.400
<v Speaker 2>we do that by complementing and ideally do that with

0:10:40.520 --> 0:10:44.120
<v Speaker 2>early assets from biotech company where we can still use

0:10:44.160 --> 0:10:47.640
<v Speaker 2>our capabilities to really add value to it and thereby

0:10:47.800 --> 0:10:51.600
<v Speaker 2>enhance both the quality to patients in terms of what

0:10:51.640 --> 0:10:54.040
<v Speaker 2>they get in the figacy and safety, but also an

0:10:54.080 --> 0:10:56.760
<v Speaker 2>attractive return to our shareholders and lats before we.

0:10:56.760 --> 0:10:57.160
<v Speaker 3>Let you go.

0:10:57.720 --> 0:11:01.040
<v Speaker 1>We're expecting a pretty significant out when it comes to

0:11:01.280 --> 0:11:03.120
<v Speaker 1>oral sema glue tide in the second half of the

0:11:03.200 --> 0:11:07.000
<v Speaker 1>year about sort of the efficacy for Alzheimer's, And I'm

0:11:07.040 --> 0:11:10.240
<v Speaker 1>curious what you're confident is around that. Obviously Alzheimer's has

0:11:10.240 --> 0:11:12.679
<v Speaker 1>been a not that it seems like the former industry

0:11:12.840 --> 0:11:13.600
<v Speaker 1>just can't crack.

0:11:15.160 --> 0:11:17.760
<v Speaker 3>Yeah, you're right, this is a devastating disease.

0:11:18.320 --> 0:11:21.520
<v Speaker 2>I think we all know of family members who are

0:11:21.559 --> 0:11:26.280
<v Speaker 2>suffering from that. I can talk to that myself, having

0:11:26.280 --> 0:11:29.720
<v Speaker 2>family members diagnosed with Alzheimers. So it's a devastating disease.

0:11:30.720 --> 0:11:33.680
<v Speaker 2>Some call it type three diabetes. Having lived with type

0:11:33.679 --> 0:11:38.080
<v Speaker 2>two diabetes, you alt risk of developing Alzheimer's. So of

0:11:38.120 --> 0:11:42.360
<v Speaker 2>course the hypothesis of using semaglutide is an intrust wrong

0:11:42.400 --> 0:11:45.280
<v Speaker 2>because it has this anti inflammatory properties.

0:11:46.720 --> 0:11:49.240
<v Speaker 3>But as you say, it has been a very.

0:11:49.000 --> 0:11:55.400
<v Speaker 2>Difficult clug development space so we have intentionally guided very cautious,

0:11:55.679 --> 0:11:59.160
<v Speaker 2>cautiously on this because we don't want to create false hopes.

0:12:00.160 --> 0:12:03.600
<v Speaker 2>Data will be coming end of this year. So let's

0:12:03.679 --> 0:12:06.400
<v Speaker 2>let's just have a look at the data and uh

0:12:06.559 --> 0:12:09.400
<v Speaker 2>and decide on the level of excitement when we see that.

0:12:09.760 --> 0:12:14.440
<v Speaker 2>But for sure they really need and also space where

0:12:14.480 --> 0:12:17.720
<v Speaker 2>I think the medicines already there are not you know,

0:12:18.280 --> 0:12:20.640
<v Speaker 2>maybe clear court stand up for care ob chances and

0:12:20.679 --> 0:12:21.679
<v Speaker 2>we could potentially be that