UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
AUGUST 07 2007
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NOVO NORDISK A/S
(Exact name of Registrant as specified in its charter)
NOVO ALLE
DK-2880, BAGSVAERD
DENMARK
(Address of principal executive offices)
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Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g-32(b):82-_____________________
HALF-YEARLY REPORT
FINANCIAL STATEMENT FOR THE PERIOD 1 JANUARY 2007 TO 30 JUNE 2007
NOVO NORDISK INCREASED FIRST HALF-YEAR OPERATING PROFIT BY 14% AND RAISES THE
EXPECTATION FOR 2007 OPERATING PROFIT GROWTH TO AROUND 10%
* Novo Nordisk increased sales by 14% in local currencies and - due to a
significant negative currency development - by 9% in Danish kroner.
o Sales of modern insulins increased by 37% (31% in Danish kroner).
o Sales of NovoSeven(R) increased by 11% (5% in Danish kroner).
o Sales of Norditropin(R) increased by 13% (7% in Danish kroner).
o Sales in North America increased by 25% (16% in Danish kroner).
* Gross margin increased to 77.0% in the first six months of 2007 up from
75.0% in the same period last year, primarily reflecting continued
productivity improvements.
* Operating profit increased by 14% to DKK 5,134 million. Adjusted for the
impact from currencies underlying operating profit increased by around
25%.
* Net profit increased by 81% to DKK 5,361 million, primarily reflecting
the divestment of Dako's business activities. Earnings per share
(diluted) increased by 84% to DKK 16.76.
* The full-year expectation for operating profit growth is now around 10%,
primarily reflecting a sustainable improvement in gross margin. Measured
in local currencies the expectation for full-year operating profit growth
is now increased to around 20%.
* Novo Nordisk has announced very positive results from the first phase 3
study with liraglutide, a human GLP-1 analogue, showing that liraglutide
is statistically superior to insulin glargine in terms of blood glucose
control and weight loss.
Lars Rebien S0rensen, president and CEO, said: "The business continues to
perform very well with robust sales growth and a sustained improvement in our
gross margin. We are also very pleased with the first phase 3 results on
liraglutide which are expected to be supported by results from additional phase
3 studies during the following months."
FINANCIAL STATEMENT FOR THE FIRST SIX MONTHS OF 2007
This interim report has been prepared in accordance with International Financial
Reporting Standards (IFRS). The accounting policies used in the interim report
are consistent with those used in the Annual Report 2006. The interim report has
not been audited.
Amounts in DKK million, except average number of shares outstanding, earnings
per share and full-time employees.
INCOME STATEMENT 6M 2007 6M 2006 % CHANGE 6M 2006 TO 6M 2007
SALES 20,381 18,673 9%
GROSS PROFIT 15,703 14,006 12%
Gross margin 77.0% 75.0%
Sales and distribution costs 6,158 5,578 10%
Percent of sales 30.2% 29.9%
Research and development costs 3,401 2,917 17%
Percent of sales 16.7% 15.6%
Administrative expenses 1,208 1,137 6%
Percent of sales 5.9% 6.1%
Licence fees and other operating income 198 135 47%
OPERATING PROFIT 5,134 4,509 14%
Operating margin 25.2% 24.1%
Net financials 1,634 (289) -
PROFIT BEFORE TAX 6,768 4,220 60%
NET PROFIT 5,361 2,954 81%
Net profit margin 26.3% 15.8%
OTHER KEY NUMBERS
Depreciation, amortisation and impairment losses 1,025 968 6%
Capital expenditure 952 1,217 (22%)
Cash flow from operating activities 3,989 3,859 3%
Free cash flow 2,926 2,462 19%
Total assets 48,300 43,145 12%
Equity 33,475 28,908 16%
Equity ratio 69.3% 67.0%
Average number of shares outstanding (million)
- diluted 319.9 324.8 (2%)
DILUTED EARNINGS PER SHARE (IN DKK) 16.76 9.09 84%
Full-time employees at the end of the period 24,729 22,792 8%
SALES DEVELOPMENT BY SEGMENTS
Sales increased by 14% in local currencies and by 9% measured in Danish kroner
in the first six months of 2007. Growth was realised both within diabetes care
and biopharmaceuticals - primarily driven by modern insulins (insulin
analogues), NovoSeven(R) and Norditropin(R).
SALES GROWTH SHARE OF
6M 2007 GROWTH IN LOCAL GROWTH IN LOCAL
DKK MILLION AS REPORTED CURRENCIES CURRENCIES
THE DIABETES CARE SEGMENT
Modern insulins 6,529 31% 37% 68%
Human insulins 6,358 (4%) 0% 1%
Insulin-related sales 856 9% 14% 4%
Oral antidiabetic products 1,052 10% 15% 5%
Diabetes care - total 14,795 11% 16% 78%
THE BIOPHARMACEUTICALS SEGMENT
NovoSeven(R) 2,919 5% 11% 11%
Growth hormone therapy 1,708 7% 13% 8%
Other products 959 2% 8% 3%
Biopharmaceuticals - total 5,586 5% 11% 22%
TOTAL SALES 20,381 9% 14% 100%
SALES DEVELOPMENT BY REGIONS
In the first six months of 2007, sales growth measured in local currencies was
realised in all regions. The main contributors to growth were North America and
International Operations providing 54% and 23%, respectively, of the total sales
growth. Europe contributed 19% and Japan & Oceania 4% of the sales growth in the
first six months of 2007.
Sales in North America in the first six months of 2007 were positively impacted
by the continued implementation of the Medicare Part D scheme, a public scheme
introduced in 2006 which offers improved medical treatment for elderly patients.
As previously communicated, the greater part of the full-year 2006 positive
impact of the implementation was booked in the fourth quarter of 2006 as data
became available, whereas in 2007 the positive impact is expected to have a more
even quarterly distribution. In addition, sales in North America in the second
quarter of 2007 were positively impacted by an adjustment of the level of 2006
Medicaid rebates to reflect the final 2006 patient data available in May 2007.
DIABETES CARE
Sales of diabetes care products increased by 16% in local currencies and by 11%
in Danish kroner to DKK 14,795 million compared to the first six months of 2006.
MODERN INSULINS, HUMAN INSULINS AND INSULIN-RELATED PRODUCTS
Sales of modern insulins, human insulins and insulin-related products increased
by 16% measured in local currencies and by 11% in Danish kroner to DKK 13,743
million. All regions contributed to growth measured in local currencies, with
North America and International Operations having the highest growth rates. Novo
Nordisk is the global leader within the insulin market with 52% of the total
insulin market and 41% of the modern insulin market, both measured by volume.
Sales of modern insulins increased by 37% in local currencies in the first six
months of 2007 and by 31% in Danish kroner to DKK 6,529 million. All regions
realised solid growth rates, with North America and Europe as the primary
contributors to growth. Sales of modern insulins contributed 68% of the overall
growth in local currencies and now constitute more than 50% of Novo Nordisk's
sales of insulin.
North America
Sales in North America increased by 31% in local currencies in the first six
months of 2007 and by 21% in Danish kroner, reflecting a solid penetration of
the modern insulins NovoLog(R) and NovoLog(R) Mix 70/30 as well as increased
penetration of Levemir(R). Novo Nordisk continues to consolidate its leadership
position in the US insulin market with 42% of the total insulin market and 29%
of the modern insulin market, both measured by volume. The expansion of the US
diabetes sales force from 1,200 to 1,900 people was completed by the end of June
and is expected to support the continued uptake of modern insulins including
Levemir(R).
Europe
Sales in Europe increased by 7% in local currencies and 7% measured in Danish
kroner, reflecting continued progress for the portfolio of modern insulins. Novo
Nordisk holds 57% of the total insulin market and 49% of the modern insulin
market, both measured by volume, and is capturing the predominant share of
growth in the modern insulin market.
International Operations
Sales within International Operations increased by 22% in local currencies and
by 15% in Danish kroner. The main growth driver in the first six months of 2007
was sales of modern insulins, primarily in Turkey, Russia and China.
Furthermore, human insulins continue to add to overall growth in the region,
driven by China. Sales growth in the first six months of 2007 was negatively
impacted by the loss of a federal human insulin tender in Brazil in the second
half of 2006.
Japan & Oceania
Sales in Japan & Oceania increased by 5% in local currencies and decreased by 5%
measured in Danish kroner. The sales development reflects sales growth of modern
insulins, NovoRapid(R) and NovoRapid(R) 30 Mix, both of which are increasingly
being sold in the leading prefilled delivery device, FlexPen(R).
ORAL ANTIDIABETIC PRODUCTS (NOVONORM(R)/PRANDIN(R))
Sales of oral antidiabetic products increased by 15% in local currencies and by
10% in Danish kroner to DKK 1,052 million compared to the same period in 2006.
This reflects increased sales in International Operations, North America and
Europe compared to the same period last year, primarily related to an improved
reimbursement situation in China and a higher average sales price in the US
market.
BIOPHARMACEUTICALS
Sales of biopharmaceutical products increased by 11% in local currencies and by
5% measured in Danish kroner to DKK 5,586 million compared to the first six
months of 2006.
NOVOSEVEN(R)
Sales of NovoSeven(R) increased by 11% in local currencies and by 5% in Danish
kroner to DKK 2,919 million compared to the same period last year. Sales growth
for NovoSeven(R) was primarily realised in North America. The sales growth of
NovoSeven(R) during the first six months of 2007 reflected increased sales
within the congenital bleeding disorder segments as well as a perceived higher
level of investigational use. Treatment of spontaneous bleeds for congenital
inhibitor patients remains the largest area of use. In Europe, NovoSeven(R) was
recently launched for single dose use (270 ug/kg) for people with haemophilia
with inhibitors, making administration of NovoSeven(R) more convenient for mild
to moderate bleeds.
GROWTH HORMONE THERAPY (NORDITROPIN(R))
Sales of Norditropin(R), growth hormone in a liquid, ready-to-use formulation,
increased by 13% measured in local currencies and by 7% measured in Danish
kroner to DKK 1,708 million. All regions contributed to growth measured in local
currencies supported by the continued success of the prefilled delivery device
NordiFlex(R).
OTHER PRODUCTS
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy (HRT) related products, increased by 8% in local
currencies and by 2% in Danish kroner to DKK 959 million. This development
primarily reflects continued sales progress in the US market for Vagifem(R),
Novo Nordisk's topical oestrogen product. Novo Nordisk is now the global leader
within the topical HRT market with a market share of 30%, measured in value.
COSTS, LICENCE FEES AND OTHER OPERATING INCOME
The cost of goods sold was largely unchanged at DKK 4,678 million, representing
a gross margin of 77.0% compared to 75.0% in the first six months of 2006. This
improvement reflects improved production efficiency, an improved product mix and
higher average prices in the US, but also a negative impact of around 0.7
percentage points due to currency developments, primarily the lower value of US
dollars and Japanese yen versus Danish kroner compared to the same period last
year.
Total non-production-related costs increased by 12% to DKK 10,767 million. The
increase reflects costs related to sales and distribution as well as research
and development. Sales and distribution costs increased slightly more than
sales, primarily reflecting the increase in the US diabetes care sales force, as
well as a provision relating to an antidumping court case in Brazil. Research
and development costs also increased more than sales, primarily reflecting the
high number of late-stage clinical development projects currently being
conducted.
Licence fees and other operating income in the first six months of 2007 were DKK
198 million, positively impacted by a non-recurring income related to the
out-licensing of an oral antidiabetic compound.
NET FINANCIALS
Net financials showed a net income of DKK 1,634 million in the first six months
of 2007 compared to a net expense of DKK 289 million in the same period in 2006.
Included in net financials is the result from associated companies with an
income of DKK 1,290 million, primarily related to the tax-exempt income of DKK
1.4 billion from Novo Nordisk's divestment of the ownership of Dako's business
activities as well as Novo Nordisk's share of losses in ZymoGenetics Inc,
compared to an expense of DKK 118 million in the same period in 2006.
The foreign exchange result was an income of DKK 458 million compared to a loss
of DKK 175 million in the same period last year. This development reflects gains
on foreign exchange hedging activities due to the lower value of especially US
dollars and Japanese yen versus Danish kroner in the first six months of 2007
compared to the exchange rate level prevailing in 2006.
OUTLOOK 2007
Novo Nordisk expects 11-14% growth in SALES measured in local currencies for
2007. This is based on expectations of continued market penetration of Novo
Nordisk's key strategic products within diabetes care and biopharmaceuticals, as
well as expectations of increased competition in the diabetes care area during
2007 due to competitors' product launches. Given the current level of exchange
rates versus Danish kroner, the reported sales growth for 2007 is expected to be
7-10%.
For 2007, OPERATING PROFIT as reported is now expected to grow by around 10%,
reflecting a sustainable gross margin improvement but also a continued
depreciation of key invoicing currencies versus Danish kroner compared to the
exchange rate levels prevailing at the time of the first quarter 2007 results
released on 2 May 2007. Measured in local currencies the expectation for growth
in operating profit is increased to around 20%, reflecting a sustainable
improvement in gross margin. The expectation for operating profit growth still
includes an expected higher level of spending on the portfolio of research and
development projects as well as a continued high level of spending on sales and
marketing.
For 2007, Novo Nordisk still expects a NET FINANCIAL INCOME of around DKK 1,800
million, including a positive impact from Novo Nordisk's divestment of the
ownership of Dako's business activities, which was announced on 28 February 2007
and completed on 31 May 2007. A tax-exempt income of DKK 1.4 billion from the
divestment was recorded in the second quarter of 2007.
For 2007, Novo Nordisk expects an effective TAX RATE of 22%. The tax rate
includes a non-recurring positive effect of around 3 percentage points from Novo
Nordisk's divestment of the ownership of Dako's business activities and a
non-recurring effect of around 1 percentage point from the re-evaluation of the
company's deferred tax liabilities as a consequence of the new Danish
corporation tax law. Also included in the outlook for the effective tax rate for
2007 is a recurring effect of close to 2 percentage points caused by the
reduction in the Danish corporation tax rate from 28% to 25%.
CAPITAL EXPENDITURE is expected to be below DKK 3 billion in 2007. Expectations
for DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES are still around DKK 2.3
billion, and FREE CASH FLOW is expected to be around DKK 7 billion, which
includes a positive impact from the divestment of the ownership of Dako's
business activities.
All of the above expectations are provided that currency exchange rates,
especially the US dollar and related currencies, remain at the current level
versus the Danish krone for the rest of 2007.
Novo Nordisk has hedged expected net cash flows in relation to US dollars,
Japanese yen and British pounds for 17, 14 and 10 months, respectively. The
financial impact from foreign exchange hedging is included in 'Net financials'.
RESEARCH AND DEVELOPMENT UPDATE
DIABETES CARE
As communicated on 21 June 2007, Novo Nordisk received the clinical results from
the first of five phase 3 studies with the once-daily human GLP-1 analogue
liraglutide. The 26-week study included 581 patients with type 2 diabetes
inadequately controlled by two oral antidiabetic drugs, metformin and a
sulfonylurea (glimepiride). All patients in the study continued therapy with the
two oral drugs and were randomised to add one daily injection of liraglutide,
placebo or insulin glargine. The average HbA1c level at the beginning of the
study was between 8.0% and 8.5%. At the end of the study, more than 50% of
patients in the liraglutide group had reached the American Diabetes Association
goal of HbA1c < 7%. Furthermore, more than 35% achieved the American Association
of Clinical Endocrinologists HbA1c target of <= 6.5%. The HbA1c reduction
achieved in the liraglutide group was more than 0.2 percentage points better
than in the insulin glargine group, a difference which is statistically
significant. In addition, the patients on liraglutide treatment lost on average
3.5 kg body weight compared to the insulin glargine group, a difference which
was statistically significant as well.
At the annual meeting of the American Diabetes Association (ADA) held in Chicago
in June this year, Novo Nordisk presented detailed results of the Japanese phase
2 study with liraglutide as monotherapy including 226 patients with type 2
diabetes treated over a period of 14 weeks. From an HbA1c baseline of between
8.1% and 8.5%, the patients treated with the high dose of liraglutide improved
on average HbA1c by 1.9 percentage points vs placebo by reducing both fasting
and post-meal glucose levels. Results showed that liraglutide was effective and
well tolerated within a wide dose range, allowing 75% of patients receiving the
highest dose to achieve the glycaemic control target of HbA1c < 7.0% without
hypoglycaemia.
At the ADA meeting, Novo Nordisk also presented detailed results from the
Levemir(R) PREDICTIVE(R) clinical trial in the US. The six-month study including
5,604 patients showed that the patients with type 2 diabetes were able to safely
reduce their blood sugar by adjusting their own dosage of Levemir(R), compared
to dosing adjusted by their primary care physician. This improvement in HbA1c
levels was observed with minimal weight change and without increases in rates of
hypoglycaemia. Furthermore, around 90% of the patients were well treated on
Levemir(R) once daily at the end of the study.
BIOPHARMACEUTICALS
Novo Nordisk has filed for regulatory approval of a heat-stable version of
NovoSeven(R) in Europe as well as in the US. A heat-stable product is expected
to deliver significant patient benefits including rapid dosing and ease of
access to treatment outside of home or hospital settings.
Novo Nordisk has recently initiated a phase 2 study with the short-acting
NovoSeven(R) analogue (NN1731). The study is expected to include around 75
haemophilia patients with inhibitors and will evaluate both safety and efficacy
of NN1731. The study is expected to take around two years to complete.
Furthermore, as communicated on 15 June 2007, Novo Nordisk has initiated a phase
1 study with a long-acting version of NovoSeven(R). This long-acting version in
addition to the short-acting analogue (NN1731) shows Novo Nordisk's commitment
to develop the class of second-generation rFVIIa compounds with improved
properties.
In June, the US Food and Drug Administration (FDA) approved Norditropin(R) for
the treatment of short stature in children with Noonan syndrome. Noonan syndrome
is defined as an autosomal dominant genetic syndrome commonly characterised by
short stature, congenital heart defects and abnormal facial features.
Norditropin(R) has received orphan drug designation for this indication.
Novo Nordisk has initiated a global phase 3 trial for the use of Norditropin(R)
for the treatment of adult patients in chronic dialysis (APCD) encompassing
around 2,500 patients. This double-blind, placebo-controlled study evaluates the
impact of growth hormone treatment on the survival rate of APCD patients
following two years' treatment. Growth hormone treatment is expected to increase
the patients' lean body mass and level of serum albumin, which has been shown to
be leading indicators for survival in APCD. The study is expected to take around
three years to complete.
Finally, Novo Nordisk has successfully completed a 12-month double-blind,
randomised, placebo-controlled, multi-centre US phase 3 trial of Vagifem(R) low
dose (10ug estradiol). The efficacy and safety of Vagifem(R) low dose for the
treatment of postmenopausal atrophic vaginitis symptoms was investigated in this
trial and a significant improvement was observed in all three primary endpoints
compared to placebo. Novo Nordisk expects to file for marketing approval with
the FDA later this year.
EQUITY
Total equity was DKK 33,475 million at the end of the first six months of 2007,
equal to 69.3% of total assets, compared to 67.4% at the end of 2006. Please
refer to appendix 6 for further elaboration of changes in equity during 2007.
HOLDING OF TREASURY SHARES AND SHARE REPURCHASE PROGRAMME
As per 2 August 2007, Novo Nordisk A/S and its wholly-owned affiliates owned
5,514,614 of its own B shares, corresponding to 1.70% of the total share
capital. The reduction in the ownership of own shares reflects the cancellation
of 13,480,000 B shares, which took place on 19 June 2007 following a decision at
the annual general meeting earlier this year. During the period from 1 January
to 2 August 2007, Novo Nordisk repurchased a total of 138,000 B shares equal to
a cash value of DKK 0.1 billion. In 2006, Novo Nordisk repurchased shares equal
to a cash value of DKK 3 billion out of the total DKK 10 billion share
repurchase programme for 2006-2008. In 2007, Novo Nordisk still expects to
repurchase B shares equal to a cash value of DKK 5 billion.
CHANGE IN TRADING UNITS
In order to secure liquidity for both the Novo Nordisk B shares and American
Depositary Receipts (ADRs) and bring price levels in line with market practice
for especially the ADRs, the Board of Directors has decided to make a stock
split. The trading unit of the Novo Nordisk B shares listed on the Copenhagen
Stock Exchange will be changed from DKK 2 to DKK 1. The ratio of B shares to
ADRs listed on the New York Stock Exchange will remain 1:1. These changes in
trading units are expected to take effect as of 1 December 2007.
SUSTAINABILITY ISSUES UPDATE
NEW RESEARCH HIGHLIGHTS THE ECONOMIC COST OF DIABETES
A dramatic increase in the prevalence of diabetes is a heavy economic burden for
both developed and developing countries, according to a new report from the
Economist Intelligence Unit, sponsored by Novo Nordisk. The research covered
five countries: China, India, the United Kingdom, the United States and Denmark.
It was found that India, with costs equivalent to 2.1% of GDP being incurred as
a result of diabetes in 2007, is currently bearing the heaviest relative costs.
Among the developed countries in the study, the US faces the biggest burden,
with costs equivalent to 1.3% of GDP. The cost of treatment is high but the cost
of doing nothing is far greater, the report concludes. If countries do not
invest in prevention, early diagnosis and treatment, the costs are likely to
escalate dramatically in the future.
In addition to exploring the economic cost of diabetes, the report examines some
of the barriers that are preventing the diabetes epidemic from being more
effectively addressed, and looks at a number of innovative approaches being
taken to combat diabetes in both developed and developing countries. It
highlights the need for greater measurement and transparency to more accurately
calculate the real economic burden of diabetes and calls for more collaboration
between policy-makers, healthcare providers and industry to develop more
effective health education, diseases awareness programmes and policies.
NOVO NORDISK INCREASES TRANSPARENCY ON CLINICAL TRIALS
Novo Nordisk has launched a new website dedicated to clinical trials. The new
clinical trials portal will provide an overview of all Novo Nordisk's clinical
trials in phases 2 and 3 as well as trials being conducted after launch. It also
provides information about Novo Nordisk's global ethical standards and
guidelines for clinical trials. Novo Nordisk has published the results of its
clinical trials on www.ClinicalStudyResults.org and the US government registry
www.clinicaltrials.gov since 2005. The new site at novonordisk-trials.com makes
the information available directly.
LEGAL ISSUES UPDATE
US HORMONE THERAPY LITIGATION
As of 2 August 2007, Novo Nordisk Inc., as well as the majority of hormone
therapy product manufacturers in the US, is a defendant in product liability
lawsuits related to hormone therapy products. These lawsuits currently involve a
total of 43 individuals who allege use of a Novo Nordisk hormone therapy
product. These products (Activella(R) and Vagifem(R)) have been sold and
marketed in the US since 2000. Until July 2003, the products were sold and
marketed exclusively in the US by Pharmacia & Upjohn Company (now Pfizer Inc.).
Further, an additional 28 individuals currently allege, in relation to similar
lawsuits against Pfizer Inc., that they also have used a Novo Nordisk hormone
therapy product. While Novo Nordisk does not have any court trials scheduled for
2007 and does not presently expect to have a trial scheduled before 2008, one of
the 28 individuals who filed suit against Pfizer alleging use of Activella(R)
has a trial tentatively scheduled for December 2007. Novo Nordisk does not
expect the pending claims to impact Novo Nordisk's financial outlook
SOLOSTAR(R) LITIGATION
On 10 July 2007, Novo Nordisk filed a lawsuit against Sanofi-Aventis
for insulin delivery device patent infringement. The lawsuit was filed in the US
District Court for the District of New Jersey and named Sanofi-Aventis as
defendant. The lawsuit alleges Sanofi-Aventis's SoloStar(R) pen system infringes
a Novo Nordisk US patent relating to mechanisms for injecting and dose-setting
and seeks both an injunction and monetary damages.
CONFERENCE CALL DETAILS
At 13.00 CET today, corresponding to 7.00 am New York time, a conference call
will be held. Investors will be able to listen in via a link on novonordisk.com,
which can be found under 'Investors - Download centre'. Presentation material
for the conference call will be made available approximately one hour before on
the same page.
FORWARD-LOOKING STATEMENT
The above contains forward-looking statements as the term is defined in the US
Private Securities Litigation Reform Act of 1995. This in particular relates to
information included under the headings 'Outlook 2007', 'Research and
development update' and 'Legal issues update' with reference to plans,
forecasts, expectations, strategies, projections and assessment of risks. Words
such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy', 'prospect',
'foresee', 'estimate', 'project', 'anticipate', 'can', 'intend' and similar
words identify forward-looking statements.
Examples of such forward-looking statements include, but are not limited to: (i)
statements of plans, objectives or goals for future operations including those
related to Novo Nordisk's products, product research, product introductions and
product approvals as well as co-operations in relation thereto, (ii) statements
containing projections of revenues, income (or loss), earnings per share,
capital expenditures, dividends, capital structure or other net financials,
(iii) statements of future economic performance and (iv) statements of the
assumptions underlying or relating to such statements.
These statements are based on current plans, estimates and projections, and
therefore undue reliance should not be placed on them. Moreover, such statements
are not guarantees of future results. By their very nature, forward-looking
statements involve inherent risks and uncertainties, both general and specific,
and risks exist that the predictions, forecasts, projections and other
forward-looking statements will not be achieved. Novo Nordisk cautions that a
number of important factors could cause actual results to differ materially from
the plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements.
Factors that may affect future results include, but are not limited to, interest
rate and currency exchange rate fluctuations, delay or failure of development
projects, interruptions of supplies and production, product recall, pressure on
insulin prices, unexpected contract breaches or terminations,
government-mandated or market-driven price decreases for Novo Nordisk's
products, introduction of competing products, Novo Nordisk's ability to
successfully market current and new products, exposure to product liability and
other legal proceedings and investigations, changes in reimbursement rules and
governmental laws and related interpretation thereof, perceived or actual
failure to adhere to ethical marketing practices, developments in international
activities, which also involve certain political risks, investments in and
divestitures of domestic and foreign companies and unexpected growth in costs
and expenses.
Risks and uncertainties are further described in reports filed by Novo Nordisk
with the US Securities and Exchange Commission (SEC), including the company's
Form 20-F for 2006 filed with the US SEC in February 2007, and to the section
'Risk management' of the Annual Report 2006 available on our website
(novonordisk.com).
Forward-looking statements speak only as of the date they were made, and unless
required by law Novo Nordisk is under no duty and undertakes no obligation to
update or revise any of them, after the distribution of this Stock Exchange
Announcement, whether as a result of new information, future events or
otherwise.
MANAGEMENT STATEMENT
Today, the Board of Directors and Executive Management reviewed and approved the
interim report and accounts of Novo Nordisk A/S for the first six months of
2007.
The interim report and accounts have been prepared in accordance with
International Financial Reporting Standards and the additional Danish disclosure
requirements applying to listed companies' interim reports and accounts.
In our opinion the accounting policies used are appropriate and the overall
presentation of the interim report and accounts is adequate. Furthermore, in our
opinion the interim report and accounts give a true and fair view of the Group's
assets, liabilities, financial position and of the results of the operations and
consolidated cash flows for the period under review.
Bagsvaerd 3 August 2007
EXECUTIVE MANAGEMENT:
Lars Rebien Sorensen Jesper Brandgaard
President and CEO CFO
Lise Kingo Kare Schultz Mads Krogsgaard Thomsen
BOARD OF DIRECTORS:
Sten Scheibye Goran A Ando
Chairman Vice chairman
Kurt Briner Henrik Gurtler Johnny Henriksen
Niels Jacobsen Anne Marie Kverneland Kurt Anker Nielsen
Soren Thuesen Pedersen Stig Strobaek Jorgen Wedel
CONTACTS FOR FURTHER INFORMATION
INVESTORS:
MEDIA:
Outside North America: Outside North America:
Mike Rulis Mads Veggerby Lausten
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4443 7919
E-mail: mike@novonordisk.com E-mail: mlau@novonordisk.com
Hans Rommer
Tel (direct): (+45) 4442 4765
E-mail: hrmm@novonordisk.com
In North America: In North America:
Lori Moore Christian Qvist Frandsen
Tel (direct): (+1) 609 919 7991 Tel (direct): (+1) 609 919 7937
E-mail: lrmo@novonordisk.com E-mail: cqfr@novonordisk.com
Further information on Novo Nordisk is available on the company's internet
homepage at the address: novonordisk.com
Stock Exchange Announcement No 20/2007
QUARTERLY NUMBERS IN DKK
(Amounts in DKK million, except number of employees, earnings per share and
number of shares outstanding.)
% change
2007 2006 Q2 2006 -
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2007
----------------------------------------------------------------------
SALES 10,563 9,818 10,487 9,583 9,727 8,946 9%
Gross profit 8,205 7,498 7,906 7,246 7,475 6,531 10%
Gross margin 77.7% 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and distribution costs 3,110 3,048 3,331 2,699 2,850 2,728 9%
Percent of sales 29.4% 31.0% 31.8% 28.2% 29.3% 30.5%
Research and development costs 1,754 1,647 1,910 1,489 1,498 1,419 17%
Percent of sales 16.6% 16.8% 18.2% 15.5% 15.4% 15.9%
Administrative expenses 594 614 645 605 557 580 7%
Percent of sales 5.6% 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and other operating income (net) 60 138 88 49 59 76 2%
OPERATING PROFIT 2,807 2,327 2,108 2,502 2,629 1,880 7%
Operating margin 26.6% 23.7% 20.1% 26.1% 27.0% 21.0%
Share of profit/(loss) in associated companies 1,350 (60) (112) (30) (58) (60) -
Financial income 297 309 579 139 102 111 191%
Financial expenses 60 202 165 77 182 202 -67%
Profit before income taxes 4,394 2,374 2,410 2,534 2,491 1,729 76%
NET PROFIT 3,652 1,709 1,724 1,774 1,743 1,211 110%
Depreciation, amortisation and impairment losses 516 509 574 600 508 460 2%
Capital expenditure 508 444 899 671 622 595 -18%
Cash flow from operating activities 1,438 2,551 359 3,520 1,768 2,091 -19%
Free cash flow 826 2,100 (439) 2,684 996 1,466 -17%
Equity 33,475 29,676 30,122 28,288 28,908 27,042 16%
Total assets 48,300 44,742 44,692 43,744 43,145 41,299 12%
Equity ratio 69.3% 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees at the end of the period 24,729 24,045 23,172 23,071 22,792 22,556 8%
Basic earnings per share (in DKK) 11.49 5.38 5.44 5.54 5.40 3.74 113%
Diluted earnings per share (in DKK) 11.41 5.35 5.40 5.51 5.37 3.72 112%
Average number of shares outstanding (million)* 317.9 317.5 317.1 320.1 322.9 323.6 -2%
Average number of shares outstanding incl
dilutive effect of options'in the money' (million)* 320.1 319.7 319.2 321.8 324.5 325.2 -1%
Sales by business segments:
Modern insulins (insulin analogues) 3,464 3,065 3,122 2,701 2,678 2,324 29%
Human insulins *** 3,222 3,136 3,519 3,306 3,301 3,325 -2%
Insulin-related sales *** 437 419 431 391 406 378 8%
Oral antidiabetic products (OAD) 529 523 508 516 483 477 10%
DIABETES CARE TOTAL 7,652 7,143 7,580 6,914 6,868 6,504 11%
NovoSeven(R) 1,508 1,411 1,470 1,393 1,507 1,265 0%
Growth hormone therapy 924 784 897 821 882 709 5%
Hormone replacement therapy 411 406 455 383 396 373 4%
Other products 68 74 85 72 74 95 -8%
BIOPHARMACEUTICALS TOTAL 2,911 2,675 2,907 2,669 2,859 2,442 2%
Sales by geographic segments:
Europe ** 4,035 3,931 4,013 3,843 3,903 3,541 3%
North America 3,424 3,214 3,486 3,062 2,968 2,764 15%
International Operations ** 1,953 1,696 1,690 1,539 1,648 1,617 19%
Japan & Oceania 1,151 977 1,298 1,139 1,208 1,024 -5%
Segment operating profit:
Diabetes care 1,600 1,247 1,198 1,296 1,490 998 7%
Biopharmaceuticals 1,207 1,080 910 1,206 1,139 882 6%
*) For Q2 2007 the exact numbers of 'Average number of shares outstanding' and'Average number of shares outstanding
incl dilutive effect of options 'in the money" are 317,881,015 and 320,072,198 respectively.
**) Comparative figures from 2006 have been adjusted in order to reflect a changed organisational structure from
1 January 2007 which transfers eight countries, incl. Bulgaria and Romania, from International Operations to Europe.
***) As from Q2 2007 sales figures for Human insulins and Insulin-related sales are presented separately.
Comparative figures are adjusted accordingly.
QUARTERLY NUMBERS IN EUR
(Amounts in EUR million, except number of employees, earnings per share and
number of shares outstanding.)
Key figures are translated into EUR as supplementary information - the
translation is based on average exchange rate for income statement and exchange
rate at the balance sheet date for balance sheet items.
% change
2007 2006 Q2 2006 -
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2007
----------------------------------------------------------------------
SALES 1,418 1,317 1,406 1,285 1,304 1,199 9%
Gross profit 1,101 1,006 1,060 972 1,002 875 10%
Gross margin 77.7% 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and distribution costs 417 409 447 361 382 366 9%
Percent of sales 29.4% 31.0% 31.8% 28.2% 29.3% 30.5%
Research and development costs 235 221 256 200 201 190 17%
Percent of sales 16.6% 16.8% 18.2% 15.5% 15.4% 15.9%
Administrative expenses 80 82 86 82 74 78 7%
Percent of sales 5.6% 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and other operating income (net) 8 19 11 7 8 10 2%
OPERATING PROFIT 377 312 283 336 352 252 7%
Operating margin 26.6% 23.7% 20.1% 26.1% 27.0% 21.0%
Share of profit/(loss) in associated companies 181 (8) (15) (4) (8) (8) -
Financial income 40 41 78 18 14 15 191%
Financial expenses 8 27 22 11 24 27 -67%
Profit before income taxes 589 319 324 339 334 232 76%
NET PROFIT 490 229 231 238 234 162 110%
Depreciation, amortisation and impairment losses 70 68 77 80 68 62 2%
Capital expenditure 68 60 121 90 83 80 -18%
Cash flow from operating activities 19 342 48 472 237 280 -19%
Free cash flow 111 282 (59) 360 134 196 -17%
Equity 4,498 3,983 4,040 3,793 3,875 3,624 16%
Total assets 6,490 6,005 5,994 5,866 5,784 5,534 12%
Equity ratio 69.3% 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees at the end of the period 24,729 24,045 23,172 23,071 22,792 22,556 8%
Basic earnings per share (in EUR) 1.54 0.72 0.72 0.75 0.72 0.50 113%
Diluted earnings per share (in EUR) 1.53 0.72 0.72 0.74 0.72 0.50 112%
Average number of shares outstanding (million)* 317.9 317.5 317.1 320.1 322.9 323.6 -2%
Average number of shares outstanding incl
dilutive effect of options 'in the money' (million)* 320.1 319.7 319.2 321.8 324.5 325.2 -1%
Sales by business segments:
Modern insulins (insulin analogues) 465 411 418 363 359 311 29%
Human insulins *** 432 421 472 443 442 446 -2%
Insulin-related sales *** 59 56 57 53 54 51 8%
Oral antidiabetic products (OAD) 71 70 68 69 65 64 10%
DIABETES CARE TOTAL 1,027 958 1,015 928 920 872 11%
NovoSeven(R) 203 189 197 186 202 170 0%
Growth hormone therapy 124 105 121 110 118 95 5%
Hormone replacement therapy 56 54 61 51 53 50 4%
Other products 9 10 12 9 10 13 8%
BIOPHARMACEUTICALS TOTAL 392 358 391 356 383 328 2%
Sales by geographic segments:
Europe ** 542 527 538 515 523 475 3%
North America 460 431 467 411 398 370 15%
International Operations ** 262 228 227 206 221 217 19%
Japan & Oceania 155 131 174 153 162 137 -5%
Segment operating profit:
Diabetes care 215 167 161 173 200 134 7%
Biopharmaceuticals 162 145 122 162 153 118 6%
*) For Q2 2007 the exact numbers of 'Average number of shares outstanding' and 'Average number of shares outstanding
incl dilutive effect of options 'in the money" are 317,881,015 and 320,072,198 respectively.
**) Comparative figures from 2006 have been adjusted in order to reflect a changed organisational structure from
1 January 2007 which transfers eight countries, incl. Bulgaria and Romania, from International Operations to Europe.
***) As from Q2 2007 sales figures for Human insulins and Insulin-related sales are presented separately.
Comparative figures are adjusted accordingly.
THE NOVO NORDISK GROUP
CONSOLIDATED INCOME STATEMENT
H1 H1 Q2 Q2
DKK million 2007 2006 2007 2006
---------------------------------------------------------------------------------------------------
Sales 20,381 18,673 10,563 9,727
Cost of goods sold 4,678 4,667 2,358 2,252
---------------------------------------------------------------------------------------------------
GROSS PROFIT 15,703 14,006 8,205 7,475
Sales and distribution costs 6,158 5,578 3,110 2,850
Research and development costs 3,401 2,917 1,754 1,498
Administrative expenses 1,208 1,137 594 557
Licence fees and other operating income (net) 198 135 60 59
---------------------------------------------------------------------------------------------------
OPERATING PROFIT 5,134 4,509 2,807 2,629
Share of profit/(loss) in associated companies 1,290 (118) 1,350 (58)
Financial income 606 213 297 102
Financial expenses 262 384 60 182
---------------------------------------------------------------------------------------------------
PROFIT BEFORE INCOME TAXES 6,768 4,220 4,394 2,491
Income taxes 1,407 1,266 742 748
---------------------------------------------------------------------------------------------------
NET PROFIT 5,361 2,954 3,652 1,743
BASIC EARNINGS PER SHARE (DKK) 16.87 9.14 11.49 5.40
DILUTED EARNINGS PER SHARE (DKK) 16.76 9.09 11.41 5.37
SEGMENT SALES:
Diabetes care 14,795 13,372 7,652 6,868
Biopharmaceuticals 5,586 5,301 2,911 2,859
SEGMENT OPERATING PROFIT:
Diabetes care 2,847 2,488 1,600 1,490
Operating margin 19.2% 18.6% 20.9% 21.7%
Biopharmaceuticals 2,287 2,021 1,207 1,139
Operating margin 40.9% 38.1% 41.5% 39.8%
CONSOLIDATED BALANCE SHEET
DKK million 30 JUN 2007 31 Dec 2006
---------------------------------------------------------------------------------------------------
ASSETS
Intangible assets 735 639
Property, plant and equipment 20,372 20,350
Investments in associated companies 2,105 788
Deferred income tax assets 2,015 1,911
Other financial assets 155 169
TOTAL LONG-TERM ASSETS 25,382 23,857
Inventories 8,941 8,400
Trade receivables 6,043 5,163
Tax receivables 334 385
Other receivables 2,046 1,784
Marketable securities and financial derivatives 1,725 1,833
Cash at bank and in hand 3,829 3,270
TOTAL CURRENT ASSETS 22,918 20,835
---------------------------------------------------------------------------------------------------
TOTAL ASSETS 48,300 44,692
---------------------------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Share capital 647 674
Treasury shares (11) (39)
Retained earnings 32,109 28,810
Other comprehensive income 730 677
TOTAL EQUITY 33,475 30,122
Long-term debt 1,162 1,174
Deferred income tax liabilities 1,824 1,998
Provision for pensions 407 330
Other provisions 886 911
---------------------------------------------------------------------------------------------------
TOTAL LONG-TERM LIABILITIES 4,279 4,413
Short-term debt and financial derivatives 97 338
Trade payables 1,597 1,712
Tax payables 1,285 788
Other liabilities 5,032 4,863
Other provisions 2,535 2,456
---------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 10,546 10,157
TOTAL LIABILITIES 14,825 14,570
---------------------------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 48,300 44,692
---------------------------------------------------------------------------------------------------
THE NOVO NORDISK GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW AND FINANCIAL RESOURCES
DKK million H1 2007 H1 2006
------------------------------------------------------------------------------------------------------------
NET PROFIT 5,361 2,954
Adjustment for non-cash items 390 2,651
Income taxes paid and net interest received 249 (877)
------------------------------------------------------------------------------------------------------------
CASH FLOW BEFORE CHANGE IN WORKING CAPITAL 6,000 4,728
Net change in working capital (2,011) (869)
------------------------------------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES 3,989 3,859
Net investments in intangible assets and long-term financial assets (111) (180)
Capital expenditure for property, plant and equipment (952) (1,217)
Net change in marketable securities (maturity exceeding three months) 4 511
------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (1,059) (886)
CASH FLOW FROM FINANCING ACTIVITIES 2,124) (2,463)
NET CASH FLOW 806 510
Unrealised gain/(loss) on exchange rates and marketable securities
included in cash and cash equivalents (19) (25)
------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 787 485
Cash and cash equivalents at the beginning of the year 2,985 2,483
------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 3,772 2,968
Bonds with original term to maturity exceeding three months 994 999
Undrawn committed credit facilities 7,442 7,459
------------------------------------------------------------------------------------------------------------
FINANCIAL RESOURCES AT THE END OF THE PERIOD 12,208 11,426
Cash flow from operating activities 3,989 3,859
+ Net cash used in investing activities (1,059) (886)
- Net change in marketable securities (maturity exceeding three months) 4 511
FREE CASH FLOW 2,926 2,462
THE NOVO NORDISK GROUP
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Other comprehensive income
---------------------------
Deferred
Exchange gain/loss
rate on cash Other
DKK million Share Treasury Retained adjust- flow adjust-
capital shares earnings ments hedges ments TOTAL
----------------------------------------------------------------
H1 2007
Balance at the beginning of the year 674 (39) 28,810 156 420 101 30,122
Exchange rate adjustment of investments
in subsidiaries 79 79
Deferred (gain)/loss on cash flow hedges
at the beginning of the year recognised
in the Income statement for the period (420) (420)
Deferred gain/(loss) on cash flow hedges
at the end of the period 370 370
Other adjustments 24 24
---------------------------------------------------------------------------------------------------------------------
Net income recognised directly in equity - - - 79 (50) 24 53
Net profit for the period 5,361 5,361
---------------------------------------------------------------------------------------------------------------------
Total income for the period - - 5,361 79 (50) 24 5,414
Share-based payment 54 54
Purchase of treasury shares (79) (79)
Sale of treasury shares 1 184 185
Reduction of the B share capital (27) 27 -
Dividends (2,221) 2,221)
---------------------------------------------------------------------------------------------------------------------
BALANCE AT THE END OF THE PERIOD 647 (11) 32,109 235 370 125 33,475
H1 2006
Balance at the beginning of the year 709 (61) 26,962 142 (345) 227 27,634
Exchange rate adjustment of investments
in subsidiaries (6) (6)
Deferred (gain)/loss on cash flow hedges
at the beginning of the year recognised
in the Income statement for the period 345 345
Deferred gain/(loss) on cash flow hedges
at the end of the period 367 367
Other adjustments (26) (26)
---------------------------------------------------------------------------------------------------------------------
Net income recognised directly in equity - - - (6) 712 (26) 680
Net profit for the period 2,954 2,954
---------------------------------------------------------------------------------------------------------------------
Total income for the period - - 2,954 (6) 712 (26) 3,634
Share-based payment 51 51
Purchase of treasury shares (3) (576) (579)
Sale of treasury shares 1 112 113
Reduction of the B share capital (35) 35 -
Dividends (1,945) (1,945)
---------------------------------------------------------------------------------------------------------------------
BALANCE AT THE END OF THE PERIOD 674 (28) 27,558 136 367 201 28,908
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
Date: AUGUST 07 2007 NOVO NORDISK A/S
---------------------------------------------------
Lars Rebien Sorensen,
President and Chief Executive Officer