Novo's long-term targets hinge on two drugs: CEO
NEW YORK (Reuters) - Novo Nordisk's (NOVOb.CO) long-term profit targets are hanging in the balance after a big setback in the U.S. market but the Danish drugmaker may yet hit its goal if things work out for one of two drugs, its CEO said.
Chief Executive Lars Sorensen told the Reuters Health Summit on Tuesday that success for a new obesity drug or a green light for long-acting insulin Tresiba - based on interim data from a safety study demanded by regulators - could keep Novo on track.
The world's biggest insulin producer - a favorite among investors thanks to its exposure to the fast-growing diabetes market - currently has a long-term target to increase operating profit by 15 percent a year.
Some analysts think that is now out of reach, following the refusal in February by the U.S. Food and Drug Administration to approve Tresiba, demanding instead that Novo carry out a major new study on cardiovascular risks.
Sorensen, who plans to update the market on Novo's long-term prospects around the end of the year, acknowledged the FDA decision made the future a lot more uncertain but said a win in obesity could keep the 15 percent goal in sight.
"If that turns out positive then we should be able to still deliver," he said.
The other big variable is just how long it will take the FDA to decide on Tresiba. A regulatory decision based on interim data from the cardiovascular outcomes study would allow the new insulin to contribute to U.S. income within three to five years.
While Tresiba is already on the market in Japan and some European markets, it is the United States that is crucial to Novo's future sales. "The U.S. represents something like 50 percent of our growth potential," Sorensen said.
Novo hopes to offset its Tresiba headache, in part, with a new use of its drug liraglutide as a weight-loss treatment for the severely obese.
The injected drug - already on the market as a treatment for type-2 diabetes under the brand name Victoza - is now in final-stage clinical testing. If the remaining obesity results are good it will offer a new driver to Novo's business.
Just how big the product could be is fiercely debated by analysts. Sorensen declined to reveal Novo's in-house forecasts but said the new product would cost around $20 a day, or more than $7,000 a year, so it would take fewer than 150,000 patients to make it a $1 billion-a-year product.
The company plans to target the most seriously obese, defined as those with a body mass index above 35 and existing health problems - a group it estimates at 20 million in the United States.
Novo's growth challenge is coming into focus because its leadership in the diabetes market faces mounting threats from competitors Sanofi SA (SASY.PA) and Eli Lilly & Co (LLY.N), both of which have new products in development.
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(Editing by Matthew Lewis)