Novo could see U.S. sales hurt after losing two contracts
COPENHAGEN (Reuters) - Danish drugmaker Novo Nordisk A/S has lost two contracts to supply a U.S. pharmacy group with its insulin and diabetes treatments, taking a bite out of expected earnings.
The world's biggest insulin producer said it had lost two contracts with Express Scripts Holding Co - a contract for its diabetes drug Victoza, won by Bristol-Myers Squibb Co, and a deal for insulin Novolog, taken by Eli Lilly & Co.
A spokesman on Tuesday confirmed the lost business but had no further immediate comment.
Express Scripts is a purchasing organization for a number of prescription programs serving between 40 and 45 million Americans.
"This is a serious blow for Novo Nordisk. I think it will hit earnings per share by closer to 3 percent in 2014," analyst Soren Hansen at Sydbank said.
Shares in Novo Nordisk traded 2.9 percent lower at 934.50 crowns by 1103 GMT on Tuesday against a 0.5 percent fall in the Danish benchmark index OMXC20CAP.
The stock fell as low as 926 crowns, its lowest since late July.
Hansen said he still expected sales of Victoza to grow but at a lower rate than previously foreseen.
Jyske Bank said in a note the loss of the two contracts would impact total sales by 1 percent and operating profit by 1.8 percent in 2014.
Analyst Rune Dahl at DNB Markets estimated that the Express Scripts contract for Victoza accounted for between 15 percent and 20 percent of the company's Victoza prescription sales in the United States.
Novo's sales of Victoza in North America amounted to 3.56 billion Danish crowns ($629.4 million) out of a total of 21.35 billion in the second quarter of this year.
(Additional reporting by Shida Chayesteh; Editing by David Holmes)