* Novo site in Tianjin visited by officials on Aug. 1
* Lundbeck unit in Beijing also called on by authorities
* Follows bribery charges against GSK, visits to other firms
* Chinese paper reports allegation Sanofi paid bribes
* Analysts see slowing China pharma growth due to crackdown
By Mette Fraende and Ben Hirschler
COPENHAGEN/LONDON, Aug 8 Chinese authorities
have visited a site operated by Danish drugmaker Novo Nordisk
A/S, the world's biggest maker of insulin, in the
latest sign of a widening investigation into Western drugmakers.
H. Lundbeck A/S, a smaller Danish drugs firm, also
said its unit in Beijing had been visited by the authorities,
while a Chinese newspaper reported an allegation from an unnamed
person that French firm Sanofi SA had paid around 1.7
million yuan ($276,200) in bribes to hundreds of doctors in
China in 2007.
Paris-based Sanofi said it took the claim "very seriously".
Chinese investigations into bribery and over-pricing have so
far centred on Britain's GlaxoSmithKline Plc (GSK) but
the latest developments suggest they could have a wider impact
across the pharmaceuticals industry.
Novo said on Thursday that local Administration for Industry
and Commerce (AIC) officials visited a production facility in
Tianjin on Aug. 1, adding there had been no visit at the
company's head office in the country.
"We were asked to provide information regarding our
operations in China," Chief Financial Officer Jesper Brandgaard
told reporters as he presented second-quarter results.
"Whether this was a routine check or triggered by the (GSK)
case reported recently in the media is not completely clear to
us. However, the local AIC hasn't accused Novo Nordisk of any
Chinese police have detained four Chinese executives of GSK
and questioned at least 18 other staff amid allegations that the
drugmaker funnelled up to 3 billion yuan ($489 million) to
travel agencies to facilitate bribes to doctors and officials.
At the same time, the powerful National Development and
Reform Commission is examining pricing by 60 local and
international pharmaceutical companies.
AstraZeneca Plc, meanwhile, has had a sales
executive detained in Shanghai, while Eli Lilly & Co and
Belgium's UCB SA have also had visits to premises in
Industry analysts at Wells Fargo Securities, citing the
views of a China expert with law firm Ropes & Gray, said the
knock-on effect would be to crimp growth for multinational
pharma companies in China, where the authorities are expected to
push for harsher price controls.
As a result, the rate of growth for drug sales in the
country could fall to around 10 percent a year from an
historical 20 percent, they wrote in a research note.
NOVO RAISES OUTLOOK
For Novo investors, the potential problems in China were
offset by the company's decision on Thursday to raise its
full-year results forecast for a third time in six months, after
double-digit sales growth in diabetes drug Victoza and modern
insulin helped lift second-quarter operating profit above
It now expects 2013 sales growth in local currencies of
between 11 and 13 percent, compared with 9 to 11 percent
previously. Its forecast for operating profit growth was
increased to between 12 and 15 percent from around 10 percent.
"Given the tendency of management to beat and raise
throughout the year, we expect consensus to move 1 to 2 percent
upwards to the higher end of the new guidance range," said
Deutsche Bank analyst Tim Race.
Shares in Novo were up 0.8 percent at 969 crowns by 1134
Profit growth was driven by a 12 percent increase in sales
of modern insulins compared with the same quarter a year ago and
a 25 percent rise in sales of diabetes drug Victoza.
Group sales rose 10 percent to 21.38 billion crowns, against
an average market forecast of 21.26 billion given in a Reuters
poll of analysts.
The company said that based on feedback from the United
States Food and Drug Administration (FDA) regarding the design
of a cardiovascular outcomes trial for its new long-acting
insulin Tresiba, it now expected to start the trial before the
end of the year.
The additional trials for the drug follow a blow in the
United States in February when the FDA refused to approve
Tresiba and instead asked for extra tests to assess potential
Earnings before interest and tax (EBIT) rose to 8.59 billion
Danish crowns ($1.5 billion) in April-June from 7.65 billion in
the second quarter last year, above an average forecast of 8.27
billion crowns given in a Reuters poll.