COPENHAGEN Denmark's Novo Nordisk hiked its full-year sales and profit targets after rising demand for diabetes drug Victoza and insulins helped the company beat second-quarter expectations, sending its shares to an all-time high.
The world's biggest insulin producer also revealed good results from a clinical trial testing a new combination of two diabetes medicines, cementing its dominant position in a growing segment as the number of diabetes sufferers worldwide rises from its current level of more than 300 million.
Sales of Victoza, one of Novo's biggest growth drivers, jumped 83 percent in the second quarter, while sales of insulins grew 23 percent, both exceeding forecasts.
Novo said phase three study data for combination treatment IDegLira for type 2 diabetes had shown the benefits of its product Tresiba in combination with Victoza.
"Novo Nordisk has reported an impressive Q2 statement demonstrating the continued strength of its insulin franchise," Deutsche Bank said in a note to clients.
The shares jumped to an all-time high of 980.5 crowns, before paring gains to trade up 3.1 percent at 955.0 by 4:48 a.m. EDT, against a 0.2 percent rise in the European healthcare index and a 1.5 percent rise in the Copenhagen bourse's bluechip index.
The shares have risen by about 45 percent since the start of the year, outpacing the European healthcare index which has gained about 13 percent, but Novo Nordisk said it had no plans for a stock split.
Competition from rival diabetes drug Bydureon made by Amylin Pharmaceuticals had so far proved to have little impact on Victoza in Europe, Chief Financial Officer Jesper Brandgaard said in a webcast.
"We believe there is a solid growth base for our Victoza portfolio in Europe," Brandgaard said.
Earnings before interest and tax (EBIT) rose to 7.65 billion Danish crowns ($1.27 billion) in April-June from 5.27 billion in the second quarter last year, beating an average 6.65 billion forecast in a Reuters poll of analysts.
Sales grew 21.7 percent year-on-year to 19.47 billion crowns, also beating analysts' average 18.89 billion estimate.
"It is a very strong result which clearly exceed expectations that were already high," said Sydbank analyst Soren Hansen.
"A raise of outlook was expected, but even in this area the company delivers with a bigger rise than forecast," Hansen said.
Novo said it now expected full-year sales growth in local currencies of 9 to 12 percent instead of a previous forecast range of 8 to 11 percent, and operating profit growth of 15 percent instead of an earlier forecast of "at least 10 percent".
"We are very satisfied with the financial performance in the first half of 2012, driven by a continued strong performance of our modern insulins and Victoza," Chief Executive Lars Rebien Sorensen said in a statement.
As part of the fight to capture diabetes patients world-wide, the company has also said its long-lasting insulin degludec could become a blockbuster - defined by the industry as a treatment that generates more than $1 billion in sales within five years of its launch.
Last month, French drugmaker Sanofi posted a slower-than-expected decline in second-quarter profit as growth in emerging markets and diabetes sales offset competition from cheap drug copies and austerity measures in Europe.
(Reporting by Mette Fraende and Shida Chayesteh; Editing by Sophie Walker and Helen Massy-Beresford)
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