COPENHAGEN (Reuters) - Denmark’s Novo Nordisk on Wednesday gave a cautious outlook for 2013, reflecting uncertainty over approval for its new long-acting insulin in the United States and slowing global insulin growth.
The world’s biggest insulin producer is currently awaiting the outcome of an assessment from a U.S. expert panel on ultra long-acting insulin degludec, which Novo plans to market under the brand name Tresiba.
Last week, the panel said it would study the heart safety of the drug, stoking concerns that degludec’s benefits may not outweigh its potential risks in the eyes of U.S. regulators, who have already delayed a decision on the product.
Novo Nordisk forecast 2013 operating profits and sales growth in high single digits, measured in local currencies.
The group has consistently delivered revenue growth of at least 10 percent and earnings before interest and tax (EBIT) growth of around 15 percent since 2006.
“The impact of that product (Tresiba) on the key U.S. market is very very hard to predict, and our growth outlook had to take that into consideration,” Chief Financial Officer Jesper Brandgaard said at a news briefing. “We are leaving ourselves flexibility.”
It raised its full-year 2012 outlook after a 40 percent spike in third-quarter core profit beat analysts’ forecasts.
“The expectations for 2013 sales could have been a little higher,” said Sydbank analyst Soren Lontoft. “The earnings forecast looks fine considering the high costs for the launch of Tresiba in the new year.”
Generic competition, government price reforms, a global decline in insulin volume growth and significant costs related to the launch of degludec were also reflected in the 2013 outlook.
“Whilst the 2013 guidance is just broadly in line, this is a preliminary number and we would expect this to be increased at the full-year 2012 results,” Jefferies said in a note to clients.
In the third quarter of 2012, Novo Nordisk reported a 40 percent rise in EBIT to 7.86 billion Danish crowns ($1.37 billion), beating an average 7.23 billion forecast in a Reuters poll of analysts.
The result was driven by a 62 percent jump in sales of diabetes drug Victoza, one of Novo’s biggest growth drivers, and a 23 percent rise in modern insulin sales.
Sales rose to 19.85 billion crowns, roughly in line with analysts’ average 19.92 billion estimate.
Novo raised its 2012 sales growth forecast in local currencies to 10 to 12 percent from 9 to 12 percent and said it expected operating profit growth of 16 to 18 percent versus 15 percent previously.
Shares in Novo Nordisk rose 0.7 percent by 1200 GMT, against a 0.2 percent fall in the European healthcare sector index and a 0.1 percent rise in the Copenhagen stock exchange’s benchmark index.
“The third quarter report was better than we had expected,” said DNB analyst Rune Dahl.
Novo Nordisk shares have risen 42 percent since the start of the year, outpacing the European healthcare index which has gained about 12 percent.
Novo Nordisk said it would launch a new share buyback program shortly.
Last week, French drugmaker Sanofi forecast 2012 earnings would fall less than expected as cost cuts and demand for diabetes and rare disease drugs cushion the blow from patent expiries.
Also last week, Eli Lilly and Co and Bristol-Myers Squibb Co posted lower-than-expected profits as their former top medicines were pounded by cheaper generics and sales of other products disappointed.
Additional reporting by Shida Chayesteh; Editing by Charlotte Cooper