Lars Rebien Sørensen, Health Care Business
Slide 12 - HCB - Sales development 1991-1995
Total Health Care Business sales increased from DKK 9,236 million to DKK 9,934 million in 1995. The underlying growth in volume and product mix was 14% but sales only increased by 8% due to a negative impact from currencies of 6%. Prices were stable.
Slide 13 - HCB - Sales 1994-1995
Sales of Diabetes Care products rose by 4%. Underlying growth was approximately 11% when the negative impact of currencies, especially USD, is disregarded. The progress is attributable to product mix improvements combined with steadily increasing market shares in several countries, notably Japan and Germany. The product mix improvements reflect a constant shift in demand towards Penfill® for NovoPen®, and the disposable pen NovoLet®, at the expense of traditional vials.
Although the supply situation for insulin for the U.S. market returned to normal at the beginning of 1995, we did not manage to achieve the progress we might have hoped for after a difficult year in 1994. Accordingly, sales in USD only rose marginally compared to the year before.
Diabetes Care's contribution to total Health Care Business turnover was 68% in 1995 compared with 70% in 1994.
Sales of products within Women's Health Care (HRT - hormone replacement therapy) rose by 24%. Especially the launch of Kliogest®/Kliofem® in the U.K. in early 1995 contributed to this growth.
Sales of Norditropin® (human Growth Hormone) increased by 11%. The progress reflected a positive development in many markets, in particular Japan.
Sales of other Health Care products rose by 19%. This is primarily due to steady, significant growth of Seroxat® in the Nordic countries, where sales rose by approximately 65%.
Slide 14 - Diabetes Care - Overview
Today our product range within diabetes care comprises human and animal insulin and glucagon, the world's finest needles and the most widely used and reliable devices. Novo Nordisk has agreed with LifeScan to take over the distribution and sales of LifeScan's meters in the Nordic countries and in Japan. Both these agreements had effect from early 1996.
In 1995, the value of the insulin market in the industrialized world was USD 1.9 billion, an increase of 10% from 1994. The markets for Oral Hypoglycaemic Agents and Blood Glucose Monitoring grew by 12% and 15%, respectively, to USD 1.7 billion and USD 1.9 billion.
The market growth within the next five years will mainly come from expanded use of insulin in the Type 2 segment. Novo Nordisk has an ongoing program highlighting the benefits of insulin for patients who are poorly controlled even on a maximum dose of OHAs.
The ongoing upgrading from animal insulin to human insulin and from insulin in vials to devices, is adding 4 to 5% to the market growth. The total growth of the market over the next five years is expected to be in the range of 9-11% p.a. The growth of the OHA market and the BGM market over the next five years is expected to be 12-14% p.a. and 10-12% p.a., respectively.
Slide 15 - Diabetes Care - Strategy for growth
At last year's Investor Presentation we showed you this slide, illustrating the two dimensional strategy we pursue in order to gain a complete range of drugs, devices and services.
Slide 16 - Diabetes Care - Implementing the strategy
And what have we done since then to implement this strategy?
We have complemented our product line with a Blood Glucose Monitoring device through the alliance with LifeScan. We continue the development of NovoNormTM, our Oral Hypo-glycaemic Agent, which is in late phase 3 clinical trials in Europe and the U.S.A. and phase 2 in Japan. Other projects include GLP-1, our short-acting insulin analogue, our long-acting insulin analogue (preclinical) and NNC 05-1869 (preclinical) for diabetic neuropathy.
Within the services dimension we are establishing the baseline at the Steno Diabetes Center and at other centres of excellence. At these sites we are developing dedicated data collection systems - the Diabetes Electronic Medical Record - the only way to obtain real life, high quality outcomes data.
Additionally we have developed a multimedia computer programme to optimize the training of physcians and other healthcare professionals as well as of new Novo Nordisk diabetes care staff. Our Health Economics Program is being used in our dialogue with health authorities and other payors and it has been shown at several international congresses where it has generated a lot of interest.
In Denmark, we participate in a joint development program providing GPs with diagnostic information and treatment guidelines for selected chronic diseases. Our contribution covers all input concerning diabetes.
Slide 17 - Alliance with LifeScan - Global cooperation agreement
During 1995, Novo Nordisk and LifeScan signed an agreement to co-operate world-wide within the field of diabetes.
This is an umbrella agreement under which each Novo Nordisk affiliate will negotiate a national agreement with its LifeScan counterpart in order to decide how to utilize the two companies' resources best possible in each market.
In two local agreements Novo Nordisk has the ooportunity to market and distribute LifeScan's BGM products in:
- Scandinavia covering Denmark, Finland, Norway and Sweden
- Japan
Co-operation on promotion and sales activities are initiated in other major markets, for example the U.S.A., Canada, Italy and France, and expansion of activities will follow rapidly in the near future. We expect a continuing roll-out of agreements during 1996.
Slide 18 - Diabetes Care - Novo Nordisk's market shares in selected geographical regions 1995
In all major makets, except the U.S.A., Novo Nordisk has the leading market position. Even in Germany, Hoechst's home market, Novo Nordisk is on par with 45.3% of the total market, but larger both in the insulin segment as well as in overall value terms. However, due to the developments in the U.S. market, where Novo Nordisk has a market share of only 20% - our IMS market share declined in 1995 to 41.1%, down 0.5% from 1994.
Slide 19 - Diabetes Care - Novo Nordisk's insulin market share
The market share in the U.S.A. has stabilized, but is still lower for the whole year compared to 1994 due to the fact that the delivery shortages in the U.S.A. in 1994 did not really appear until the third quarter of 1994.
Our production facility in Clayton, North Carolina, is under inspection by the FDA we are speaking and will start to deliver to the North American market when the facility passes the Pre-Approved inspection, clearly demonstrating our commitment to this market.
Slide 20 - Diabetes Care - Cartridge penetration
Insulin in delivery systems now comprises 21.4% of the total insulin market. Novo Nordisk holds a leading position with a 76.5% share of this market. Our most recent launches of new products, NovoPen® 1.5 ml and 3 ml, also in coloured versions for children, have been very well received due to the easy and reliable use of the products.
Slide 21 - Diabetes Care - Cartridge Penetration
The penetration of pen devices in Europe and Japan is around 30% and 50% respectively, while the use of insulin delivery systems is still only marginal in the U.S.A. Novo Nordisk is still the only supplier of these products to the U.S. market. In both Japan and Germany our insulin delivery systems have been the most important reason for our market share gain in the last couple of years. The outlook is still positive for these countries.
None of the competitive systems have strong competitive advantages or contains new technology that threatens Novo Nordisk leading position within insulin delivery systems, even though our competitors in 1995 have intensified their interest in insulin delivery systems.
Slide 22 - Womens's Health Care - Overview
The total HRT market increased in 1995 by 16% in value to USD 1.8 billion. The oral and transdermal combination products showed the strongest growth in 1995 with 34% and 75% value growth, respectively.
The expected HRT market growth over the next five years is predicted to be 15% p.a. due to the introduction of new and improved products for osteoporosis, new indications such as CVD and wider acceptance of the benefits of HRT products.
Slide 23 - Women's Health Care - Novo Nordisk's HRT market share
On this background, Novo Nordisk HRT sales increased over 24% in 1995, increasing the Novo Nordisk world-wide share to 7.1% in volume terms and giving us a stronger position as a world-wide number three in the total HRT market (after AHP and Ciba, now part of Novartis).
Slide 24 - Human Growth Hormone - Overview
Novo Nordisk s products in the human growth hormone area include Norditropin®, our recombinant human Growth Hormone, and our convenient pen device, Nordiject®.
In 1995, the total market for Growth Hormone increased slightly to USD 1.4 billion. This represents an increase of approximately 2%.
Two new indications, Chronic Renal Insufficiency and Adult Replacement Therapy will contribute positively to the future market growth. Factors negatively influencing market growth are increased governmental focus on reducing health care expenditures.
The expected market development over the next five years is 0-5% p.a.
Slide 25 - Human Growth Hormone - Novo Nordisk's market share
Novo Nordisk continues to strengthen its position within human Growth Hormone. In 1995, we increased our volume market share by 1.7% to 19.7% which further solidified our number 2 position outside the U.S.A.
In May 1995, we received FDA approval for Norditropin® but were unable to launch in the U.S.A. due to the patent litigation issue with Genentech. With the vacating of the injunction in March 1996 we have moved another step forward in the resolution of legal obstacles that prevent us from entering the U.S. market. Final resolution is still pending.
Slide 26 - Other Health Care - NovoSeven
Before closing, I would like to update you on two exciting drugs that Novo Nordisk will launch in 1996:
NovoSeven® is a safe and efficacious first line product for treatment of various bleeding episodes and surgery in patients with inhibitors to coagulation factors VIII or IX.
Novo Nordisk received the European Commission's approval of NovoSeven® in February 1996 and has received approval from the Norwegian and Swiss authorities. Launch is under preparation in each of the European countries.
A file has been submitted in Japan, and we will shortly submit the Product License Application (PLA) in the U.S.A. in 1996.
Slide 27 - Other Health Care - Gabitril
GabitrilTM is a new unique anti-epileptic drug - the first selective Gamma Aminobutyric Acid (GABA) uptake inhibitor.
GabitrilTM was filed in Europe in the third quarter of 1995 and in the U.S.A. by Abbott in the fourth quarter of 1995. Filing in Japan will take place at a later stage.
Initially we seek approval for add-on therapy and studies for mono-therapy are undergoing with a view to make GabitrilTM a first line treatment drug.
Joint development has taken place with Abbott Laboratories since 1989. GabitrilTM is out-licensed to Abbott in the U.S.A., Canada and Mexico, while the rest of the world is Novo Nordisk's territory.
NovoSeven® and GabitrilTM fall outside of our core business, but are seen as novel drugs that meet unmet medical needs, as NovoSeven® saves lives and GabitrilTM significantly improves the quality of life and life expectancy of refractory epilepcy patients.
