Lars Rebien Sørensen, Health Care
Before I address the important issues Health Care is facing, let me start by giving you a brief update of the sales performance in 1996.
Slide 13 - Health Care - Sales Development 1992-1996
Total sales for Health Care increased 12% from DKK 9,934 million in 1995 to DKK 11,078 million in 1996. As you can see, 1996 was another year with a healthy underlying growth in the core businesses. The growth in volume and product mix was 14%. Overall prices remained stable throughout the year and currencies had a negative impact of 2% on the total sales growth.
Slide 14 - Health Care - Sales 1995-1996
Sales of Diabetes Care products increased by 15%. The very satisfactory development is attributable to strong performances in a number of markets. In Japan we were able to further upgrade the market to our pen devices while at the same time gaining market share. Novo Nordisk's market share in Japan is now 75.9%. In the US where we initiated on 1 June 1996, a direct-to-consumer marketing campaign for NovoPen® 1.5, sales grew by 12% in local currencies, although our overall market share decreased slightly. And 1996 was a year where we saw high growth rates in the emerging markets, notably the Eastern European and Asian countries.
In 1996, the market for Women's Health Care products business was in particular hurt by a difficult market situation in Germany. For Novo Nordisk, sales caught up in the 4th quarter of 1996 resulting in a 12% top-line growth for the full year of 1996 - not bad after all.
Sales of human Growth Hormone, Norditropin®, was DKK 1,472 million - marginally lower than the 1995 sales. The sales growth was in particular hurt by the weak JPY, which in 1996 was 11% lower than in 1995 and a 13.2% government mandated price reduction in Japan in April of 1996. The underlying volume growth in our human Growth Hormone business, however, was 16% in 1996 making Novo Nordisk the fastest growing company within human Growth Hormone.
Sales of Other Health Care products increased by 2% bearing in mind that 1995 includes sales from the divested Plasma Product unit. Sales of Seroxat® increased by 22% to DKK 312 million. NovoSeven®, which was introduced in the first country in Europe in February 1996 sold for a total of DKK 150 million in its first ten months on the market.
Now let me turn to some of the important issues that my colleague Kurt Anker Nielsen mentioned in the introduction.
1996 was another year with strong competition in the Diabetes Care market. The first short-acting insulin analogue was introduced. Glucophage or Metformin became the preferred OHA in the US. And Troglitazone, another insulin sensitiser, was approved by the FDA and will be launched in the US soon.
I think it is fair to say that at least some of you have been concerned about the impact of this on Novo Nordisk's Diabetes Care business.
Slide 15 - Short-acting Insulin Analogues
The present short-acting insulin analogues have a faster onset and shorter duration of action compared to the regular short-acting human insulin.
Theoretically, this should provide a more natural blood glucose regulation compared to regular human insulin. However, we do not expect to see an improvement of the overall blood glucose control measured by HbA1c until it has been investigated how to better use the present longer-acting insulin in combination with the short-acting analogues or until new improved longer-acting insulin has been developed.
Novo Nordisk is addressing both issues. As my colleague Bruce Carter mentioned, Novo Nordisk has a premixed short-acting insulin analogue and a long-acting insulin analogue, both in Phase 1 clinical trials. Let me talk about the long-acting insulin analogue and why we are excited about the results we have achieved so far.
Slide 16 - Action Profile of Novo Nordisk's Long-acting Insulin Analogue
You may remember this slide that illustrates the action profile of our long-acting insulin analogue, NN 304, shown last year. As you can see, NN 304 has a longer duration of action and a smoother profile than NPH insulin, which is today's most used long-acting insulin.
The current intermediate and long-acting insulin need certain improvements, particularly in the time of duration of action. An improvement of the action profile in terms of both a longer duration of action and a less pronounced peak effect compared to that of the most widely used basal insulin, NPH, will be a significant step forward in the insulin treatment of diabetes. This will address a very imminent problem of controlling the day and night-time blood glucose levels, thus enabling an improved metabolic control.
Slide 17 - The Long-acting Insulin Analogue is Important
The improved action profile furthermore enables reducing the risk of hypoglycaemic events as compared to standard basal insulin. NN 304 will come in a soluble form, thus eliminating the necessity to shake the vial or cartridge before injection.
And finally from a commercial standpoint, a long-acting insulin analogue is highly interesting as the majority of the insulin market, approximately 50%, is constituted by the long-acting insulin segment.
Now let me turn to the issue of new classes of OHAs.
It has been mentioned that these insulin sensitisers could have an adverse impact on the growth of the insulin market. When discussing glycaemic control, however, it is important to stress that no currently available oral medication has shown the same level of efficacy as insulin. On the contrary we expect that the insulin sensitisers will increase the focus on diabetes which in most cases, sooner or later, will lead to the use of insulin.
Novo Nordisk is currently in the process of finalising the registration file for
NovoNorm. NovoNorm is a new class OHA with a unique mode of action. 21222122
NovoNorm is a fast-acting OHA that stimulates the pancreatic insulin secretion which means that the tablet can be taken just before the meal. In addition
NovoNorm has a short half-life and is eliminated through the bile. 21222122
We will file for regulatory approval in the US, Europe and Japan mid-year.
In the US, we tested our new NovoPen® 1.5 Direct-To-Consumer campaign in eight cities before we launched the nationwide campaign on 1 June, 1996.
Slide 19 - NovoPen®. Direct-to-Consumer campaign in the U.S.A.
In 1996, we distributed more than 160,000 NovoPen® 1.5 to the market. We generated 130,000 calls to our hot-line number in Princeton. And the reaction from competition seems to suggest that we are doing it right this time. By December 1996 our share of new prescriptions was 3.7% which is close to three times higher than the same month in 1995. Another indication that the penetration of pen devices is going in the right direction. With the successful introduction of our pen devices we hope to be able to increase our share of the US market from currently 20% over the next years.
Slide 20 - Diabetes Care. Cartridge and Pre-filled Device Penetration 1996 (Volume)
On a global scale, the penetration of pen devices continue to increase in Europe and Japan. Insulin in delivery systems now comprises 24.3% of the total insulin market. Novo Nordisk holds a leading position with a 74.9% share of this market.
In the disease management area we signed up with the Mayo Clinic in 1996. The partnership offers Novo Nordisk great opportunity for a broad cooperation. Initially we are focusing on furthering the knowledge and quality of diabetes care, but opportunities also lies within Novo Nordisk's other therapy areas such as women's health care.
Let me sum up on Diabetes Care. We are taking the competitive challenge/situation within our most important business seriously. But we speak with confidence when we say that we are the leading company within diabetes care and that we intend to remain so. In a year with sharpened competition Novo Nordisk was able to grow its Diabetes Care business by 15%. I think that is a result that speaks for itself.
I will now turn to Women's Health Care.
The total market for HRT products increased by 15% to USD 2.03 billion in 1996. The oral and transdermal combination products showed the strongest growth rates with growths of 39% and 23%, respectively.
Slide 21 - Women's Health Care. Novo Nordisk's Market Share of Systemic HRT Market in 1996 (Volume)
Novo Nordisk's HRT sales increased by 12% in 1996 and our worldwide market share increased to 7.3%. The sales growth was below expectations in particular due to difficult market conditions in Germany and in the UK.
However, we continue to be optimistic about the future.
In 1996, we entered into a global HRT alliance with Rhône-Poulenc Rorer (RPR). The agreement, which was signed in May 1996, is a global umbrella agreement where local agreements will be signed on a country-by-country basis. Japan is not included. In August 1996 we signed the first local co-promotion agreement in the UK and in February of this year we signed a co-promotion agreement in the important German market. Further agreements will be signed on a local basis throughout the year.
Slide 22 - Women's Health Care. HRT Alliance with Rhône-Poulenc Rorer
We see the alliance with RPR as a very complementary one. We have a strong portfolio of oral HRT products. RPR is strong in transdermal HRT products. The combined portfolio of products is second to none. Equally important, RPR has a large sales force in the important US market, where Novo Nordisk is not yet present. We have three products in Phase 3 clinical trials for the US market, the most promising being Nuvera, a low-dose version of our continuous-combined product Kliogest®. 2122
Nuvera as well as our oral oestrogen only and topical HRT products will be filed for FDA approval in 1997. 2122
Finally, Novo Nordisk has an excellent reputation in the specialist market, whereas RPR has a strong presence in the primary care segment.
The introduction of HRT products in the US as well in other Southern European countries is expected to substantially increase Novo Nordisk worldwide market share over the coming years.
We have lowered our expectations for the overall growth of the HRT market slightly. The expected HRT market volume growth over the next five years is predicted to be 10-15%. However, this new forecast takes into account the potential impact of Non-Steroid Estrogen Receptor targeted Therapeutics (NSERTs) on the HRT market. Novo Nordisk's Levormeloxifene, which is in Phase 2 clinical trials is an example of one of these new compounds. The advantage of Levormeloxifene is that it will offer the benefits on bone and some of the benefits to the cardiovascular system, without stimulating the breast or endometrial tissues.
Slide 23 - Growth Disorders. Novo Nordisk's hGH Market Share
Novo Nordisk is still the fastest growing company within human growth hormone in terms of volume growth. Based on an underlying volume growth of 16% in 1996 Novo Nordisk continued to strengthen its position as number two outside the US. Our market share in volume terms increased to 20.3%. In 1996, the total market for human growth hormone decreased 10% to USD 1.29 billion. This decrease was mainly due to the government dictated price decrease in Japan of 13.2% and the depreciation of JPY.
In December 1996, the US Court of Appeals lifted the Preliminary Injunction against Novo Nordisk thereby removing the legal obstacles for launching Norditropin® in the US. I am pleased to say that Norditropin® was officially launched in the US on 20 February of this year. Our expertise with endocrinologists and other health care professionals will help us to gradually establish a position in the US.
The expected market growth over the next five years is in the range of 0-5% p.a. However, we expect to outgrow the market.
We continue to be excited about the sales performance for our new life-saving drug for hemophiliacs with inhibitors to Factors VIII and IX. NovoSeven® obtained marketing authorisation in EU, Norway and Switzerland in the 1st quarter of 1996 and managed to generate sales of DKK 150 million in its first ten months in the market.
We hope to obtain FDA approval for the marketing of NovoSeven® in the US within the next few months. The file for marketing approval in Japan was submitted in February 1996, but due to changes in the approval procedures in Japan, the approval there is expected to be lengthier than earlier anticipated.
The total market potential for NovoSeven® could be at the level of USD 200 million.
Gabitril®, our new anti-epileptic drug, currently indicated for add-on therapy, was launched in Denmark on 4 November 1996. Gabitril® obtained EU mutual recognition approval in October 1996 and was filed in seven additional countries. We expect to launch Gabitril® in several European countries throughout 1997.
Gabitril® is not a drug that will have a significant impact on our top-line in the next couple of years. First, the AED market is known to be very conservative and difficult to penetrate. Secondly, we need to have the monotherapy indication approved before we will really make an impact in the market. We expect to file for the monotherapy indication in Europe in 1997.
Finally, let me summarise why my colleagues and I believe that Novo Nordisk Health Care is geared towards the future.
Slide 26 - Novo Nordisk Health Care is geared towards the Future
We have a strong position in our core businesses. Our businesses are generating double-digit underlying growth rates. And, as my colleague Bruce Carter pointed out, our major product, insulin will not face patent expiration - it is a branded generic.
We have a sound pipeline of new products. A pipeline that has been realigned to reflect our focused business strategy.
And we are the partner in a number of exiting discovery, development and commercial alliances.
With these words I will give the word to Steen Riisgaard, Corporate Executive Vice President, Enzyme Business.
