Lars Rebien Sørensen - Health Care
1997 was another very exciting year for Health Care. I will start my presentation by reviewing the sales performance for Health Care in 1997.
Slide 5 - Health Care - Sales 1996-1997
Total sales in Health Care increased by 13% in 1997. As in previous years, the growth in sales was fuelled by underlying volume increases in all of the therapeutic areas. The overall volume/mix growth was 11% in 1997, the impact from currency exchange rates was positive by 4% while the impact from prices was negative by 2% which is, as you know, mostly explained by the general mandatory price reduction of 13% on human growth hormone in Japan in April of 1996.
It was extremely encouraging to see that sales of Diabetes Care products increased by 14% in 1997. We find the strong sales growth encouraging because this, our most important therapeutic area, has been characterised by increased competition over the last few years. However, we have been able to maintain our position as the worldwide leader in Diabetes Care and we intend to vigorously defend that position.
Within Diabetes Care, we continued to gain market share in Japan in 1997. Our success in this difficult market can first and foremost be attributed to our outstanding insulin pen devices. While we recorded strong growth rates in most markets, I would like to mention Russia and the markets in Central Europe as particularly strong contributors to the sales performance in Diabetes Care.
The one market where we did not see a satisfactory sales performance in 1997 was in the US. Our NovoPen® 1.5 Direct-To-Consumer Campaign did not catch on as expected, and we recorded a 9% decline in sales in local currency. With the signing of a co-promotion agreement with Schering-Plough in January of this year, covering both NovoNorm®/PrandinTM as well as our full line of insulin products and delivery devices, we have now taken a significant step to improve our position in the US market which continues to present a major upside for Novo Nordisk. I will revert to the co-promotion agreement with Schering-Plough later in the presentation.
Sales of Women's Health Care products increased by 9% in 1997. This market is characterised by continued, strong competition and lower than expected market growth in the important German market. In November 1997 we submitted a NDA to the US Food and Drug Administration asking for approval of a refined low-dose version of our continuous combined HRT product, Kliogest®. This NDA submission marks a major milestone for us in that this is the first time we are seeking approval for a HRT product for the important US market, which represents more than half of the world market. The European file for this product was submitted for approval in September 1997. Both files were for the HRT indications, while files for the prevention of osteoporosis are being finalised for submission at the end of the year.
Sales of Growth Disorder products increased by 7% in 1997. The growth was impacted by the earlier mentioned price reduction on Norditropin® in Japan as well as by increased competition also in Japan. In volume terms, sales increased by 9%, which again in 1997 made Novo Nordisk one of the fastest growing companies within human growth hormone. Another significant milestone was achieved for us with the launch of Norditropin® in the US market in February 1997.
Sales of Other Health Care products which mainly include sales of Seroxat® in the Nordic countries, NovoSeven® and Glucagen® for the motility indication increased by 19% in 1997. The sales growth was driven by an excellent performance for NovoSeven®, our unique product for haemophiliacs with inhibitors to Factors VIII and IX, which was introduced in Europe in 1996. Sales of Seroxat® in the Nordic countries declined in 1997 compared to 1996 due to parallel imports and intensified competition.
Now to the Diabetes Care area.
You may recall our Diabetes Care strategy. Our strategy as we defined it at the end of 1994 is to become a worldwide Diabetes Care provider, meaning that we have made a commitment to provide a full range of products and services to people with diabetes. With the US Food and Drug Administration's (FDA) approval of NovoNorm®/PrandinTM in December 1997, Novo Nordisk will for the first time offer an Oral Hypoglycaemic Agent (OHA) to people with Type 2 diabetes who are not adequately controlled by diet and exercise.
Before I go into details with NovoNorm®/ PrandinTM I would like to talk about why it is very important for us to build a strong presence in the market for Type 2 diabetes.
Slide 6 - Type 2 Diabetes - Patient Projections (million patients)
The number of people with Type 2 diabetes is expected to grow significantly in the coming years. The expected growth can primarily be attributed to the changing lifestyle, particularly in Asia but also in some of the other emerging markets in the world. It is also expected that more patients will be diagnosed due to increased focus on diabetes. And the number of people with Type 2 will increase due to a tightening of the criteria for diagnosing diabetes. This was seen in the US in 1997 when the American Diabetes Association lowered their diagnosis criteria for diabetes. As a consequence of the new ADA treatment guidelines it is estimated that the number of undiagnosed people with Type 2 diabetes in the US has increased from 8 million to 10 million.
Slide 7 - Type 2 Diabetes - Underlying Mechanisms
Broadly speaking, there are two underlying mechanisms that cause Type 2 diabetes.
Impaired insulin secretion is the basic, underlying cause of Type 2 diabetes. The inability of the beta-cells in the pancreas to respond to glucose loads, especially during meal times, is particularly apparent in the early stages of Type 2 diabetes. Further, impairment of insulin secretion increases over time.
So-called insulin resistance, an insensitivity to insulin increases with age, body weight and a sedentary lifestyle. Studies indicate that insulin resistance is not always associated with diabetes.
Many diabetics suffer from a combination of both impaired insulin secretion and insulin resistance.
Let me try to graphically illustrate how impaired insulin secretion in people with Type 2 diabetes compare to the insulin secretion in normal people.
Slide 8 - Insulin Secretion in Normal People and People with Type 2 Diabetes
The yellow curve on this slide illustrates the insulin secretion in a normal person having three main meals a day, while the red curve illustrates the insulin secretion in a person with Type 2 diabetes.
In normal people, as you can see, there is a sharp increase in insulin secretion in connection with meals. You will also notice that the insulin secretion fades quickly after each peak level and returns to "base line". Most people with Type 2 diabetes still secrete insulin (in the pancreas beta-cells), although the amount typically is reduced. What you can see from the red curve though, is that they do not secrete quite the sufficient amounts during and after meal times. These people suffer from impaired insulin secretion.
Now, what you want to do when you treat any type of diabetes, is to try to mimic as closely as possible the insulin secretion pattern in a normal person. In other words, what you want to do here is to provide the patient with a treatment that makes the red curve come closer to the yellow curve. In other words we want to create "a more physiological insulin profile" compared to that of the currently available products.
And this is exactly what NovoNorm®/PrandinTM does.
Slide 9 - The NovoNorm®/PrandinTM Concept
NovoNorm®/PrandinTM is a tablet to be taken just before each main meal. If a meal is skipped, the tablet is too. NovoNorm®/PrandinTM is fast acting with a short half-time which means that the pharmacokinetic and dynamic properties of NovoNorm®/PrandinTM restore the insulin secretion pattern around meal times towards normal. Furthermore, NovoNorm®/ PrandinTM excretes via the bile which could prove to be a benefit for patients suffering from kidney impairment.
NovoNorm®/PrandinTM is a highly efficacious product when given as first line treatment. In one of the clinical studies we showed that the long-term measurement for control, HbA1c, for the group treated with NovoNorm®/PrandinTM decreased compared to the group treated with placebo in previously naïve patients and in patients previously treated with oral hypoglycaemic agents by 2.1% units and 1.7% units, respectively. FDA granted the product priority status review in August of 1997. NovoNorm®/PrandinTM received marketing clearance from the FDA in late December 1997. The registration file was submitted to the European authorities in June 1997 and we expect to file for regulatory approval in Japan later this year. NovoNorm®/PrandinTM is in-licensed from Boehringer Ingelheim.
Slide 10 - NovoNorm®/Prandin and Metformin Therapy: Mean Hba1c and FPGTM Concept
We also studied NovoNorm®/PrandinTM in combination with metformin in patients not satisfactorily controlled on exercise, diet and metformin alone. It is extremely encouraging that combination therapy with NovoNorm®/ PrandinTM and metformin resulted in synergistic improvement in glycaemic control compared to NovoNorm®/PrandinTM or metformin mono-therapy. Hba1c was improved by 1% unit and Fasting Plasma Glucose (FPG) decreased by an additional 35 mg/dL. Studies with insulin and with another insulin sensitiser, troglitazone, respectively, will take place in the Phase 3b programme.
As you can imagine we were excited about the FDA approval of NovoNorm®/PrandinTM in the US. But it also gave us some immediate issues to deal with.
Most importantly, the majority of people with Type 2 diabetes in the US is supervised by a primary care physician which means that in order to launch NovoNorm®/PrandinTM successfully we needed a strong sales force targeted towards that segment. As you know, our insulin sales force is primarily targeted towards the specialist segment so we had to either build up our own primary care sales force or partner up with a company with a strong presence in the primary care segment.
We carefully evaluated the situation and concluded that we would add most value to our business by partnering with a company which could boost our performance in the primary care segment.
And as you know, in January of this year, we announced a comprehensive co-promotion agreement with US-based Schering-Plough.
Slide 11 - US Co-promotion Agreement with Schering-Plough
We are very pleased with this arrangement for a number of reasons. First of all Schering-Plough has proven records of detailing pharmaceuticals within the primary as well as the managed care segments. The agreement enhances our ability to reach primary care physicians and strengthens and expands our position within managed care. Working together with Schering-Plough will give PrandinTM the support of an aggressive, entrepreneurial, focused sales force effort as we launch the product and develop it into a major brand.
Secondly, the agreement also covers our full line of insulin products including our pen devices and disposable needles.
Slide 12 - Diabetes Care - Cartridge and Prefilled Device Penetration 1997 (volume)
While we were able to increase the penetration of pen devices in the US to 2.0% in 1997, the performance was far from satisfactory. We feel confident that the launch of our NovoPen® 3 combined with an increased marketing effort through Schering-Plough will have a positive impact on the penetration of pen devices as well as our insulin market share in the US in 1998 and onwards.
Let me conclude on Diabetes Care by talking about our R&D pipeline. We have set ourselves an ambitious target. We want to build the industry's richest R&D portfolio in Diabetes Care. We will do this by building on our existing portfolio which is already quite strong.
Slide 13 - Diabetes Care Pipeline - Selected Projects in Diabetes Care Pipeline
We have a fast-acting insulin analogue, Insulin Aspart, in Phase 3 and various premix formulations in Phase 2. Our promising long-acting insulin analogue, NN304, is in Phase 2.
We also have some new interesting compounds for Type 2 diabetes in development. NN1869 for diabetic neuropathy is in Phase 1. DRF-2593, now in Phase 1, is the insulin sensitiser we licensed from Dr. Reddy's Research Laboratories in India.
Besides the compounds just mentioned, we are continuously working on improving our insulin delivery systems.
We think we are well under way to meet our ambition in Diabetes Care of having the broadest portfolio of products, exciting new drug candidates - and a full discovery pipeline.
Slide 14 - Women's Health Care - Major Events 1997
1997 was a year where the fundamental elements of our strategy to further strengthen our position in Women's Health Care were implemented. Within the framework of our strategic alliance with Rhône-Poulenc Rorer we implemented local agreements in a number of our most important markets, inter alia, Austria, Denmark, Finland, France, Germany, Greece, Norway, South Africa, Switzerland and the UK.
In 1997, we also filed for approval of NuveraTM, an improved low-dose version of our oral continuous combined HRT product, Kliogest®. The file was submitted to the European authorities in September 1997, while we submitted the registration file to the FDA in November 1997. Initially, we have filed for the HRT indications while files for the prevention of osteoporosis are expected to be submitted later this year. Please note that NuveraTM will not be the tradename for this product in the US. We have high hopes for NuveraTM as we believe that it might offer significant advantages to existing products in the market. Head-to-head trials have been designed to prove that. We are also excited with the fact that this is the first time Novo Nordisk has filed for approval of an HRT product for the US market which, by far, is the biggest market for HRT products in the world. Further, prices for HRT products are generally higher in the US compared to Europe.
Furthermore, our partner RPR filed for approval of EstalisTM, a new transdermal continuous combined HRT product in both Europe and the US in August 1997. These new products will also be marketed by Novo Nordisk in selected countries and in collaboration in other markets.
Novo Nordisk's total market share in the industrialised world was 7.1% in volume terms (cycles) in 1997, compared to 7.3% in 1996. With the anticipated entry into the US market, the biggest market for HRT products worldwide, we expect to increase our market share over the coming years and in collaboration in other markets.
While there continue to be a medical need for HRT products, we recognised the need to develop alternative therapies for treating the health conditions associated with osteoporosis.
The most promising compound in our R&D pipeline, levormeloxifene, which is currently in Phase 3 clinical trials, is designed to prevent as well as treat osteoporosis.
The market potential for new therapeutic compounds in the osteoporosis area appears stunning. The appendix contains a slide summarising a number of characteristics of the osteoporosis market.
Slide 15 - Levormeloxifene - Potential new therapy for the menopausal woman
Levormeloxifene, licensed from India, has moved through development at high speed and entered the Phase 3 clinical trials before year-end of 1997. Our goal is to enter the market as number two even though we realise that the race between second and third place will be close. Based on the Phase 2 clinical trials, our expectations for levormeloxifene are high and we see the product positioned as a new therapy for menopausal health, addressing the woman's need for osteoporosis prevention and treatment and cardiovascular health without negative effect on the breast such as breast tenderness, endometrium or menopausal symptoms.
As you can see on this slide, levormeloxifene has, based on preliminary data, demonstrated its beneficial effect on bone and lipids in the Phase 2 clinical trials after six months' treatment. There was a 50% decrease in markers of bone resorption, an effect which is similar to oestrogens. Levormeloxifene reduced total cholesterol by approximately 15% and LDL cholesterol by 25% without significant effects on triglycerides and HDL cholesterol indicating a highly competitive cardio-protective profile.
In the Phase 2 trials which involved 500 women in the US and Scandinavia, levormeloxifene at a wide dose range also appeared to have no increase in breast tenderness/pain, no aggravation of vasomotor symptoms, and no increased vaginal bleeding compared to placebo. However, all of these promising results must be reconfirmed in the Phase 3 clinical trials in much larger populations.
Clinical Phase 3 for both treatment and prevention of post-menopausal osteoporosis was initiated in November 1997. The programme includes more than 3,000 women in the US and Europe. Elderly post-menopausal women with established osteoporosis are participating in the trial for the treatment indication for at least three years. The prevention trial of two years duration includes a younger population of post-menopausal women.
For both indications low doses are investigated comparing to placebo and in the prevention trial additionally to HRT.
This slide compares the various therapeutic options for treating osteoporosis for impact on bone, lipids, impact on menopausal symptoms and cancer.
The estimated increase in Bone Mineral Density (BMD) for levormeloxifene after two years' treatment is based on bonemarkers supported by six months' BMD measurements. The markers of bone resorption were decreased by approximately 50% with levormeloxifene compared to only 30% published for raloxifene after six months' treatment. The increase in BMD after six months' treatment with levormeloxifene was 1-2% compared to approximately 1-2% published for raloxifene after two years' treatment. This leads us to believe, as you can see, that levormeloxifene could potentially increase BMD by 4-6%.
As you can see, levormeloxifene has a marked lowering effect on serum lipids. The lowering effect on the LDL-fraction is at the level of what is reported for the statins indicating a very competitive cardio-protective profile.
Levormeloxifene seems to have no aggravation of vasomotor symptoms even in an early post-menopausal population. This is an important competitive edge.
After 6 months' treatment levormeloxifene at therapeutic levels did not cause vaginal bleeding compared to placebo and no increase in breast tenderness was reported.
Based on endometrial biopsy data no increase in endometrial cancer risk is expected.
I would like to stress again that the levormeloxifene data are interim data from the Phase 2 clinical trials.
Also, I think it is important to point out that we see levormeloxifene as a supplement to the HRT products not a replacement. HRT products are the only products that provide relief for post-menopausal symptoms and as you can see, HRT does in fact also have a rather positive impact on bone and protection against cardiovascular disease through its lipid lowering effect.
Slide 19 - Novo Nordisk is well positioned in Women's Healthcare
In conclusion, we believe ourselves to be well positioned to further strengthen our position in Women's Health Care. We have a strong portfolio of oral HRT products. Our alliance with RPR gives us access to transdermal HRT products and an expanded geographical reach, eg. in the US, and we have a very promising compound, levormeloxifene, in Phase 3 clinical trials.
And now to Growth Disorders.
Growth Disorders continues to be an important business for Novo Nordisk and is currently the number two contributor, after Diabetes Care, to Health Care sales. Also, in 1997, we were one of the fastest growing companies within human growth hormone in volume terms. Our market share, also in volume terms, remained stable at 20.4% outside the US and 12.4% worldwide.
1997 marked the year where Novo Nordisk became a true global provider of human growth hormone with the launch of Norditropin® in February 1997 in the US. As you know, due to litigation with one of our main competitors, we entered the market as number five which means that we will only slowly establish a platform for Norditropin® in a highly competitive market.
Slide 20 - Growth Disorders - Indications
Novo Nordisk has five approved indications for Norditropin® in various markets. The Achon-droplasia indication is approved for the important Japanese market only.
We also have some interesting projects in the R&D pipeline.
We have a liquid version of our Norditropin® in clinical trials for Japan and Europe and expect to file for approval this year. Combined with our injection devices, we will establish a new convenience standard for patients using our growth hormone.
Further down the line, we have NNC 26-0703, an oral growth hormone releasing substance, which is currently in Phase 1.
We continue to be optimistic about the future growth hormone market, even though the overall market growth is expected to be in the range of 0-5%. New indications and the launch of new products such as Liquid Norditropin will strengthen our global position and we still anticipate to be able to outperform the expected overall market growth.
Slide 22 - Other Health Care 1997
Within Other Health Care we saw a strong sales performance for NovoSeven® in 1997. NovoSeven® contributed with DKK 369 million on the sales line in 1997. In respect to US approval we still hope for an FDA approval in the first half of 1998.
We are pursuing a number of new indications for NovoSeven®. A Phase 2 clinical development programme designed to establish efficacy in patients suffering from bleeding episodes as a result of liver disease, is underway. This programme is intended to provide a platform from which a host of liver related bleeding complications can be treated. The annual market value of this market indication is estimated at approximately USD 600 million. Other indications with similar market potentials are under development.
In late 1997, we decided to out-license the anti-epileptic drug Gabitril® to Sanofi who received worldwide rights except for the Americas and Japan. Further, we licensed Gabitril® for marketing in Latin America to Abbott, who already held the rights for the US, Canada and Mexico. We believe that Gabitril® will create more value for Novo Nordisk and the company's shareholders in the hands of these two companies, both having strong franchises in epilepsy care.
In the Nordic countries, sales of our anti-depressant Seroxat® were under pressure from parallel imports and intensified competition. This means that the previous years' extraordinary growth rates were not repeated in 1997, where actually we saw a decline in our sales compared to 1996.
Slide 23 - Novo Nordisk Health Care is Poised to Create Value
I will conclude my presentation by saying that I hope you are, as I am, excited about the prospects for our business.
NovoNorm®/PrandinTM, our first OHA for the Type 2 market will be launched soon.
We have signed up with a strong partner within diabetes care in the US market, which will give us the leverage needed in the primary care segment.
We have a product with significant potential, levormeloxifene, in Phase 3 clinical trials.
We have a number of exciting compounds in development as well as in late discovery.
With these words I will give the word to Steen Riisgaard, Corporate Executive Vice President for Enzyme Business.
