(Updates share price in fifth paragraph.)
May 1 (Bloomberg) -- Novo Nordisk A/S, the world’s biggest maker of insulin, lowered its 2014 sales forecast, citing increased competition and the loss of a U.S. distributor.
Sales are now expected to rise 7 percent to 10 percent in local currencies, Bagsvaerd, Denmark-based Novo said in a statement today. That compares with an earlier forecast for full-year revenue to increase 8 percent to 11 percent. Novo reiterated its 2014 profit forecast in local currencies.
Revenue from Victoza, a diabetes medicine that mimics a hormone called GLP-1 and stimulates natural insulin production, climbed to 2.92 billion kroner ($543 million) in the first quarter, missing the average analyst estimate of 3.14 billion kroner. Novo needs Victoza, its biggest growth engine, to sustain sales following the U.S. rejection of a new insulin called Tresiba last year.
It was a “tough start to the year,” Peter Verdult and other Citigroup Inc. analysts in London wrote in a note to clients. Results missed estimates because of “the combined impact of stronger currency headwinds, a more challenging rebate environment in the U.S. and increasing competition in many diabetes markets.”
The shares fell 1.9 percent to 238 kroner at the close of Copenhagen trading.
The Food and Drug Administration demanded a new study to assess the heart risk of Tresiba. Recruitment of patients for the study, dubbed DEVOTE, is “ahead of plans,” meaning a shortened timeline for interim analysis of the data and the potential introduction of Tresiba in the U.S., Chief Financial Officer Jesper Brandgaard said today.
“We will be able to hand those data mid-2015 in principle, bringing it forward by about nine months or so,” he told reporters on a conference call today, referring to the interim analysis of the DEVOTE trial data.
The Danish drugmaker also said it now sees “a more modest growth of the GLP-1 segment” while sales will also suffer from generic competition in the U.S.
Novo Nordisk’s first-quarter results were set to mark the weakest quarter “in a long time,” Jesper Langmack, investment chief at Copenhagen-based PFA, said yesterday. His fund owned Novo stock of about 4 billion kroner as of the end of 2013. A single “soft set of results won’t change much for a long-term investor like us, but it may prompt some short-term investors to sell,” he said.
Net income rose to 6.46 billion kroner, from 5.98 billion kroner a year earlier, Novo said. Analysts predicted 6.34 billion kroner, the average of 17 estimates compiled by Bloomberg. The company said today it still expects full-year operating profit growth of about 10 percent in local currencies.
Novo lost a contract last year to provide insulin and Victoza to Express Scripts Holding Co., the largest U.S. processor of prescription drug claims, after redirecting its sales force to boost promotion of Victoza in that market.