Novo Nordisk half-year profit boosted on cancer unit sale
DK6.8bn (€0.9bn) for the first half of 2007, boosted by the earlier
sale of its cancer diagnostics business.
The divestiture of Dako in February to EQT V, a private equity fund, resulted in an isolated windfall of DK1.40bn. Non-recurring income from the out-licensing of an oral antidiabetic compound was also largely responsible for a 47 per cent jump in licensing fees and other operating income, to DK0.2bn. Sales were otherwise up by a modest 9 per cent to reach DK20.4bn. The firm's staple insulin business was buoyed up by a 33 per cent increase to DK6.5bn in the sale of next-generation insulin analogues, while its other diabetes-related products fared less well, particularly the older-style human insulins, which saw a 4 per cent decline in demand. As a result, the firm now sells more modern insulin than human insulin and this is the part of the business that Novo, the world's largest insulin producer, sees its future in. Indeed, an announcement was just made that it had received "very positive results" from the first Phase III study on liraglutide, a human GLP-1 analogue, which indicated that it is "statistically superior to insulin glargine [Sanofi-Aventis' competitor drug] in terms of blood glucose control and weight loss". Meanwhile, Novo's smaller biopharmaceuticals division was also sluggish, with its products averaging a 5 per cent rise in sales to total DK5.6bn. The company announced as part of its outlook, its plans to boost its biopharmaceuticals segment. The firm said it has filed for regulatory approval in Europe and the US of a heat-stable version of NovoSeven - a bleeding-inhibitor: "A heat-stable product is expected to deliver significant benefits including rapid dosing and ease of access to treatment outside of home or hospital settings". Novo has also recently initiated a two year Phase II study with the short-acting NovoSeven analogue (NN1731). The study is expected to include around 75 haemophilia patients with inhibitors and will evaluate both safety and efficacy of NN1731. Furthermore, the firm has initiated a Phase I study with a long-acting version of NovoSeven. In addition, it has initiated a global Phase III trial for the use of Norditropin for the treatment of adult patients in chronic dialysis (APCD), and the drug has recently received orpham drug approval for the treatment of short stature in children with Noonan syndrome, a genetic condition that causes congenital heart defects and abnormal facial features. Furthermore, Novo has recently finished a Phase III trial of Vagifem (10µg estradiol), a treatment of postmenopausal atrophic vaginitis symptoms, and said it now to plans file for marketing approval in the US later this year. Meanwhile, research and development costs were up by 17 per cent during the first half of 2007, due to "the high number of late stage clinical projects being conducted," the firm said. Although Novo said the cost of goods sold remained largely unchanged and it had made improvements in production efficiency and product mix, as well as raising selling prices in the US, the company said that non-production sales and distribution costs were up, so the total cost of sales rose by 10 per cent. Capital expenditure, however, was reduced by 22 per cent to DK0.95bn and operating profit for the business in the first half of the year rose by 14 per cent, reaching DK5.1bn, and profit margin edged up by 1.1 points to 25.2 per cent.
