Danish pharmaceutical company Novo Nordisk A/S (NOVO-B.KO) on Friday reported a 19% surge in second-quarter net profit, propelled by strong sales of its new products treating diabetes and obesity, but it narrowed its revenue growth outlook for 2016 due to a difficult U.S. market.
Net profit for the three months ended June 30 rose to 9.97 billion Danish kroner ($1.49 billion) from DKK8.34 billion in the same period last year. Analysts polled by FactSet had expected net profit of DKK9.91 billion.
Revenue in the second quarter amounted to DKK27.46 billion, compared with DKK27.06 billion in the year-earlier period, slightly below analysts’ expectations of DKK28.26 billion.
Sales of Novo Nordisk’s new-generation insulin Tresiba were up 161% in the first half of 2016, while its modern insulin products, Novo Nordisk’s core business, declined 2%. Sales of Victoza recorded a 13% surge.
Novo Nordisk said sales drivers are expected to be affected adversely in the second half of this year by unfavorable conditions in the U.S. due to a contract loss, the loss of exclusivity for its products with hormone replacement therapy, and intensifying competition.
The company therefore trimmed its range for expected sales growth to 5-7%, measured in local currencies, compared with the 5-9% range it had expected before. It also narrowed expected operating profit growth in local currencies to 5-8%, from 5-9%.
In the U.S., “the market environment is becoming increasingly challenging and contract negotiations for 2017 have reflected an intensifying price competition,” said Novo Nordisk Chief Executive Lars Rebien Sorensen in a statement.
Published: Aug 5, 2016 By Matthias Verbergt