By Jens Hansegard
Drug maker Novo Nordisk A/S (NVO) on Thursday raised its
financial guidance for 2015 as it reported a strong rise in profit
and announced that Chief Executive Lars Rebien Sorensen will remain
at the helm until his contract expires in 2019.
The decision to retain Mr. Rebien Sorensen and the announcement
that Chief Operating Officer Kare Schultz is leaving the company
came as a surprise to analysts, who had thought Mr. Schultz was in
a position to become the new chief executive.
"But it's positive to see that CEO Lars Rebien stays in office
to 2019," Jyske Bank said in a note.
The move comes as the board decided to elevate the leaders of
the company's U.S., European and international commercial
activities and its product-supply operations to executive
management to broaden the board's perspective.
The world's biggest insulin maker said it expects its reported
operating profit to grow about 17% in local currencies this year.
At the end of January, the company had said it expected operating
profit to grow about 10% in local currencies.
A raised outlook for 2015 and strong quarterly earnings sent
Novo Nordisk's share price higher immediately after the open, but
it subsequently fell around 2%, in line with the wider market.
Novo Nordisk reported a net profit of 9.88 billion Danish kroner
($1.47 billion) for the three months to the end of March, compared
with DKK6.46 billion kroner in the same quarter last year.
Quarterly revenue rose 24% to DKK25.20 billion from DKK20.34
billion in the year-earlier period, driven by growing sales of
diabetes drugs Levemir and Victoza.
North America, the world's largest diabetes market, was the main
contributor to sales growth. The Danish company is the market
leader in the U.S., but faces intense competition from rivals, such
as Sanofi (SNY) and Eli Lilly & Co. (LLY).
The company's gross margin was 84.6% in the first quarter,
compared with 83.0% in the same period last year. Currency effects
boosted the company's gross margin by 1.6 percentage points,
whereas the underlying gross margin was unchanged.
For 2015, the company expects sales growth in local currencies
of 7% to 9%, supported by a continued robust performance from its
portfolio of insulin and a modest sales contribution from new
launches, such as Saxenda.
The company said it expects these sales drivers to be partly
countered by an impact from increased rebate levels in the U.S.,
intensifying competition within diabetes and biopharmaceuticals as
well as macroeconomic conditions in a number of markets.
Write to Jens Hansegard at jens.hansegard@wsj.com
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