NVO Novo Nordisk

Shares in Danish health care giant Novo Nordisk A/S were down 7% in Copenhagen Wednesday after the company cut its long-term profit growth target and said margins would remain flat.

Novo Nordisk, the world's largest insulin maker by volume, said its long-term target for operating profit growth has now been set at 10%, down from 15% previously, but no target for operating margin development has been established, as the operating margin is expected to stay at its current level around 44%.

"It is a strategic priority to continue to invest in future organic sales growth, and as a consequence operating margin improvement is not expected to be a major contributor to operating profit growth," the company said.

According to Alm Brand analyst Michael Friis Jorgensen, the market was spooked by Novo Nordisk's expectations that all of its long-term profit growth will stem from increased sales, without any contribution from margin improvements.

"The market does not believe in that," Mr. Jorgensen said.

The new financial targets illustrate Novo Nordisk's challenge. While demand for medicines to treat diabetes is soaring—the disease affects nearly 400 million people world-wide, according to the International Diabetes Federation— competition is intensifying in its key U.S. and Chinese markets.

For 2016, Novo Nordisk said sales growth and growth in operating profit are both expected to be 5% to 9%, measured in local currencies.

Chief executive Lars Rebien Sø rensen said in a statement that the focus this year will be on the global launch of the company's new insulin Tresiba. Novo Nordisk is counting on the product to take market share from French drugmaker Sanofi´ s insulin Lantus.

Novo Nordisk is pitching its new insulin at a premium to Lantus and its existing product Levemir, based on its longer duration and the ability to inject at any time of day. That means Novo Nordisk could discount Levemir in a diabetes dogfight, while protecting Tresiba.

The company said the rollout of Tresiba continues and that the product has now been launched in 39 countries including Spain and the U.S. with encouraging initial results.

Novo Nordisk Wednesday said net profit for the three months ended Dec. 31 rose to 8.26 billion Danish kroner ($1.21 billion), from DKK6.53 billion in the same period in 2014.

Write to Christina Zander at christina.zander@wsj.com

(END) Dow Jones Newswires

February 03, 2016 05:25 ET (10:25 GMT)

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