Danish drugmaker Novo Nordisk has posted a 14% increase in operating profit for the first half of 2007 to 5.13 billion kroner ($945.6 million), with sales climbing 9% to 20.38 billion kroner, a very healthy performance given a negative currency impact.
Growth was driven by Novo's diabetes division, where turnover rose 11% to 14.80 billion kroner, with the firm’s stable of insulin analogue products making up 6.53 billion kroner of the total, an increase of 31% on the year before. Among the major products in Novo's biopharmaceuticals business, sales of which climbed 5% to 5.59 billion kroner, its haemophilia treatment NovoSeven (recombinant Factor VIIa) was up 5% to 2.92 billion kroner, while growth hormone product sales, including Norditropin, went up 7% to 1.71 billion kroner, helped by the success of the firm’s new patient-friendly NordiFlex delivery device.
Novo’s net income shot up 81% to 5.36 billion kroner, although this primarily reflected the divestment of its cancer diagnostics business Dako to the private equity fund EQT V in February, which resulted in a tax-exempt income of 1.40 billion kroner. Gross margins increased to 77% up from 75% in the same period last year, primarily reflecting continued productivity improvements.
Chief executive Lars Rebien Sorensen, who said that the firm “continues to perform very well with robust sales growth and a sustained improvement in our gross margin” also noted the high hopes that Novo has for its new diabetes drug liraglutide. Positive late-stage data was presented in the second quarter “which are expected to be supported by results from additional Phase III studies during the following months”.
Analysts were impressed on the whole with the results and Peter Bertram Andersen at Jyske Bank said Novo reported a surprisingly good gross margin, noteing that it upgraded its full-year outlook – operating profit growth is now expected to be around 10% on the previous year, rather than 6%-8%. He added, however, that sales of human growth hormones and NovoSeven were a bit lower than expected.