Edited Transcript of NOVO B.CO earnings conference call or presentation 6-May-20 11:00am GMT

Across our global organization, we are working difficult ought tackle the new challenGEs COVID-19 poses. We read prioritized 3 things at particular: ensuring the well-being of our employees; safeguarding the equip of our life-saving medicines ought the patients that need them; and doing our divide ought help college by supporting local authorities with property and expertise.

Across the appraise chain, the COVID-19 pandemic has had an impact above how we progress nearly our business. Within production, nevertheless we read been prepared, given the continGEncy plans established, colleagues at our global manufacturing sites are finding new ways of working ought ensure that our equip of medicines is maintained. because a result, full manufacturing sites thrive ought operate and medicines are cottage available ought patients worldwide.

Within investigation and development, we thrive ought behavior full ongoing clinical trials and perform no desire significant delays though trials entire completion. though trials that are currently recruiting, however, recruitment of new patients has been negatively impacted. Consequently, some trials can exist delayed.

Further, ought help bounds the stress above the health anxiety system, no new clinical trials are currently being initiated.

The majority of Novo Nordisk medicines are used though treating chronic diseases. However, during the epoch of social distance implemented at many markets, fewer new patients are temporarily expected ought commence treatment. This especially impacts launch products and products with a short remain time.

Again, we also read a duty ought backward college because much because possible. We read go ought perform this by, though example, donating free insulin ought pick humanitarian organizations, increasing affordability options though those at the U.S. who read lost their health insurance, also because providing emerGEncy console donations at countries along the world. I sincerely desire that we'll soon win the upper hand above COVID-19. besides at the meantime, I'm haughty ought exist divide of an industry that is working nearly the clock ought discover effective treatments and vaccines. Novo Nordisk will thrive ought backward these efforts at any method we can.

Please progress ought slip 5. at 2019, Novo Nordisk introduced a comprehensive means describing future growth aspirations of the corporation below the headline strategic aspirations 2025. The strategic aspirations involve of 4 components: goal and sustainability; innovation and therapeutic focus; commercial execution; and financials.

Beginning with goal and sustainability. because already mentioned during my introduction, Novo Nordisk has focused above its goal of being respected though adding appraise ought society. We read engaGEd at numerous initiatives supporting patients, employees and college during this challenging time.

Additionally, at the first quarter, we reached our exploration of sourcing 100% renewable force along full product sites.

There are also multiple developments within our innovation and therapeutic concentrate aspiration. though diabetes, Rybelsus was approved at the European association and the United Kingdom though the treatment of organize 2 diabetes. Also, the Ozempic marketing authorization application was submitted at China.

For biopharm, we unfortunately had ought interval the development of concizumab because a originate of 3 nonfatal thrombotic events during -- occurring at the phase III program. A latent continuation of the project is currently being evaluated.

Within other earnest chronic diseases, we read results of the phase II experiment investigating semaglutide at the treatment of NASH. Mads will elaborate above that at a little minutes.

Moving ought commercial execution and financials. sales increased by 13% and with Novo Nordisk seeing its diabetes appraise just piece leadership amplify ought 28.7%, and GLP-1 sales continued ought perform robust at 37% sales growth. Biopharm sales increased by 16%. entire sales increased by 14%, with International Operations growing by 19% and North America operations growing at 9%. while adjusting though the COVID-19-related stocking effect, sales growth was nearly 7%. The stocking impact was distributed almost equally among International Operations and North America operations.

The sales growth is reflected at operating profit, which increased by 12%, totaling DKK 16 billion. Operating employ was positively impacted by productivity improvements within manufacturing and administration.

Please become ought slip 6. ago we conflict sales along the business, you will notice a different reporting structure though the areas at International Operations. due ought the 1st of April 2020, the International Operations unit has been reorganized, resulting at the following new method of reporting: EMEA, covering Europe, center East and Africa; area China, covering Mainland China, Hong Kong and Taiwan; also because interval of world, covering full other countries, besides though the 2 within North America operations.

North America operations was no impacted by the reorganization. It cottage includes the U.S. and Canada.

Again, sales increased by 14%, which was supported by a growth along full areas and along full therapies. while adjusting though the COVID-19-related stocking, the sales growth was 7%. The stocking impacts were seen mainly because a originate of increased patient prescription trends and Wholesaler inventory levels, especially at the U.S. and EMEA.

Underlying growth was solid, especially at International Operations, where full areas and full therapies thrive -- further ought the continued growth.

North America operations increased by 9%, positively impacted by the COVID-19-related surGE at demand, most driven by stocking at patient level also because prescription refill policies where adjusted. Sales growth also reflects the continued operation of the GLP-1, obesity anxiety and biopharm segments. Insulin sales declined by 15%.

Please become ought slip 7. at the quarter, sales growth was driven by full therapy areas. The stocking impact came mainly from insulin and GLP-1 and, ought a lesser extent, from the biopharm and obesity anxiety franchises.

Global insulin sales increased by 2% in spite of a 16% sales decline at the U.S. The U.S. sales decline was driven by lower realized prices because of the unfavorable channel mix, higher rebates, the launch of affordability -- additional affordability programs and chanGEs at coveraGE gap legislation. The decline was offset by a 14% amplify at International Operations, where full insulin categories contributed ought growth.

GLP-1 sales increased by 37%, driven by 55% sales growth at International Operations and 30% sales growth at North America Operations. Underlying growth reflects the continued penetration of Ozempic, along with the launch of Rybelsus.

Novo Nordisk has expanded both its global insulin volume just leadership also because its GLP-1 just leadership. This has resulted at the previously mentioned expansion of Novo Nordisk global diabetes just leadership, now at 28.7%.

Obesity anxiety sales grew by 30%, with both operating units contributing ought growth. Biopharm sales increased by 16%, driven by both Norditropin and hemophilia products.

Please become ought slip 8. at the U.S., the GLP-1 just continues ought bring more than 30% at volume, driven by once-weekly GLP-1 products. With the uptake of Ozempic and the launch of Rybelsus, Novo Nordisk has new-to-brand just piece leadership of almost 58% and is the GLP-1 just head measured above entire monthly prescriptions with nearly 48% just share.

The early uptake of Rybelsus at the U.S. was encouraging previous ought COVID-19. The weekly new-to-brand prescription just piece though Rybelsus is 9% with a entire prescription piece nearly 2%. Additionally, just access is progressing now with more than 50% unrestricted access.

Ozempic continues ought amplify its just piece at the U.S. at condition of new-to-brand prescriptions, Ozempic is entire ought 37%. And at condition of entire prescriptions, our Ozempic just piece is slightly more than 24%.

Furthermore, Victoza continues its declining just piece though both new-to-brand descriptions and entire prescriptions.

Please become ought slip 9. Novo Nordisk is increasing its diabetes just piece at International Operations because indicated by the entire 23% piece of growth versus a just piece of nearly 22%. just piece increases at International Operations is driven by both insulin and GLP-1. at full reporting areas, both franchises' sales are growing.

In International Operations, the diabetes franchise represents almost 80% piece growth with insulin piece growth at 44% and GLP-1 piece of growth at 35%.

Please become ought slip 10. Obesity sales anxiety increased by 30%, driven by -- driven equally by North America Operations and International Operations, reflecting continued uptake at EMEA and interval of world. We are committed ought driving chanGE at obesity anxiety with Saxenda having been launched at 4 ought 6 countries globally and continuing investments at just development activities.

Please become ought slip 11. Biopharm sales grew by 16% at the first quarter, driven by a 17% sales growth at International Operations and by 14% sales growth at North America Operations. Sales were impacted by COVID-19-related stocking and chanGEs at inventories and timing of shipments.

Sales development was driven by growth along both the hemophilia and growth disorder franchises. The 9% hemophilia sales growth was supported by amplify at Ozempic sales also because the continued rollout of the portfolio of innovative products with Refixia and Esperoct.

Norditropin sales increased by 28%, driven by chanGEs at inventory, COVID-19-related stocking also because an additional demand resulting from chanGEs at the competitive scene at selected countries.

With this, at ought Mads though an update above R&D.

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Mads Krogsgaard Thomsen, Novo Nordisk A/S - Executive VP, head Science officer & Member of the ManaGEment Board [3]

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Thank you, Lars. amuse become ought slip 12. above the next join of slides, I will conflict our commitment ought mature the semaglutide atom at 2 additional therapy areas, beginning with the phase II results at NASH and then moving above ought the phase III step program though semaglutide at obesity.

In April, the phase IIb experiment investigating semaglutide at the treatment of nonalcoholic steatohepatitis, also known because NASH, was completed. This was a 72-week blinded biopsy-based experiment comparing the effects of subcutaneous semaglutide administered once daily versus placebo at achieving histologic determination of NASH staGEs F1 ought F3. The experiment enrolled a entire of 329 patients that were randomized ought either 0.1, 0.2 or 0.4 milligram doses of semaglutide or ought placebo.

The headmaster endpoint was the proportion of patients achieving ordinary solution without worsening of fibrosis backward 72 weeks. at experiment completion, there was a statistically significantly higher proportion of patients rally the headmaster endpoint though semaglutide with an impressive 59% achieving ordinary solution at the tall dose versus 17% though the placebo arm. There were also a quantity of secondary endpoints at the trial. And nevertheless there was no a statistically significant difference at the proportion of patients achieving histological improvement at liver fibrosis with no worsening of NASH, there were a quantity of endpoints showing a statistically significant and dose-dependent reduction at the progression of fibrosis because assessed by biopsy histology, biomarker panels also because elastography using FibroScan imaging. Additionally, marked improvements were seen at liver enzyme levels and the utilize of metabolic endpoints with organize 2 diabetes patients reaching Hba1c of nearly 6.0%, accompanied also by double-digit percent weight loss. The tolerability and safety profiles were good, with only 2 patients discontinuing ought GI phase effects at the highest dose. at total, only 4 patients at each of the tall dose and placebo arms, respectively, discontinued because of reverse events. The next steps will now exist discussed with the regulatory aGEncies.

Please become ought slip 13. The semaglutide at obesity phase III step program represents an significant divide of our strategic aspiration ought mature a headmaster portfolio of superior obesity treatment solutions. The obesity program will commence ought explain results soon, starting with step 4. go me progress into a small slice of detail.

STEP 4 is a 68-week safety and efficacy experiment of semaglutide versus placebo at 900 overweight or obese adults. The experiment displays an unusual so-called withdrawal design, implying that backward 20 week running epoch though semaglutide at full patients, they will exist randomized or were randomized ought either remain above semaglutide or switch ought placebo treatment, consequently withdrawing active medicine therapy.

Based above this, the experiment seeks ought examine the weight difference among the 1 arm continuing versus the other arm discontinue semaglutide therapy from randomization at week 20 ought the purpose of experiment at week 68. This will equip meaningful information above the consequences though a patient ought discontinue obesity therapy backward 5 months because compared ought if she or he continued above obesity therapy though more than a year.

STEP 4 will also examine other endpoints, including weight chanGE backward 68 weeks of semaglutide treatment.

STEP 4 will exist followed by readouts from the classic obesity step 1 trial, the diabetes step 2 experiment and the combined intervention step 3 experiment at the upcoming months.

Overall, the step program has enrolled almost 4,500 adults with either overweight and comorbidities or obesity because defined by BMI above 30.

Obesity is a chronic illness that has been shown ought demand long-term manaGEment with both pharmacological and behavioral therapy. It is associated with many earnest health consequences, decreased life expectancy and large societal cost.

Semaglutide is expected ought heal obesity by offering the patient powerful weight loss mediated by well-defined mechanisms at the brain causing decreased appetite and increased sensation of satiety.

Please become ought slip 14. at the first zone of this year, a quantity of R&D milestones were reached. because mentioned by Lars, Ozempic was submitted though marketing authorization at China, Rybelsus received approval at EU and the U.K. and phase II though semaglutide at NASH completed highly successfully.

Additionally, the once-weekly mixture of semaglutide and a story GIP analog initiated phase I. Furthermore, the zone also brought with it phase I initiation of a story insulin hybrid atom that combines basal insulin action with PCSK9 inhibition.

In biopharm, the once-weekly growth hormone somapacitan was submitted though marketing authorization at Japan at adults. The submission was based above information from the pivotal phase III trial, genuine 1, and supported by information from the local Japanese trial, genuine Japan, which enrolled 60 previously treated patients with growth hormone deficiency. They were adults.

We read announced that 2 clinical trials at the concizumab phase III program read been paused because of the incident of nonfatal thrombotic events at 3 patients. A latent reinitiation of the program with modified dosing regimens will now exist discussed with the regulatory aGEncies.

The remains of the year promises a quantity of significant milestones, starting with Rybelsus approval at Japan expectedly this quarter, along with multiple experiment readouts and significant product approvals along the portfolio.

With that, at ought Karsten though an update above the econmic results.

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Karsten Munk Knudsen, Novo Nordisk A/S - Executive VP, CFO & Member of the ManaGEment Board [4]

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Thank you, Mads.

Professional medical service provider in China

Please become ought slip 15. at the first 3 months of 2020, sales increased by 16% at Danish kroner and by 14% at successive exchanGE rates.

The entire border was 84.1% compared ought 83.8% at the first zone of 2019. The amplify at entire border reflects a sure product mix, driven by increased GLP-1 sales, productivity improvements at manufacturing and a sure coin impact of 0.2 percentaGE points. This was partly countered by a negative impact from lower realized prices at the U.S.

Sales and distribution costs increased by 9% at Danish kroner and by 7% at successive exchanGE rates, reflecting increased investments at GLP-1 and obesity, partly countered by lower promotional cost though insulin products at the U.S.

The charge amplify was driven by global promotional activities though Ozempic, global launch efforts ought found and amplify the obesity just also because launch activities though Rybelsus at the U.S. and promotional activities though insulin at places such because China.

Research and development costs increased by 41% at Danish kroner and by 40% at successive exchanGE rates. The charge amplify is impacted by the reversal of write-downs of oral semaglutide prelaunch inventory at the first zone of 2019 and a cheap level of spending at the first zone of 2019.

The underlying R&D charge amplify is driven by a tall activity level within other earnest chronic diseases, namely though the NASH and cardiovascular illness projects.

Administration costs increased by 2% at Danish kroner and by 1% at successive exchanGE rates, reflecting broadly unchanGEd cost along administrative areas.

Operating employ increased by 40% (sic) [14%] at Danish kroner and by 12% at successive exchanGE rates while adjusting though increased sales because of COVID-19-related stocking and the 2019 reversal of oral semaglutide prelaunch inventory, operating employ increased by nearly 4%.

Net econmic items showed a loss of nearly DKK 1.3 billion, which is compared ought a loss of nearly DKK 1 billion at Q1 2019. This development reflects losses above commercial positions, mainly because of declines at emerging just currencies at March 2020.

Diluted pay per piece increased by 16% ought DKK 5.05. free coin flow increased by 15% ought DKK 7.7 billion.

Please become ought slip 16. though 2020, sales growth is cottage expected ought exist among 3% and 6%. The guidance reflects an expectation though a tough operation of the GLP-1-based diabetes anxiety and obesity anxiety products also because sure contributions from the new-GEneration insulin portfolio and key biopharm products. The guidance also cottage reflects intensified competition within diabetes anxiety and biopharm, continued pricing stress within diabetes anxiety also because the expansion of affordability initiatives.

Given the present exchanGE rates versus the Danish kroner, growth reported at Danish kroner is expected ought exist nearly 1 percentaGE point higher than at successive exchanGE rates.

The present COVID-19 pandemic causes supicion ought the expectation regarding patient flow and societal impacts such because the unemployment estimate at the U.S., which is impacting health anxiety insurance coveraGE.

The sales expectation is based above a quantity of assumptions related ought the severity and duration of impacts from COVID-19, including a gradual normalization along GEographies of the patient flow at the third and fourth zone of 2020 also because a gradual reversal during 2020 and 2021 of the increased stock levels experienced at March 2020.

Operating employ growth is cottage expected ought exist 1% ought 5%. The guidance greatly reflects the sales growth outlook, continued concentrate above efficiency and resource allocation and continued investments at present and future growth drivers along the operating units. Growth reported at Danish kroner is expected ought exist nearly 1 percentaGE point higher than at successive exchanGE rates.

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