-
Consolidated sales increased by 22% to DKK 12,016 million. Measured in local currencies, sales increased 12%.
-
Health Care sales up 26%.
- Enzyme Business sales up 8%.
- Operating profit increased by 34% to DKK 2,589 million; excluding Seroxat® licence income and one-off income, the increase was 42%.
- Operating profit for Health Care rose by 36% to DKK 2,271 million (including Seroxat® licence income and one-off income).
- Operating profit for Enzyme Business rose by 25% to DKK 318 million.
- Profit before tax and net profit increased by 44% to DKK 2,564 million and 41% to DKK 1,615 million respectively.
- For the year 2000 the company now expects an increase in operating profit around 25%, assuming that currency exchange rates remain at the current level.
- The demerger of Enzyme Business into a separately listed company, Novozymes A/S, is suggested to be approved at an Extraordinary General Meeting of Novo Nordisk A/S to be held on 13 November 2000.
The results for the first half of 2000 were better than expected. Operating profit was DKK 2,589 million, an increase of 34% over operating profit in the first half of 1999. Excluding Seroxat® licence income in both periods and one-off income in the first half of 2000 from settlement of patent disputes and from outlicensing of HRT products in the US, the increase was 42%.
Profit before tax and net profit for the first half of 2000 were DKK 2,564 million and DKK 1,615 million respectively, 44% and 41% higher than in the same period of 1999.
Operating profit for Health Care and Enzyme Business increased by 36% to 2,271 million and 25% to 318 million respectively over the first half of 1999. Operating profit margin for Health Care was 23.5% compared with 21.8% for the first half of 1999. The Health Care operating margin was 20.0% adjusted for Seroxat® licence income and the one-off income from settlement of patent disputes and the outlicensing of HRT products in the US compared to 17.4% adjusted for Seroxat® licence income in first half of 1999. The Enzyme Business operating margin was 13.4% in the first half of 2000 compared to 11.7% for the corresponding period last year.
Consolidated sales in the first half of 2000 were DKK 12,016 million compared with DKK 9,856 million in the same period last year, an increase of 22%. Enzyme Business sales rose by 8%, while sales were 26% higher in Health Care compared with the first half of last year.
Measured in local currencies, sales increased by 12% compared with the first half of 1999. The average value of Novo Nordisk's invoicing currencies, measured in DKK, was 10% higher in the first half of 2000 than in the same period last year, primarily due to a 26% appreciation of JPY and a 14% appreciation of USD against DKK.
Total licence fees and other operating income, including Seroxat® licence income and one-off income associated with settlement of patent disputes and outlicensing of HRT products in the US, were DKK 466 million in the first half of 2000 compared with DKK 414 million last year.
Total costs, excluding net financials and tax, rose by 19% to DKK 9,893 million partly due to appreciation of USD and JPY.
This currency development and, to a lesser extent, a more favourable product mix caused production costs to increase less than sales, while the increase in sales and distribution costs were higher than the sales increase reflecting increased costs in connection with the introduction of new products like Norditropin® SimpleXx®, NovoSeven®, NovoRapid® and NovoNorm® in new markets. Research and development costs and administrative expenses increased less than sales.
Total depreciation increased by 6% to DKK 756 million.
Year 2000
The results for the first half of 2000 were better than originally expected, primarily because of the development in the rate of exchange of JPY and USD against DKK, but also because of improved product mix and one-off income. The major uncertainties as far as the results for the full year 2000 relate to currency exchange rates, the continued recovery of enzymes sales and to the development of Health Care sales in the US following the decision by Novo Nordisk to market its full range of diabetes care products by itself. Given the development in the first half of 2000, Novo Nordisk now expects operating profit for the full year 2000 at around 25% higher than operating profit in 1999, compared to an expected increase of 15-20% earlier this year.
The results for the first half of 2000 were better than originally expected, primarily because of the development in the rate of exchange of JPY and USD against DKK, but also because of improved product mix and one-off income. The major uncertainties as far as the results for the full year 2000 relate to currency exchange rates, the continued recovery of enzymes sales and to the development of Health Care sales in the US following the decision by Novo Nordisk to market its full range of diabetes care products by itself. Given the development in the first half of 2000, Novo Nordisk now expects operating profit for the full year 2000 at around 25% higher than operating profit in 1999, compared to an expected increase of 15-20% earlier this year.
The effective tax rate for the full year is still expected to be around 37% and capital expenditures are expected at the level of DKK 2.4 billion.
Net financial costs for the year 2000, at the current level of currency exchange rates, is expected to be at the level of DKK 100 million, down from DKK 263 million in 1999.
The process of demerging Enzyme Business from Novo Nordisk A/S is progressing as planned. An extraordinary general meeting will be called for on 13 November, for the shareholders to approve the demerger.
On 14 June, Novo Nordisk's Board of Directors signed the demerger plan, which has been filed and registered with the Danish Commerce and Companies Agency.
The company has obtained a ruling on the demerger from the US tax authorities, stating that the demerger will have no tax consequences for the company nor the holders of Novo Nordisk shares in the US.
A Demerger Document describing the new company structure and the fundamentals of the health care and enzymes businesses, will be available to our shareholders mid-October and a Danish prospectus of the enzyme business will be available at the same time.
It is the intention of Novo Nordisk A/S, at the time of the demerger, to offer to the market a sufficient number of its Novozymes shares in order to create availability of shares for potential investors and to facilitate liquidity of the newly launched share.
Health Care
Health Care had a strong first half with a 36% increase in operating profit. Excluding Seroxat® licence income and one-off income from settlement of patent disputes and from outlicensing of HRT products in the US, the increase was 45% compared to the first half of 1999. Operating profit was positively impacted by the development in especially the JPY and USD compared to DKK, but also by a better product mix.
Health Care had a strong first half with a 36% increase in operating profit. Excluding Seroxat® licence income and one-off income from settlement of patent disputes and from outlicensing of HRT products in the US, the increase was 45% compared to the first half of 1999. Operating profit was positively impacted by the development in especially the JPY and USD compared to DKK, but also by a better product mix.
Health Care sales in the first half of 2000 rose by 26% to DKK 9,669 million from DKK 7,674 million in the first half of 1999. Sales in the US increased substantially more than other markets. In the first half of 2000 US sales increased by 56% to DKK 1,681 million and now represent 17% of the total health care sales.
Price, volume and product mix improvements had a favourable impact on total sales of 16%, while currency had a positive impact of 10%. During the first half of 2000, Novo Nordisk won and delivered several large tender orders for both insulin and growth hormone.
Diabetes Care
Sales of Diabetes Care products rose by 23% to DKK 6,834 million in the first half of 2000. The insulin and pen products grew by 21%, while NovoNorm®/Prandin(TM) sales increased by 59%.
Sales of Diabetes Care products rose by 23% to DKK 6,834 million in the first half of 2000. The insulin and pen products grew by 21%, while NovoNorm®/Prandin(TM) sales increased by 59%.
Sales of insulin products in the US market increased by 21%
in DKK and by 6% measured in local currency. By the end of June, the total number of sales representatives in the US is 500 people.
Sales of NovoNorm®/Prandin(TM) were DKK 513 million compared with DKK 323 million in the first half of 1999. Both US and European sales have increased.
In the second quarter of 2000, the following developments have taken place with respect to the Diabetes Care project development pipeline:
- The dual acting insulin sensitiser project, NN622, has moved into Phase 2.
- NovoRapid® has been approved by the FDA under the name NovoLog(TM).
- NovoMix® (biphasic insulin aspart) has been approved for launch in Europe.
- NovoRapid® has been submitted for approval in Japan.
HRT
Sales of HRT products (HRT - hormone replacement therapy) increased by 8% to DKK 603 million in the first half of 2000.
Sales of HRT products (HRT - hormone replacement therapy) increased by 8% to DKK 603 million in the first half of 2000.
On 16 June it was announced that Novo Nordisk and Pharmacia Corporation will take a licence under American Home Products patent rights thus removing certain potential obstacles to the marketing of Activelle(TM)/Activella(TM). Earlier this year it was announced that Pharmacia Corporation would market Novo Nordisk's portfolio of HRT products in the US market, and subsequently the products were launched in July.
Growth Disorders
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 20% to DKK 952 million in the first half of 2000. The sales growth was favourably affected by the appreciation of the JPY and the continued successful penetration of Norditropin® SimpleXx® (liquid Norditropin®) in a number of European countries.
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 20% to DKK 952 million in the first half of 2000. The sales growth was favourably affected by the appreciation of the JPY and the continued successful penetration of Norditropin® SimpleXx® (liquid Norditropin®) in a number of European countries.
In June Norditropin® SimpleXx® received approval for marketing in the US, where it is expected to be launched later this year.
Norditropin® SimpleXx® was launched in Japan in July.
NovoSeven®
Sales of NovoSeven® increased by 84% to DKK 1,034 million. US sales continue to show strong growth, supported by continued increasing sales in Europe. Launch of NovoSeven® in Japan took place in May following the approval for marketing in March. Sales in Japan are as expected and include inventory build-up in the first half of 2000.
Sales of NovoSeven® increased by 84% to DKK 1,034 million. US sales continue to show strong growth, supported by continued increasing sales in Europe. Launch of NovoSeven® in Japan took place in May following the approval for marketing in March. Sales in Japan are as expected and include inventory build-up in the first half of 2000.
Sales in the second quarter 2000 were impacted by an above normal number of emergency surgery procedures. NovoSeven® is continuing as planned in early Phase 3 clinical trials for prevention and treatment of bleeding episodes in patients with coagulopathy associated with liver disease. Additionally, a number of Phase 2 clinical trials will be initiated, within the next year, to expand the indications of NovoSeven® within areas such as bleedings associated with oral anticoagulation therapy, bone marrow transplantations, bleeding following stroke and trauma.
The project ASIS, inactivated form of NovoSeven®, for prevention of thrombosis and restenosis in patients undergoing PTCA (percutaneous transluminal coronary angioplasty), has been stopped due to an unfavourable dosage requirement.
Enzyme Business
Operating profit for Enzyme Business increased by 25% to DKK 318 million compared with DKK 255 million in the first half of 1999. The growth rate was mainly fuelled by the appreciation of the company's most important currencies compared to DKK. The operating margin increased from 11.7% to 13.4% for the first half of 2000.
Operating profit for Enzyme Business increased by 25% to DKK 318 million compared with DKK 255 million in the first half of 1999. The growth rate was mainly fuelled by the appreciation of the company's most important currencies compared to DKK. The operating margin increased from 11.7% to 13.4% for the first half of 2000.
Sales increased by 8% to DKK 2,367 million from DKK 2,182 million in the same period of 1999. Volume, price and product mix contributed with a 2% increase, while changes in currency exchange rates increased sales by 6%.
Sales of technical enzymes increased by 5%. Sales to the detergent industry are still under pressure, but the earlier announced introduction of Mannaway(TM) to Procter & Gamble is expected to improve sales. Sales of other technical enzymes, including the textile and starch/fuel industries, increased by 15%.
Sales of enzymes to the food industries showed a strong growth of 16%. Specifically the baking and beverage segments showed a good development in sales.
The animal feed enzyme sales continued to perform strongly with a 24% increase.
During first half of year 2000, three new products have been introduced:
- Sweetzyme® IT, an isomerase for the starch industry
- Ronozyme® P, a phytase for the animal feed industry
- Mannaway(TM), a mannanase for the detergent industry.
As announced on 30 June, Roche and Novo Nordisk Enzyme Business have agreed on a worldwide strategic alliance in the area of feed enzymes. The objective of the alliance is to fuel growth by pioneering and driving the development of new significant feed enzyme applications, which will benefit both the health of livestock and the environment. In accordance with the business strategy, a number of similar collaboration agreements with other industry partners are expected in the future.
It is expected that Novo Nordisk's Enzyme Business, to be called Novozymes after the demerger from Novo Nordisk A/S, will be listed on the Copenhagen Stock Exchange before the end of the year.
Net financials
In the first half of 2000, Novo Nordisk had net financial expenses of DKK 25 million compared with DKK 150 million in the first half of 1999.
In the first half of 2000, Novo Nordisk had net financial expenses of DKK 25 million compared with DKK 150 million in the first half of 1999.
Compared with a net foreign exchange loss of DKK 208 million in the first half of 1999, the loss in the first half of 2000 was DKK 65 million. The loss primarily relates to unrealised losses on hedging of Novo Nordisk's currency exposure with respect to JPY and USD. Net interest income was DKK 28 million in the first half of 2000 compared to DKK 45 million last year and net gain on marketable securities, other financial expenses and results of associated companies was DKK 12 million in the first half of 2000 compared with DKK 13 million in the first half of 1999.
Holding of own shares
As of 30 June 2000, Novo Nordisk's holding of its own shares (treasury shares) was 5,870,309 B shares, corresponding to 7.78% of the total number of shares. Of the remaining DKK 3 billion share buy-back programme, around DKK 600 million remains to be repurchased.
As of 30 June 2000, Novo Nordisk's holding of its own shares (treasury shares) was 5,870,309 B shares, corresponding to 7.78% of the total number of shares. Of the remaining DKK 3 billion share buy-back programme, around DKK 600 million remains to be repurchased.
Shareholders' equity
Primarily reflecting net profit for the first half of 2000 and especially reduction of shareholders' equity following the repurchase of own shares, shareholders' equity rose to DKK 18,713 million as of 30 June 2000, corresponding to 60% of total group assets. Shareholders' equity as of 31 December 1999 was DKK 18,535 million.
Primarily reflecting net profit for the first half of 2000 and especially reduction of shareholders' equity following the repurchase of own shares, shareholders' equity rose to DKK 18,713 million as of 30 June 2000, corresponding to 60% of total group assets. Shareholders' equity as of 31 December 1999 was DKK 18,535 million.
ZymoGenetics
The preparation for ZymoGenetics to become a stand-alone company with more investors than Novo Nordisk is progressing; thus George B Rathmann, former CEO of Amgen, and Edward E Penhoet, former CEO of Chiron Corp, have been appointed members of the Board of Directors at ZymoGenetics Inc.
The preparation for ZymoGenetics to become a stand-alone company with more investors than Novo Nordisk is progressing; thus George B Rathmann, former CEO of Amgen, and Edward E Penhoet, former CEO of Chiron Corp, have been appointed members of the Board of Directors at ZymoGenetics Inc.
ZymoGenetics has a strong patent position in the field of bioinformatics derived therapeutic proteins. ZymoGenetics believes that only a small fraction of genes in the human genome codes for "plausible protein therapeutics" and of these it appears that ZymoGenetics were the first to file on approximately 15% of all such patents filed in the period December 1993 to August 1998.
It is not expected that results from ZymoGenetics' existing genomics based project portfolio will reach the market before 2007-2010.
ZymoGenetics' current project portfolio includes preclinical projects in the areas such as immunology and oncology.
Forward-looking statements
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995.
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from expectations, including unexpected developments in the international currency exchange and securities markets, government-mandated or market-driven price decreases for Novo Nordisk's products in the company's major markets and the introduction of competing products within Novo Nordisk's core businesses.
These and other risks and uncertainties are further described in reports filed with the US Securities and Exchange Commission (SEC) by Novo Nordisk and readily available to the public, including the company's Form 20-F, which was filed on 2 May 2000.
In addition to the risk factors described in the company's Form 20-F, the economic situation in Asia, Russia and Latin America could have an adverse impact on unit sales and/or prices, including currency exchange rates, in 2000. The total group sales in Asia (excluding Japan), Russia and Latin America were approximately DKK 2 billion in 1999 corresponding to 10% of total group sales.
Bagsværd, 14 August 2000
The Board of Directors
Novo Nordisk A/S
Novo Nordisk A/S
For further information please contact:
Media:
Outside North America:
Søren Møller Christensen
Phone (direct) : (+45) 4442 1207
Søren Møller Christensen
Phone (direct) : (+45) 4442 1207
In North America:
Brian Zignego
Phone: (+1) 212-867-0123
Brian Zignego
Phone: (+1) 212-867-0123
Investors:
Outside North America:
Michael Steen-Knudsen
Phone (direct): (+45) 4442 6048
Rasmus Holm-Jørgensen
Phone (direct): (+45) 4442 2983
Michael Steen-Knudsen
Phone (direct): (+45) 4442 6048
Rasmus Holm-Jørgensen
Phone (direct): (+45) 4442 2983
Carsten Bøss
Phone: (direct) (+45) 4442 6047
Phone: (direct) (+45) 4442 6047
In North America:
Peter Lundby Hansen
Phone: (direct) (+1) 212-878-9607
Peter Lundby Hansen
Phone: (direct) (+1) 212-878-9607