Based on a detailed analysis of the future prospects for inhaled
insulin and a review of the medical and commercial potential of the
AERx® iDMS inhaled insulin system (AERx®), Novo Nordisk has decided
to refocus its inhaled insulin activities and discontinue all further
development of AERx®. The decision to discontinue the development of
AERx® is not due to safety concerns. The decision impacts the
company's 2007 operating profit with a non-recurring cost of around
DKK 1.3 billion."The AERx® system has been developed for delivering fast-acting
insulin in connection with meals, and we have concluded that
fast-acting inhaled insulin in the form it is known today is unlikely
to offer significant clinical or convenience benefits over injections
of modern insulin with pen devices such as Novo Nordisk's FlexPen®,"
says Lars Rebien Sørensen, president & CEO of Novo Nordisk. He
continues: "In general, people with type 2 diabetes start insulin
therapy with long-acting or premixed insulin, and experience shows
that they want very simple, very convenient devices for administering
their insulin. This requires a completely new approach to inhalation
of insulin."
Against this background, Novo Nordisk will increase research and
development activities targeted at inhalation systems for long-acting
formulations of insulin and GLP-1. The activities will take place at
two centres of excellence in Hayward, California, and Hillerød,
Denmark.
The people with diabetes who are currently participating in phase 3
clinical trials with AERx® will be switched to the treatment
alternative recommended by their doctors. Subject to local
regulations, Novo Nordisk will fund medication and medical
supervision for the planned duration of the trials."We regret the inconvenience caused by the termination of the trials
and will do our utmost to support doctors and medical staff in
ensuring as smooth a transition as possible for the affected
patients," says Lars Rebien Sørensen.
Activities related to clinical development and manufacturing of AERx®
devices and insulin strips will be discontinued. As a consequence of
this decision, a significant number of employees at Novo Nordisk's
site in Hayward, California, are expected to become redundant.
Financial implications
For 2007, a non-recurring cost of discontinuing all clinical
development and manufacturing activities related to the AERx® system
is expected to amount to around DKK 1.3 billion which will negatively
impact operating profit in 2007. Around DKK 900 million relates to
write-down and impairment of tangible and intangible assets, around
DKK 300 million relates to the discontinuation of clinical trials
and, finally, around DKK 100 million relates to other exit costs such
as leasing and investment commitments. For 2007, the discontinuation
will not impact the reported cash flow.
Novo Nordisk will provide financial results for 2007 and detailed
financial guidance for 2008 in connection with the release of the
full-year 2007 financial results on 31 January 2008.
However, at the current point in time, Novo Nordisk can reconfirm the
sales growth guidance given in connection with the release of the
financial results for the first nine months of 2007 on 31 October
2007. For 2007, sales growth measured in local currencies is now
expected to be realised in the middle of the 11-14% range indicated
as part of the release of the financial results for the first nine
months of 2007. Furthermore, as the discontinuation primarily impacts
R&D costs in 2007, Novo Nordisk now expects the R&D to sales ratio
for 2007 to be slightly more than 20%.
For 2008, the discontinuation of further development of AERx® is
expected to result in an R&D to sales ratio of around 17% including a
non-recurring cost of around DKK 300 million related to severance
payments and other costs.
Conference call
At 10 am CET tomorrow (15 January), corresponding to 4 am EDT, a
conference call for investors will be held. Investors will be able to
listen in via a link on novonordisk.com, which can be found under
'Investors - Download centre'.
AERx® is a registered trademark of Aradigm Corporation or its
affiliates in the United States and other countries. FlexPen® is a
registered trademark of Novo Nordisk A/S.
Novo Nordisk is a healthcare company and a world leader in diabetes
care. The company has the broadest diabetes product portfolio in the
industry, including advanced products within the area of insulin
delivery systems. In addition, Novo Nordisk has a leading position
within areas such as haemostasis management, growth hormone therapy
and hormone replacement therapy. Novo Nordisk manufactures and
markets pharmaceutical products and services that make a significant
difference to patients, the medical profession and society. With
headquarters in Denmark, Novo Nordisk employs approximately 25,800
employees in 79 countries, and markets its products in 179 countries.
Novo Nordisk's B shares are listed on the stock exchanges in
Copenhagen and London. Its ADRs are listed on the New York Stock
Exchange under the symbol 'NVO'. For more information, visit
novonordisk.com.
Further information:
Media: Investors:
Outside North America: Outside North America:
Mike Rulis Mads Veggerby Lausten
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4443 7919
mike@novonordisk.com mlau@novonordisk.com
Hans Rommer
Tel (direct): (+45) 4442 4765
hrmm@novonordisk.com
In North America: In North America:
Lori Moore Christian Qvist Frandsen
Tel (direct): (+1) 609 919 7991 Tel (direct): (+1) 609 919 7937
lrmo@novonordisk.com cqfr@novonordisk.com
Stock Exchange Announcement no 2 / 2008