Final Results

 | Source: Novo Nordisk A/S Novo Nordisk A/S

Novo Nordisk increased net profit by 32% in 2007
Underlying operating profit increased by close to 25% primarily driven by a 13% sales growth in local currencies
 
  •          Sales in local currencies increased by 13% in 2007 and by 8% in Danish kroner.
    • o        Sales of modern insulins increased by 35% (29% in Danish kroner).
    o        Sales of NovoSeven® increased by 10% (4% in Danish kroner).
    o        Sales of Norditropin® increased by 11% (6% in Danish kroner).
    o        Sales in North America increased by 22% (12% in Danish kroner).
    o        Sales in International Operations increased by 18% (12% in Danish kroner).
     
  •          Gross margin increased to 76.6% in 2007, up from 75.3% in 2006, primarily reflecting continued productivity improvements.
    •  
  •          Reported operating profit of DKK 8,942 million (2% lower than in 2006) was impacted by the non-recurring costs of DKK 1.3 billion related to the discontinuation of the inhaled insulin project AERx®. Adjusted for these non-recurring costs and the impact from currencies, underlying operating profit increased by close to 25%.
    •  
  •          Net profit increased by 32% to DKK 8,522 million. Adjusted for both the non-recurring income from the divestment of Dako's business activities and the non-recurring costs related to the discontinuation of AERx®, net profit increased by 25%. Earnings per share (diluted) increased by 34% to DKK 13.39.
    •  
  •          At the Annual General Meeting on 12 March 2008, the Board of Directors will propose a 29% increase in dividend to DKK 4.50 per share of DKK 1. The ongoing share repurchase programme has been increased to DKK 16.5 billion and is now expected to be finalised before the end of 2009.
    •  
  •          For 2008, reported operating profit is expected to grow by at least 25%. Adjusted for currency impact and the non-recurring costs related to the discontinuation of AERx®, the expectation for underlying operating profit growth is at least 20%.
    •  
    Lars Rebien Sørensen, president and CEO, said: "We are very pleased with the 2007 results. They are driven by robust sales growth in all major markets of our portfolio of modern insulins and strong gross margin improvement. This makes us confident that we will also be able to deliver solid underlying growth in 2008."
     

    Contents


     
    Consolidated financial statement 2007
    These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies used in this report are in all materiality consistent with those used in the Annual Report 2006.


    1) Excluding costs related to the discontinuation of AERx®.

    Consolidated financial statement 2007- continued
    These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies used in this report are in all materiality consistent with those used in the Annual Report 2006.


    1) Excluding costs related to the discontinuation of AERx®.
    2) Proposed dividend for the financial year 2007.
    3) Total dividends for the year as a percentage of net profit.
    4) Total dividends for the year as a percentage of net profit adjusted for impact of Dako and AERx® discontinuation.  
    Long-term financial targets



    1) Excluding costs related to the discontinuation of AERx®.
    2) Long-term target ratio measured as three years' average.
    3) Earnings adjusted for net profit impact of AERx® discontinuation.
     
    Sales development by segments
    Sales increased by 13% measured in local currencies and by 8% in Danish kroner. While growth was realised within both diabetes care and biopharmaceuticals, the primary growth contribution originated from modern insulins. The reported sales growth realised in 2007 was in line with the previously communicated guidance of '6-9%' reported sales growth.
     


     
    Sales development by regions
    In 2007, sales growth was realised in all regions measured in local currencies. The main contributors to growth were North America and International Operations providing 53% and 23%, respectively, of the total sales growth. Europe contributed 21% and Japan & Oceania 3% of the sales growth in 2007 measured in local currencies.
     
    Diabetes care
    Sales of diabetes care products increased by 14% measured in local currencies and by 9% in Danish kroner to DKK 30,478 million compared to last year.
     
    Modern insulins, human insulins and insulin-related products
    Sales of modern insulins, human insulins and insulin-related products increased by 14% measured in local currencies and by 9% in Danish kroner to DKK 28,329 million. All regions contributed to growth measured in local currencies, with North America and International Operations having the highest growth rates. Novo Nordisk continues to be the global leader with 53% of the total insulin market and 43% of the modern insulin market, both measured by volume.
     
    Sales of modern insulins increased by 35% in local currencies in 2007 and by 29% in Danish kroner to DKK 14,008 million. All regions realised solid growth rates, with North America and Europe as the primary contributors to growth. Sales of modern insulins contributed 76% of the overall growth in local currencies and now constitute 53% of Novo Nordisk's sales of insulins.
     
    North America
    Sales in North America increased by 26% in local currencies in 2007 and by 16% in Danish kroner, reflecting a solid penetration of the modern insulins Levemir®, NovoLog® and NovoLog® Mix 70/30. Novo Nordisk continues to consolidate its leadership position in the US insulin market with 42% of the total insulin market and 30% of the modern insulin market, both measured by volume. Currently, more than 35% of Novo Nordisk's modern insulin volume is being sold in FlexPen®.
     
    Europe
    Sales in Europe increased by 7% in local currencies and 7% measured in Danish kroner, reflecting continued progress for the portfolio of modern insulins. Novo Nordisk holds 57% of the total insulin market and 50% of the modern insulin market, both measured by volume, and is capturing the main share of growth in the modern insulin market.   
     
    International Operations
    Sales within International Operations increased by 20% in local currencies and by 14% in Danish kroner. The main contributor to growth in 2007 was sales of modern insulins, primarily in Turkey and China. Furthermore, sales of human insulins continue to add to overall growth in the region, driven by China. The key contributor to growth in International Operations continues to be China, accounting for around 50% of the region's sales growth in 2007.
     
    Japan & Oceania
    Sales in Japan & Oceania increased by 4% in local currencies and decreased by 4% measured in Danish kroner. The sales development reflects sales growth for the modern insulins NovoRapid® and NovoRapid Mix® 30. In December 2007, Novo Nordisk launched Levemir® in Japan and is now also in Japan the only company with a full portfolio of modern insulins. Modern insulins are increasingly being sold in the leading prefilled delivery device, FlexPen®. Novo Nordisk holds 73% of the total insulin market in Japan and 63% of the modern insulin market, both measured by volume. 
     
    Oral antidiabetic products (NovoNorm®/Prandin®)
    Sales of oral antidiabetic products increased by 14% in local currencies and by 8% in Danish kroner to DKK 2,149 million compared to 2006. This primarily reflects increased sales in International Operations and North America, mainly due to an increased market share in China and a higher average sales price in the US market.      
     
    Biopharmaceuticals
    Sales of biopharmaceutical products increased by 10% measured in local currencies and by 4% measured in Danish kroner to DKK 11,353 million compared to last year.
     
    NovoSeven®
    Sales of NovoSeven® increased by 10% in local currencies and by 4% in Danish kroner to DKK 5,865 million compared to last year. Sales growth for NovoSeven® was primarily realised in North America. The sales growth for NovoSeven® during 2007 primarily reflected increased sales within the congenital bleeding disorder segments, where Novo Nordisk is the global leader. Treatment of spontaneous bleeds for congenital inhibitor patients remains the largest area of use.
     
    Growth hormone therapy (Norditropin®)
    Sales of Norditropin® (ie growth hormone in a liquid, ready-to-use formulation) increased by 11% measured in local currencies and by 6% measured in Danish kroner to DKK 3,511 million. All regions, and especially North America and Europe, contributed to growth measured in local currencies. Novo Nordisk continues to gain market share in the growth hormone market and is the second-largest company in this market with 23% market share measured in volume.
     
    Other products
    Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy (HRT)-related products, increased by 8% in local currencies and by 2% in Danish kroner to DKK 1,977 million. This development primarily reflects continued sales progress in the US market for Vagifem®, Novo Nordisk's topical oestrogen product. Novo Nordisk continues to be the second-largest participant within the global HRT market.
     
    Costs, licence fees and other operating income
    The cost of goods sold was DKK 9,793 million in 2007 representing a gross margin of 76.6% compared to 75.3% in 2006. This improvement reflects improved production efficiency, a lower level of write-downs and impairment in 2007 compared to 2006 and higher average prices in the US. The gross margin was negatively impacted by around 0.8 percentage points due to currency developments, primarily the lower value of US dollars and Japanese yen versus Danish kroner compared to last year. 
     
    Total non-production-related costs increased by 15% to DKK 23,417 million. The increase primarily reflects costs related to research and development as well as sales and distribution. Research and development costs increased more than sales, primarily reflecting the non-recurring costs related to the discontinuation of AERx® of DKK 1,325 million, of which DKK 870 million relates to write-down and impairment of tangible and intangible assets, DKK 326 million relates to the discontinuation of clinical trials and, finally, DKK 129 million relates to other exit costs such as leasing and investment commitments. Sales and distribution costs increased slightly more than sales, primarily reflecting the increase in the US diabetes care sales force.
     
    In 2007, Novo Nordisk expensed costs in relation to share-based long-term incentive programmes for senior management and other senior employees (around 525 participants in total) amounting to DKK 130 million. The comparable expense for 2006 was DKK 113 million (around 425 participants in total).
     
    Licence fees and other operating income were DKK 321 million in 2007, positively impacted by an income in the first quarter of 2007 related to the out-licensing of an oral antidiabetic compound.
     
    As a consequence of the non-recurring costs related to the discontinuation of AERx®, operating profit in 2007 decreased by 2% to DKK 8,942 million compared to 2006 and is thereby significantly below the previously communicated expectations of growth in operating profit of 'close to 10% as reported'. Adjusted for the non-recurring costs related to the discontinuation of AERx®, operating profit growth was 13%.
     
    Net financials and tax
    Net financials showed a net income of DKK 2,029 million in 2007 compared to a net income of DKK 45 million in 2006.
     
    Included in net financials is the result from associated companies with an income of DKK 1,233 million, primarily related to the non-recurring tax-exempt income of approximately DKK 1.5 billion from Novo Nordisk's divestment of the ownership of Dako's business activities as well as Novo Nordisk's share of losses in ZymoGenetics, Inc of approximately DKK 0.3 billion. In 2006, the result from associated companies was an expense of DKK 260 million.
     
    The foreign exchange result was an income of DKK 910 million compared to an income of DKK 141 million in 2006. This development reflects gains on foreign exchange hedging activities due to the lower value of especially US dollars and Japanese yen versus Danish kroner in 2007 compared to the exchange rate level prevailing in 2006. Foreign exchange hedging gains of DKK 691 million have been deferred for future income recognition, primarily in 2008.
     
    The realised results for net financials in 2007 were slightly higher than the previously communicated expectation of a total net financial income of around 'DKK 1,950 million'.
     
    The effective tax rate for 2007 was 22.3%, a decrease from 29.6% in 2006. The significantly lower effective tax rate for 2007 primarily reflects a non-recurring reduction of around 3 percentage points from Novo Nordisk's divestment of the ownership of Dako's business activities as well as a non-recurring effect of close to 2 percentage points from the re-evaluation of the company's deferred tax liabilities as a consequence of the reduction in the Danish corporation tax rate to 25%, introduced in 2007. 
     
    The realised effective tax rate for 2007 was in line with the previously communicated expectation of a tax rate of 'around 22%' for the full year of 2007.
     
    Capital expenditure and free cash flow
    Net capital expenditure for property, plant and equipment for 2007 was realised at DKK 2.3 billion compared to DKK 2.8 billion for 2006. The main investment projects in 2007 were capacity for AERx® insulin strip manufacturing, expansion of FlexPen® assembly capacity as well as expansion of the purification and filling capacity for insulin products. The realised capital expenditure was slightly lower than the previously communicated expectation of 'around DKK 2.5 billion'.
     
    Free cash flow for 2007 was realised at DKK 9.0 billion compared to DKK 4.7 billion for 2006. Novo Nordisk's financial resources at the end of 2007 were DKK 13.6 billion and higher than the level at the end of 2006. Included in the financial resources are unutilised committed credit facilities of approximately DKK 7.5 billion. The realised cash flow was significantly above the previously communicated expectation of 'around DKK 7.5 billion' and is reflecting a stronger operating performance, improvements in working capital requirements as well as a lower level of investments in the fourth quarter of 2007.

    Outlook 2008
    Novo Nordisk expects slightly more than 10% growth in sales measured in local currencies for 2008. This is based on expectations of continued market penetration for Novo Nordisk's key strategic products within diabetes care and biopharmaceuticals as well as expectations of increased competition during 2008. Given the current level of exchange rates versus Danish kroner, the reported sales growth in 2008 is expected to be around 3.5 percentage points lower than the growth rate measured in local currencies.
     
    For 2008, reported operating profit is expected to increase by at least 25% despite the negative currency environment. The guidance for reported operating profit for 2008 includes an estimate of non-recurring costs of DKK 300 million in relation to the discontinuation of AERx® to cover severance payments and other costs. Adjusting for the impact from currency and the non-recurring costs in 2007 and 2008 related to the discontinuation of AERx®, underlying operating profit is expected to grow by at least 20%.
     
    For 2008, Novo Nordisk expects a net financial income of DKK 450 million, reflecting significant foreign exchange hedging gains, primarily related to the US dollar.
     
    The effective tax rate for 2008 is expected to be approximately 24%.
     
    Capital expenditure is expected to be around DKK 2.5 billion in 2008. Expectations for depreciations, amortisation and impairment losses are around DKK 2.5 billion, and free cash flow is expected to be around DKK 7.5 billion.
     
    All of the above expectations are provided that currency exchange rates, especially the US dollar and related currencies, remain at the current level versus the Danish krone for the rest of 2008. All other things being equal, movements in key invoicing currencies will impact Novo Nordisk's operating profit as illustrated below:





















    Invoicing currency
    Annual impact on Novo Nordisk's operating profit
    of a 5% movement in currency
    USD
    DKK 470 million
    JPY
    DKK 140 million
    GBP
    DKK 85 million
    USD-related
    DKK 100 million
    Note: For 2008 onwards the currency sensitivity for 'USD-related' currencies has been
    focused to solely reflect the impact from CNY and CAD.
     
    Novo Nordisk has hedged expected net cash flows in relation to US dollars, Japanese yen and British pounds for 17, 15 and 10 months, respectively. The financial impact from foreign exchange hedging is included in 'Net financials'.
     
    Research and development update
     
    Diabetes care
    Novo Nordisk has finalised the two planned phase 3 studies in Japan assessing the effect of the once-daily human GLP-1 analogue, liraglutide, for the treatment of type 2 diabetes in monotherapy and in combination with sulfonylurea, a widely used oral antidiabetic treatment.
     
    The 24-week monotherapy study included 411 Japanese subjects with type 2 diabetes previously treated with diet and exercise or a single oral antidiabetic medication. After a four-week wash-out period subjects were randomised to either liraglutide or sulfonylurea (glibenclamide) therapy. From an average baseline HbA1c of close to 9%, Hba1c levels decreased by close to 2 percentage points in the liraglutide-treated group. The change in HbA1c was statistically significantly better than that observed for the glibenclamide group. At the end of the study approximately 50% of patients in the liraglutide group were below the American Diabetes Association (ADA) target of HbA1c < 7%. The improvements in HbA1c levels in liraglutide-treated subjects were obtained through lowering of both fasting and postprandial blood glucose levels. At the beginning of the study, average BMI was close to 25 and average body weight was around 65 kg. A body weight difference of approximately 2 kg in favour of liraglutide treatment was observed when compared to treatment with glibenclamide. Treatment with liraglutide was generally well tolerated. Subjects treated with liraglutide experienced a low rate of hypoglycaemic events, and this was statistically significantly lower than the rate observed in subjects treated with glibenclamide. Nausea was reported in less than 10% of the subjects.
     
    The 24-week sulfonylurea add-on study included 267 Japanese subjects with type 2 diabetes where either placebo or two different doses of liraglutide were added to existing sulfonylurea therapy. From an average baseline HbA1c of around 8.5%, a statistically significant improvement in HbA1c was observed following liraglutide treatment. The average HbA1c at the highest dose tested was reduced to below 7.0%, thereby bringing around 70% of the subjects to a target HbA1c level below 7.0%. From an average starting weight of around 65 kg and an average BMI of around 25 there was no weight change from baseline in the liraglutide-treated subjects, in spite of the improvements in glycaemic control. Similarly, there were no subjects reporting major hypoglycaemic events. Subjects randomised to liraglutide treatment experienced the highest completion rate in the study (around 95%). Overall, reporting of side effects occurred at a low level and the most frequently reported side effects in liraglutide-treated subjects were constipation and diarrhoea (in around 10% of subjects). Nausea was reported in less than 5% of the subjects.
     
    Based on the results from the two Japanese phase 3 studies Novo Nordisk expects to file for regulatory approval in Japan before the end of the third quarter of 2008.
     
    In December 2007, and as previously communicated, Novo Nordisk announced clinical results from the last of five phase 3 studies (the LEAD(TM) 3 study) to be used for the regulatory filing in Europe and the US of the once-daily human GLP-1 analogue liraglutide. Patients in the one-year study were randomised to treatment with one of two doses of liraglutide or 8 mg of glimepiride, a widely used oral antidiabetic medication. At both doses tested, liraglutide provided statistically significantly better glucose control than glimepiride. On average, the patients treated with liraglutide experienced a lowering of HbA1c of more than 1 percentage point. Patients treated with liraglutide who had previously only been treated with diet and exercise saw HbA1c drop by more than 1.5 percentage points. The ADA treatment goal of HbA1c < 7% was reached by more than 50% of the patients receiving the highest dose of liraglutide. As has been seen in previous studies where liraglutide has been given as monotherapy, patients receiving liraglutide in this study experienced a very low level of hypoglycaemia, contrasting with the glimepiride-treated group where hypoglycaemia occurred in a larger number of patients. Furthermore, a statistically significant improvement in systolic blood pressure and a reduction of body weight of between 3 and 4 kg were seen in patients treated with liraglutide when compared to patients treated with glimepiride. Novo Nordisk expects to
    file for regulatory approval of liraglutide for the treatment of type 2 diabetes in Europe and the US before the end of the second quarter of 2008.
     
    In November 2007 and as previously communicated, Novo Nordisk announced clinical results of a phase 2 study comparing liraglutide with orlistat, a lipase inhibitor, for treatment of obesity in people who do not have diabetes. The study demonstrated that liraglutide given once daily over 20 weeks at the highest dose led to a weight loss of just above 7 kg in comparison to a weight loss of just below 3 kg in the placebo group and a weight loss of just above 4 kg in the orlistat-treated group. All doses of liraglutide reduced body weight. More than 75% of the people treated with the highest dose experienced a weight loss larger than 5%, and more than 25% experienced a weight loss larger than 10% relative to their body weight at randomisation. Finally, the study revealed a beneficial effect on systolic blood pressure after treatment with liraglutide. Approximately 30% of the 564 participants in the study showed signs of prediabetes at randomisation. Following 20 weeks of treatment with any dose of liraglutide, between 80% and 90% of these participants no longer showed any sign of prediabetes, as opposed to around 40% in the placebo- and orlistat-treated groups. Liraglutide was generally well tolerated. Novo Nordisk expects to initiate a phase 3 obesity programme with liraglutide before the end of 2008.
     
    For two of the expected next-generation modern insulin candidates, Novo Nordisk has initiated clinical phase 2 studies. The studies involve NN1250, a neutral, soluble, long-acting modern insulin with a flat and predictable profile providing more than 24-hour coverage by once-daily injection, and NN5401, a neutral, soluble, modern insulin fixed combination with improved properties. Novo Nordisk expects to finalise both these phase 2 studies in the first quarter of 2009.
     
    In December 2007, Novo Nordisk submitted NovoMix® 70 for regulatory approval in Japan. NovoMix® 70 is intended to expand the treatment options for the approximately 50% of the Japanese patients who are currently on a premixed treatment regimen.    
     
    Finally, and as communicated on 14 January 2008, Novo Nordisk has decided to refocus its activities within inhaled insulin and to discontinue clinical development of AERx® inhaled insulin (AERx® iDMS). The decision was based on a detailed analysis of the future prospects for inhaled insulin and a review of the medical and commercial potential of the AERx® inhaled insulin system. The decision to discontinue the development of AERx® was not due to safety concerns. Novo Nordisk intends to increase research and development activities targeted at inhalation systems for long-acting analogues of insulin and GLP-1. The activities will take place at two centres of excellence in Hayward, California, and Hillerød, Denmark.
     
    Biopharmaceuticals
    Novo Nordisk has finalised the phase 2 safety study for the use of NovoSeven® in cardiac surgery. A total of 172 cardiac surgery patients were included in the study. Preliminary results from the study confirm the safety profile known from the cardiac surgery setting and from previous studies of NovoSeven® outside of haemophilia with inhibitors. While the primary endpoint of this trial was safety, the trial also demonstrated the biologic haemostatic effect of NovoSeven®. Novo Nordisk expects to communicate next steps for NovoSeven® in cardiac surgery during the first half of 2008, following consultations with regulatory authorities and external experts.
    A subcutaneously administered formulation of rFVIIa has entered phase 1 clinical development. The possibility of administering rFVIIa by means of subcutaneous injection is expected to significantly improve convenience for haemophilia patients with inhibitors.
     
    The heat-stable version of NovoSeven® was submitted in December 2007 for regulatory approval in Japan. Regulatory submissions of the heat-stable version of NovoSeven® in Europe and the US took place in mid-2007.
     
    Driven by a higher aspiration level within the haemophilia portfolio of Novo Nordisk, the company is now actively pursuing the development of new molecules for the treatment of haemophilia with and without inhibitors. The portfolio includes clotting factors targeting different parts of the coagulation pathway and aim at on-demand as well as prophylactic therapy. Among the preclinical projects, the most advanced of these are expected to enter clinical development within the next couple of years.
     
    The R&D strategy for the emerging biopharmaceuticals area has been updated. Based on an evaluation of the general competence level required, the level of investments needed and the likelihood of success, Novo Nordisk has decided to increase and focus activities on inflammatory diseases. As a consequence, research and development activities within oncology will be terminated and resources applied to the growing inflammation portfolio. Existing oncology projects, including the IL-21 programme and the anti-KIR project, are expected to be out-licensed. The ongoing development activities for these two projects will continue while discussions with potential new partners are taking place. The first two compounds targeting inflammatory diseases are expected to enter clinical development in 2008.
     
    As a strategic life-cycle management initiative supporting the growth hormone franchise, Novo Nordisk has initiated a phase 1 study with a longer-acting human growth hormone. Based on Novo Nordisk's PEGylation technology, the compound is designed for once-weekly treatment with expected administration in a convenient injection device.
     
    In December 2007, Novo Nordisk filed Vagifem® low dose (10 micrograms oestradiol) for marketing approval with the FDA.
     
    Equity
    Total equity was DKK 32,182 million at the end of 2007, equal to 67.4% of total assets, compared to 67.4% at the end of 2006. Please refer to appendix 6 for further elaboration of changes in equity during 2007.
     
    Proposed dividend and share repurchase programme
    At the Annual General Meeting on 12 March 2008, the Board of Directors will propose a 29% increase in dividend to DKK 4.50 per share of DKK 1, corresponding to a pay-out ratio of 34.9%, when adjusted for the non-recurring costs related to the discontinuation of AERx® and the non-recurring income from the divestment of Dako's business activities, compared to 34.4% for the financial year 2006. No dividend will be paid on the company's holding of treasury B shares. 
     
    During 2007, Novo Nordisk repurchased 15,537,012 B shares at an average price of DKK 311 per share, equal to a cash value of DKK 4.8 billion. During 2006, Novo Nordisk repurchased B shares equal to a cash value of DKK 3 billion. The Board of Directors has approved an increase by DKK 6.5 billion in the ongoing DKK 10 billion share repurchase programme, bringing the total value of the share repurchase programme to DKK 16.5 billion. The programme is now expected to be finalised before the end of 2009 as compared to the previously communicated completion time 'before the end of 2008'.
     
    Novo Nordisk will initiate its share repurchase programme in accordance with the provisions of the European Commission's regulation no 2273/2003 of 22 December 2003 (Safe Harbour Regulation). For that purpose Novo Nordisk has appointed J. P. Morgan Securities Ltd. as lead manager to independently and without influence from Novo Nordisk execute the first part of its share repurchase programme. The purpose of the programme is reduction of the company's share capital. Under the agreement, J. P. Morgan Securities Ltd. will repurchase shares on behalf of Novo Nordisk for an amount of up to DKK 2 billion during the trading period starting today and ending on 6 August 2008. A maximum of 172,967 shares can be bought during one single trading day, equal to 15% of the average daily trading volume of Novo Nordisk B shares on the OMX Nordic Exchange Copenhagen during the month of December 2007, and a maximum of 22,312,788 shares in total can be bought during the trading period. At least once every seven trading days, Novo Nordisk will issue an announcement in respect of the transactions made under the repurchase programme. 
     
    Holding of treasury shares and reduction of share capital
    As per 30 January 2008, Novo Nordisk A/S and its wholly-owned affiliates owned 25,815,130 of its own B shares, corresponding to 4% of the total share capital.
     
    In order to maintain capital structure flexibility, the Board of Directors will at the Annual General Meeting in 2008 also propose a reduction in the B share capital from DKK 539,472,800 to DKK 526,512,800 by cancelling 12,960,000 B shares of DKK 1 from the Company's own holdings of B shares at a nominal value of DKK 12,960,000, equal to 2% of the total share capital. After implementation of the share capital reduction, the Company's share capital will amount to DKK 634,000,000 divided into an A share capital of DKK 107,487,200 and a B share capital of DKK 526,512,800.
     
    Corporate governance
     
    Election of new member of the Board of Directors
    At the Annual General Meeting on 12 March 2008, the Board of Directors will propose that Pamela J Kirby is elected to the Board. Dr Kirby, a British national, is chairman of the Board of Scynexis Inc, US, and is also a board member of Smith & Nephew plc, UK, among other board positions. Dr Kirby has extensive executive experience from the international pharmaceutical and biotech industry and holds a PhD in clinical pharmacology from the University of London, UK.
     
    Remuneration policy
    Novo Nordisk's existing remuneration policy aims to attract, retain and motivate members of the Board of Directors and Executive Management of Novo Nordisk. Remuneration levels are designed to be competitive and to align the interest of the executives with those of the shareholders. In light of recent changes in Danish legislation, Novo Nordisk will present for approval at the Annual General Meeting in 2008 its guidelines for incentive-based remuneration for the Board of Directors and Executive Management of Novo Nordisk.
     
    Long-term share-based incentive programme for senior management
    As from 2004, members of Novo Nordisk's Executive Management (currently five) and the other members of the Senior Management Board (currently 22) have participated in a performance-based incentive programme where a proportion of the calculated shareholder value creation has been allocated to a joint pool for the participants. For members of Executive Management and the other members of the Senior Management Board the joint pool operates with a yearly maximum allocation per participant equal to eight months' fixed base salary plus pension contribution. Once the joint pool has been approved by the Board of Directors the total cash amount is converted into Novo Nordisk A/S B shares at market price. The shares in the joint pool are locked up for a three-year period before they potentially may be transferred to the participants.
     
    For 2004, 252,688 shares were allocated to the joint pool and the market value of the scheme was expensed in 2004. The number of shares in the 2004 joint pool has not been reduced as the financial performance in the subsequent years (2005-2007) reached specified threshold levels. Accordingly, the original number of shares allocated to the joint pool will, according to the principles of the scheme, be transferred to 22 current and former members of senior management immediately after the announcement of the full-year 2007 financial results on 31 January 2008.
     
    For 2007 and based on an assessment of the economic value generated in 2007, as well as the performance of the R&D portfolio and key sustainability projects, the Board of Directors on 30 January 2008 approved the establishment of a joint pool for the financial year of 2007 by allocating a total of 166,445 Novo Nordisk B shares, corresponding to a cash value of DKK 43 million. This allocation amounts to 6.5 months of fixed base salary on average per participant. This amount was expensed in 2007.
     
    As the long-term share-based incentive programme is evaluated by the Board of Directors to have worked successfully in 2007, it is planned to continue in 2008 with an unchanged structure. Novo Nordisk has, however, decided to make this decision subject to the formal approval by the Annual General Meeting in March 2008 of the guidelines for incentive-based remuneration for the Board of Directors and Executive Management of Novo Nordisk.
     
    Long-term share-based incentive programme for vice presidents
    As from 2007, around 500 key employees below top level management also participate in a share-based programme with similar performance criteria as the programme for the members of Executive Management and the other members of the Senior Management Board. The share-based incentive programme for key employees will, as is the case for the programme for Executive Management and the other members of the Senior Management Board, be based on an annual calculation of shareholder value creation compared to the planned performance for the year. The pool will operate with a maximum contribution per participant equal to four months' fixed base salary. The shares in the pool are also locked up for a three-year period before they potentially may be transferred to the participants.
     
    Based on an assessment of the economic value generated in 2007 as well as the performance of the R&D portfolio and key sustainability projects, the Board of Directors on 30 January 2008 approved the establishment of a pool for 2007 by allocating a total of 527,665 Novo Nordisk B shares, corresponding to a cash value of DKK 135 million. This allocation amounts to 3.25 months of fixed base salary on average per participant. This amount will be amortised over four years.
     
    Compliance with Sarbanes-Oxley requirements
    In 2007, Novo Nordisk was, as was also the case in 2006, compliant with the US Sarbanes-Oxley Act section 404 that requires detailed documentation of how financial reporting processes, systems and controls are designed and operating. Management's conclusion and the external auditor's certification of the 2007 compliance are included in the Form 20-F, which Novo Nordisk as a listed company on the New York Stock Exchange is required to prepare. The Form 20-F is expected to be filed mid-February 2008.
     
    Sustainability issues update
     
    Extension of funding to the World Diabetes Foundation
    The World Diabetes Foundation (WDF) is dedicated to supporting the prevention and treatment of diabetes in the developing world through the funding of sustainable projects. At its core lies the promise of equal access to diabetes care. The WDF was established by Novo Nordisk A/S in 2002 through a commitment to donate an amount not exceeding DKK 65 million per year until 2010. The WDF is an independent trust and is governed by a board of six experts in the field of diabetes, access to health and development assistance. Since 2002, the WDF has successfully funded 138 projects in more than 70 developing countries, and it is estimated that these projects will potentially influence the diabetes treatment of 55 million people directly.
     
    The Board of Directors of Novo Nordisk wishes to secure that the WDF is able to continue its activities after expiry in 2010 of the original donation period, and will propose that the Annual General Meeting approves a donation by Novo Nordisk to the WDF of an amount up to a total of DKK 575 million to be granted as individual annual contributions over a period of 10 years as from the financial year 2008 through to the financial year 2017.
     
    Implementation of the UN Resolution on diabetes
    On the first UN-observed World Diabetes Day, 14 November 2007, Novo Nordisk organised events to mark the day across the world. Around 250,000 people in 50 countries took part. The company's global advocacy effort to promote awareness of and action on diabetes is a response to the UN Resolution on diabetes, adopted in December 2006, in recognition of diabetes as a major global health challenge and in respect of the human right to proper care. Novo Nordisk continues to take an active leadership role in its implementation via its National Changing Diabetes® programmes, which offer awareness, education and guidelines on prevention, treatment and care of diabetes.
     
    Changing Diabetes® Barometer
    The Changing Diabetes® Barometer, launched in November 2007, will measure and share the worldwide progress in the fight against diabetes on an annual basis. The Barometer is a tool that will provide healthcare professionals, patient organisations, politicians, institutions and news media with valuable information on how to improve the quality of diabetes care, bring down diabetes-related complications, extend patients' life expectancy and reduce costs. An annual report will include key findings from the Barometer. The first report covers 21 countries and highlights that significant savings, potentially as much as a 20% reduction of lifelong healthcare costs, can be achieved if people with diabetes are diagnosed earlier and before any complications arise.
     
    Legal issues update
     
    US hormone therapy litigation
    As of 30 January 2008, Novo Nordisk Inc., as well as the majority of hormone therapy product manufacturers in the US, is a defendant in product liability lawsuits related to hormone therapy products. These lawsuits currently involve a total of 45 individuals who allege use of a Novo Nordisk hormone therapy product. These products (Activella® and Vagifem®) have been sold and marketed in the US since 2000. Until July 2003, the products were sold and marketed exclusively in the US by Pharmacia & Upjohn Company (now Pfizer Inc.). Further, 27 individuals currently allege, in relation to similar lawsuits against Pfizer Inc., that they also have used a Novo Nordisk hormone therapy product. Novo Nordisk does not have any court trials scheduled for 2008 and does not presently expect to have a trial before late 2008. Novo Nordisk does not expect the pending claims to impact Novo Nordisk's financial outlook.
     
    Additional information on contingent liabilities is available in the financial notes in the Annual Report 2007, which is expected to be available on Novo Nordisk's website on 4 February 2008.
     
    Financial calendar
    4 February 2008       - PDF version of the Annual Report available on novonordisk.com, online Annual Report launched
    15 February 2008      - Printed version of the Annual Report
    12 March 2008               - Annual General Meeting
    13 March 2008               - Shareholders' meeting (in Danish only)
    30 April 2008                  - Financial statement for the first quarter of 2008
    7 August 2008                - Financial statement for the first half of 2008
    30 October 2008             - Financial statement for the first nine months of 2008
    29 January 2009             - Financial statement for 2008
     
    Conference call details
    At 13.00 CET today, corresponding to 7.00 am New York time, a conference call will be held. Investors will be able to listen in via a link on novonordisk.com, which can be found under 'Investors - Download centre'. Presentation material for the conference call will be made available approximately one hour before on the same page.
     
    Forward-looking statement
    Novo Nordisk's reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company's Annual Report 2007 and Form 20-F both expected to be filed with the SEC in February 2008, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements.
     
    Words such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy', 'prospect', 'foresee', 'estimate', 'project', 'anticipate', 'can', 'intend' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to (i) statements of plans, objectives or goals for future operations, including those related to Novo Nordisk's products, product research, product introductions and product approvals as well as cooperations in relation thereto, (ii) statements containing projections of revenues, income (or loss), earnings per share, capital expenditures, dividends, capital structure or other net financials, (iii) statements of future economic performance , future actions and outcome of contingencies such as legal proceedings, and (iv) statements of the assumptions underlying or relating to such statements. In this document, examples of forward-looking statements can be found under the headings 'Outlook 2008', 'Research and development update' and 'Legal issues update'.
     
    These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those in this document, could cause actual results to differ materially from those contained in any forward-looking statements.
     
    Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions including interest rate and currency exchange rate fluctuations, delay or failure of development projects, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk's products, introduction of competing products, reliance on information technology, Novo Nordisk's ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Please also refer to 'business strategy, opportunities and key risks' on pp 8-9 of the Annual Report 2007 expected to be available on our website (novonordisk.com) from 4 February 2008.
     
    Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.
     
    Bagsværd 31 January 2008
    Board of Directors

    Contacts for further information




    Further information on Novo Nordisk is available on the company's internet homepage at the address: novonordisk.com
     
     
    Encl 1: Quarterly numbers in DKK
     

     
     
     
    Encl 2: Quarterly numbers in EUR

     
     
     
    Encl 3: Income Statement
     

     
     
    Encl 4: Balance sheet
     

     
    Encl 5: Cash flow statement
     

     
     
     
    Encl 6: Statement of changes in equity
     

     
    Stock Exchange Announcement no 3 / 2008
     
     
     
     
     
     
     
    GlobeNewswire

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