Novo Nordisk sees slower 2020 growth with US insulin prices pressured

Diabetes drug maker Novo Nordisk said on Wednesday it expects its business to grow at a slower pace in 2020 compared to last year with insulin prices in the United States likely to remain under pressure.

The world’s top maker of diabetes drugs is betting on innovative new treatments to offset pricing pressure from competing insulin products and U.S. lawmakers, who have been critical of rising drug costs.

The company said it expects sales to grow between 3% and 6% and operating profit to rise 1-5% this year, both measured in local currencies. In comparison, last year both sales and operating profit rose by 6%.

“We are very satisfied with the financial performance in 2019,” Chief Executive Officer Lars Fruergaard Jorgensen said on a conference call, adding that the launch of its once-daily oral pill Rybelsus late last year in the U.S. market was “off to a good start.”

Despite the positive launch of both Rybelsus and the once-weekly injectable treatment Ozempic in the United States, which makes up half of the company’s total revenue, sales in that market were largely flat last year as a result of lower insulin prices, it said.

“We see a tough environment in the U.S. insulin market going into 2020,” Chief Financial Officer Karsten Munk Knudsen said on the call, noting that the company is in the middle of a “major transformation” of its U.S. business.

The company said it expected new type 2 diabetes drugs, which imitate an intestinal hormone that stimulates the production of insulin, and obesity drugs to drive growth going forward.

It posted a fourth-quarter operating profit of 11.9 billion Danish crowns ($1.75 billion), compared to an average 12.0 billion crowns expected by analysts.

Sales were 32.4 billion crowns in the quarter versus 31.9 billion forecast by analysts.

“Today’s result is in line with expectations and neither the figures nor guidance deviate from what was expected,” said Nordnet analyst Per Hansen.

Shares were trading 0.5% higher at 0823 GMT compared to a flat Copenhagen market. The stock has gained around one-third in value over the past year and is trading close to its highest since August 2015.