) reported third quarter 2012 earnings of $1.74 per American
Depository Receipt (ADR), up 24.3% from the year-ago period.
Earnings were boosted by strong revenues in the reported
Revenues, in the third quarter of 2012, increased 20% on a
reported basis and 11% in local currency year over year.
For the first nine months of 2012, Novo Nordisk's earnings
were $4.88 per ADR, up 19.3% from the comparable period last
All growth rates mentioned below are on a year-over-year and
local currency basis.
Nine Months 2012 Numbers
In the first nine months of 2012, total revenues grew 11%
driven by strong sales in North America (up 19%) and
International Operations (up 16%). Sales in China and Europe grew
17% and 2%, respectively.
Geographically, North America was the largest contributor
(64%) to total revenues followed by International Operations
(20%) and China (11%). Healthcare reforms and pricing pressure in
Europe, the US, China and other international markets negatively
impacted revenues by 1.5%.
The Diabetes Care segment recorded growth of 15%. Modern
insulins generated strong revenues (up 14%) driven by NovoRapid
(up 15%), NovoMix (7%) and Levemir (21%). Novo Nordisk's most
important drug, Victoza, is a once-daily human glucagon-like
peptide 1 (GLP-1) analogue approved for improving blood sugar
(glucose) levels in adult type II diabetes patients. The drug
witnessed sales growth of 64% in the first nine months of 2012.
Victoza witnessed growth across all regions. Protein-related
product and oral ant-diabetic products sales were up 2% and 1%,
respectively, while Human insulins were down 2%.
Sales in the Biopharmaceuticals segment increased 1%. Strong
sales of Norditropin (up 8%) contributed to the increase, though
partially offset by weaker NovoSeven sales (down 1%) and other
product sales (down 3%).
Research and development (R&D) costs and sales and
distribution costs increased 9% and 7%, respectively. Novo
Nordisk's efforts to develop its pipeline, primarily liraglutide
and IDegLira, boosted the R&D expenses in the first nine
months of 2012. Higher costs related to marketing in the US and
overseas, along with sales force expansions in selected countries
were primarily responsible for pushing up sales and distribution
Novo Nordisk narrowed its sales growth guidance for 2012 to
10%-12% in local currencies, from the previous guidance of
9%-12%. The guidance is based on the recent performance of Novo
Nordisk's key products. The guidance also includes the impact of
competition and estimated headwinds from health care and pricing
In local currencies, guidance for operating profit growth is
expected in the range of 16- 18% (prior guidance: around
We have an Outperform recommendation on Novo Nordisk. The
stock carries a Zacks #1 Rank (Strong Buy rating) in the short
We are impressed by Victoza's performance since its launch
despite the highly competitive GLP-1 market, which includes
) Bydureon and Byetta.
BRISTOL-MYERS (BMY): Free Stock Analysis
NOVO-NORDISK AS (NVO): Free Stock Analysis
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