Novo Nordisk A/S Q3 FY2025 earnings call

Strategic Focus - Novo Nordisk is sharpening its focus on diabetes and obesity, redirecting resources from non-core areas. The company aims to develop products to help patients with diabetes and obesity live healthier lives, through internal R&D and partnerships/acquisitions. ### R&D Updates - Rybelsus is approved in the U.S. and EU with CV indications. Wegovy is launched in over 45 countries, and oral semaglutide 25-milligram (Wegovy in a pill) is submitted in the EU. ### Transformation Program - A company-wide transformation is underway to simplify operations, with a planned reduction of 9,000 positions globally, expected to drive DKK 8 billion in annual savings by 2026. ### Acquisitions - Submitted a proposal to acquire Metsera to strengthen R&D in diabetes and obesity. Also acquired Akero's efruxifermin and Omeros' zaltenibart for rare disease and diabetes/obesity R&D. ### Commercial Efforts - Expanding telehealth capabilities, partnering with companies like GoodRx and Costco, and focusing on increasing access to their products.

In the first 9 months of 2025, Novo Nordisk delivered 15% sales growth and 10% operating profit growth. GLP-1 diabetes sales increased by 10%, insulin sales by 3%, obesity care sales by 41%, and rare disease sales by 13%. International operations sales grew by 16%, driven by GLP-1 products. GLP-1 diabetes sales in Region China decreased by 4% due to wholesaler inventory movements, but obesity care in Region China grew by 83% to DKK 22.4 billion, with Wegovy sales reaching approximately DKK 20 billion growing at 168%. U.S. GLP-1 diabetes care product sales increased by 10%, and Wegovy sales in the U.S. increased by 25%.

Sales growth is expected to be 8%-11% at constant exchange rates, and operating profit 4%-7% at constant exchange rates. The narrowing of the guidance range is due to lower GLP-1 growth in diabetes and obesity, restructuring costs, and impacts from acquisitions. Free cash flow is expected to be DKK 20 million to DKK 30 billion. Capital expenditure is expected to be around DKK 60 billion. The company also noted potential negative impacts from compound patent expiries and Medicare/IRA regulations.

Competition - Intensifying competition in diabetes and obesity markets globally. ### Compounding - Continued increase in compounded GLP-1s in the U.S., affecting market share. ### Regulatory - Risks related to acquisitions and approvals, and potential impacts of Medicare and IRA regulations on pricing and access.

Q: Concern about losing market share in the GLP-1 market, what initiatives to turn around?

A: Focus on expanding markets through new products like Wegovy pill, partnerships with companies like Costco, Walmart, and long-term strategic efforts.

Q: What is the capital allocation and dividend policy?

A: Consistent approach to invest in the business, provide attractive returns, pay dividends consistently, use business development and M&A for pipeline additions, and consider share buyback with excess cash.

Q: Thoughts on the Metsera acquisition deal structure?

A: The deal structure is vetted and complies with laws, with confidence in the complementarity of Metsera's assets to Novo Nordisk's pipeline.

Q: View on Medicare access for obesity treatments?

A: Medicare is important, with around 30 million Medicare-age individuals suffering from obesity, but specifics on discounts and coverage are not speculatable at this time.