Novo Nordisk A/S (NOVOB) Earnings Call Transcript & Summary

Hello, and welcome to the Novo Nordisk A/S conference call. [Operator Instructions] Today, I'm pleased to present Karsten Munk Knudsen. Please go ahead with your meeting.

Thank you. Welcome to the Novo Nordisk investor conference call covering the approval of semaglutide 2.4 in the U.S. now known under the brand name of Wegovy. My name is Karsten Munk Knudsen. I'm the CFO of Novo Nordisk. And today, with me, I have EVP of Commercial Strategy & Corporate Affairs, Camilla Sylvest; and EVP of Development, Martin Lange. We will be doing a brief presentation followed by a Q&A, where we will only do 1 question per person since we have a fairly short time period today. So today, we also might run into forward-looking statements. And as you know, by their very nature, these statements are subject to risks and uncertainties, and final outcomes might turn out differently. The starting point for the company is our corporate strategy. And for our corporate strategy, we've set a set of strategic aspirations towards 2025. And as you see, obesity is a key pillar in our strategic aspirations, both in terms of our commercial execution and growth as well as in our pipeline. So for our commercial aspirations, we have set an aspiration of more than doubling our obesity leaders -- our obesity sales by 2025 compared to our 2019 baseline. And from a pipeline and innovation perspective, we want to continue to develop leading anti-obesity medications for patients on a global scale. So with that brief instruction, over to you, Martin, on the clinical trial execution and approval of Wegovy.

Yes. Thank you very much, Karsten. So as you can see from this slide, we've been working with some fairly ambitious time lines since the initiation of the development Phase III program. We initiated that in Q2 of 2018. And in short succession, recruited for the 4 pivotal studies that provided the foundation for the regulatory file, finalizing both recruitment and treatment by Q2 of 2020. It's super gratifying to be sitting here approximately 1 year after with the approval in the U.S. and an expected approval with a similarly attractive label in December of this year in Europe. Going to the next slide, looking at the label. Obviously, you probably had some time to familiarize yourself with the Wegovy label. But Wegovy is indicated as an adjunct to reduced caloric diet and increased physical activity for chronic weight management in adults with obesity or overweight. Obesity, as usual, being defined as a BMI of over 30 or -- and overweight being defined as a BMI above 27. For the latter, the label stipulates that at least 1 weight-related comorbidity is required as well. The maintenance dose of Wegovy is going to be 2.4 milligram. We want to call out, obviously, the efficacy stated in the label where we see weight loss of up to 15%, which is sustained over a period of 68 weeks. The 15% is reflecting the treatment policy estimate, which is when the -- when looking at the intent-to-treat population, you previously heard us mention numbers up to 18% of weight loss. This is the trial product estimate where patients are receiving or using the treatment as intended. So basically reflecting the same population, the same studies, but 2 different ways of looking at the numbers. You've also seen -- we have seen 48 -- sorry, 84% of patients losing more than 5% body weight, and 48% losing more than 15% of body weight. It's also possible to look into the label. There's one graph depicting [ STEP 4 ] showing that as many as 40% are losing as much as 20% body weight after 68 weeks of treatment. Label is also reflecting improvement in cardiovascular risk factors, including lipids as well as hemoglobin A1c. And importantly, Wegovy is not associated with the prespecified stopping rule. The most common side effects were gastrointestinal side effects, reflecting a standard GLP-1 activating profile. And importantly also, we've been allowed to depict the CV outcomes data from SUSTAIN 6. This is obviously reflected patients suffering from type 2 diabetes, but also reflecting that semaglutide in that space has been shown with a reduced risk of cardiovascular events. So overall, we are very, very happy with this attractive and strong label, obviously depicting that Wegovy is associated with efficacy that surpasses what has been previously seen in this space but also with a very, very attractive safety profile and potentially in type 2 diabetes [stoppings] also associated with an attractive cardiovascular safety profile. We have, going to the next slide, received a number of comments -- or questions on how sustainable is this. The pivotal development program was 68 weeks. And we are super happy to have recently finalized the STEP 5 program, which is basically investigating 300 subjects with a baseline BMI of 38.5 and being randomized to either Wegovy or placebo. In that space, over a period of 2 years' time, we still see an approximately 17% weight loss, which is sustainable over the full 2-year period, this obviously talking to the very sustainable effect of semaglutide in the space. Still, and I'll remind you what I've just mentioned about the 68 weeks, we still see 40% of patients losing more than 20% of their body weight after the full 2 years. We also have, in this space, demonstrated semaglutide to have a safe and well-tolerated profile. And importantly, the cardiovascular risk markers still show a similar improvement at the same level as we saw after 68 weeks, also after 2 weeks here reflected in lipid profiles as well as C-reactive protein. So overall, a strong and sustainable efficacy profile, which should leave Camilla with some things to talk about.

Thank you, Martin. Yes. So we are basically ready to launch Wegovy in just 3 days from now, and that will be -- make it one of the fastest Novo Nordisk launches after approval ever. The uniqueness of obesity in the U.S. market is characterized by a huge unmet need. And around 100 million people with obesity are living in the U.S., yet only less than 3% are treated with anti-obesity medication. So Wegovy holds the potential to help many more people with obesity that currently do not receive care. The U.S. obesity market has been impacted by COVID-19. And following the lockdowns, there has been impacts to NBRx, as you can see here. However, in the last few months, we have seen a recovery of the anti-obesity market with increased focus on the health consequences of people living with obesity, a debate that has also been sparked during COVID-19. So the launch of Wegovy holds potential to further accelerate the acceptance and use of anti-obesity medication for chronic weight management. We will already over the coming weeks build awareness around Wegovy amongst health care professionals, and we are also working, of course, to making it available to patients in a very short time from now. And if we look at the next slide, then you will see that we are also introducing Wegovy in the U.S. at a pack price similar to Saxenda, and we will start the PBM negotiations to secure commercial coverage for this as we speak. Meanwhile, we are launching a U.S. copay card for patients of USD 25 for patients that have commercial AOM coverage. And based on the unsurpassed efficacy that Martin just showed us, Wegovy will be setting new standards for long-term weight management and is also introduced in a single-dose device with an integrated needle. So in summary, there is a huge untapped potential in obesity, and introduction of Wegovy with transformative efficacy holds significant potential to also expand the AOM market. And with that, back to you, Karsten.

Thank you, Camilla. Thank you, Martin. Now we open up for Q&A, and I remind you that we will be doing 1 question per person. So operator, back to you.

[Operator Instructions] The first question comes from the line of Martin Parkhøi from Danske Bank.

Martin from Danske Bank, and I think it's for Camilla on the stay time. Could you talk a little bit about what you -- what kind of expectations for the stay time you have -- that you expect for Wegovy? And what assumptions you have included for that in your 2025 aspirations for obesity sales? And also with this stay time, just on the copay card, how long does that actually -- how long -- how many -- long time do patients have access to that, given that -- can they leave treatment even before they have it all through the treatment?

Great. Thank you, Martin. I counted 2 questions. But Camilla, over to you on stay time assumptions for Wegovy.

Yes. So what we find very positive about Wegovy is, of course, the data that Martin just showed that shows that over 60 -- in a study of 68 weeks, we see continued weight loss over 60 weeks. And this is, of course, what also gives us hope that people with obesity will be treated longer than the average stay time that we see today. So we, of course, assume that with Wegovy, we'll get increased efficacy, increased weight loss, 2 to 3x of what we see with Saxenda. So when it comes to stay time, we, of course, assume that that gradually over time will also increase. When it comes to the $25 copay card, that will be in place for patients that currently are covered with anti-obesity medication and where the employer has opted in. This is around approximately 40% of patients with Saxenda as it is today. And of course, we will be working on -- why we're offering this copay support, we will be working in the coming months and towards the end of the year, of course, to gradually increase also our access rate with Wegovy. So that's the process we are right in the middle of.

The next question comes from the line of Jo Walton from Credit Suisse.

Just a clarification, Camilla, can you tell us what the stay time is today on Saxenda if you think that this could go up 2 to 3x going forward? And then could you just talk a little bit more about your process of getting employers to opt in? Because if I understand it, with Saxenda, you had 70% access in the commercial channel, but because of the employer opt-in, it was only effectively 20%. So how can you change that? And over what time frame should we expect that to change significantly?

Yes. So...

All right. Please go ahead.

Yes. Sorry, Karsten. So I just want to mention that the stay time today with Saxenda in the U.S. is around 6 months. There are other countries where it's even shorter than that. But in the U.S., we expect it to be around that. So when I mentioned that 2 to 3x, I was referring to the efficacy of Wegovy on weight loss. That is 2 to 3x that of the Saxenda. However, we have, of course, seen in our -- as I just mentioned, in our trials that we see a continued weight loss beyond 60 weeks with Wegovy. So that should be very positive news to patients living with obesity. When it comes to opting in, you're right that the gross, so to say, access is significant -- is somewhat higher than the net access. But the net access with Saxenda where employers have opted in is around 40% and it's probably more around 70% in the commercial segment when it comes to the gross access. But it's really the net access that gives people access to the product without large copayments. So I hope that clarifies.

The next question comes from the line of Carsten Lønborg from SEB.

Yes. Let me take this one here. On Slide 7, where you talk about the fact that less than 3% of the 100 million patients that are obese are actually treated with anti-obesity medication. But wouldn't that number be significantly different if you also looked at patients that are obese and have type 2 diabetes? Because I'm sure a lot of the patients here, up to 106 million, they are also treated with some sort of GLP-1 because they already have type 2 diabetes. So what would that number be if you include anti-obesity medication and type 2 diabetes medication?

Thank you for that question, Martin (sic) [ Carsten ]. And clearly, we -- there is an overlay between type 2 diabetes and obesity. So Camilla -- it's a relative low share of patients who are on a GLP-1 in diabetes already. But can you talk to the overlays of patient groups?

Yes. So there is some overlay of the patient groups. And today, of course, we have around 460 million people living with obesity in general in the world and 650 -- or with diabetes, sorry, and 650 million living with obesity. There is some overlap to these populations, but not a complete overlap. And today, we see around 8% of the people treated with diabetes that are being treated with GLP-1s roughly. And so there is a slightly higher percentage being treated with GLP-1. But there are, of course, an even higher percentage being treated in general for diabetes. So this number, 3%, just reflects that the treatment with anti-obesity medications still is at a very, very low level compared to the 650 million with -- living with obesity. So there is -- whether we include people with diabetes or not, a huge unmet need here for treatment of this chronic disease.

But only type 2 diabetics convert to be -- going now that they can actually convert to [an active case] of obesity as well?

So there are many people living with obesity that are, over time, if they will not be treated and their BMI will not be lower that they are at risk of developing long-term complications like diabetes, cardiovascular disease and so on. So there are a big number of people living with obesity that are not yet diabetic and not yet being treated. And the -- what Wegovy has the potential to do is, of course, to lower their weight loss with up to 17% to 18% and that will significantly reduce the risk of getting diabetes or getting cardiovascular disease.

The next question comes from Sachin Jain from Bank of America.

As for Camilla, just to give us some indicators of how you're going to assess launch success in the next 6 to 12 months. I know you're building this for much longer term, but just any metrics you could give us. So just 2 questions. One, should we think about launch prescription run rate in the next month, a couple of months being above the initial Saxenda launch? And then, secondly, how do you think Wegovy launch impacts your Saxenda sales? Is it fair to think that Wegovy layers on top of a stable Saxenda base?

Yes. Thank you. So you know that we have a strategic aspiration to at least double our obesity sales by 2025, and of course, Wegovy is going to contribute to that. Then our focus is to start new patients on Wegovy rather than switching patients currently benefiting from Saxenda. And based on the superior efficacy, we think that it's reasonable to assume that many new patients will now be started on Wegovy. There is, of course, a risk of some cannibalization and lower initial value per script while we build the access for Wegovy, but we are really in this for the long-term potential that we just talked about. So you should be seeing us focusing on our measures to -- for getting a strong uptake of Wegovy, expanding the market and trying to solve the problem for some of all these patients that we just talked about that today are not being treated but are at very high risk of severe chronic diseases if they will not be able to lower their weight over time.

The next question comes from Mike Novod from Nordea Markets.

Just a question to the long-term aspiration. So maybe this is to Martin because he's quoted in Danish media during the weekend to say that the outlook for the obesity business is clearly going to change with the launch of Wegovy and also that Novo is foreseeing a doubling of obesity revenues within the next 3 years. And your original target was that the 2019 sales should be doubled until 2025. So maybe just some comments to this, whether you're sort of changing your communication or whether it's just sort of media chatter, which has perhaps been tightened a bit by journalists?