Novo Nordisk A/S ($NOVOB)

Good day, and thank you for standing by. Welcome to the Q1 2026 Novo Nordisk Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Novod, Head of Investor Relations. Please go ahead.

Thank you very much, operator. Welcome to this Novo Nordisk Earnings call for the first 3 months of 2026. My name is Michael Novod. I'm the Head of Investor Relations at Novo Nordisk. With me today, I have CEO of Novo Nordisk, Mike Doustdar; EVP, U.S. Operations; Jamey Miller, EVP, International Operations; [indiscernible], EVP, Research and Development and Chief Scientific Officer, Martin Hoslanger; and Chief Financial Officer, Carsten Magnuson. All speakers will be available for the Q&A session. Today's call is being webcasted live, and a recording will be made available at our website. The call is scheduled to last 1 hour. Next slide, please. The presentation is structured as outlined on Slide 2. Please note that all sales and operating profit growth statements will be at CER unless otherwise specified. Next slide, please. As usual, we need to advise you that this call will contain forward-looking statements. These are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For further information on the risk factors, we see the company announcement for the first 3 months of 2026 and the [indiscernible] prepared for this presentation. With that, over to you, Mike, for an update on our strategic milestones in the first quarter of 2026.

Thank you, Michael. Next slide, please. In 2026, Novo Nordisk is focused on driving competitiveness progressing our pipeline and making focused investments towards growth opportunities while delivering returns. To date, Novo Nordisk is serving more than 45 million people living with obesity and diabetes. Of those more than 4 million people are using our obesity treatment, which means we are now treating over 50% more people living with obesity compared to just a year ago. We are excited to continue bringing new VEGOVI options to patients that includes the VGO VI pill in the U.S. and VIGobIHD, also known as high dose or 7.2 milligram, which is now approved in the U.S. U.K., European Union and Brazil. It is no secret that the VGO appeal is off to a record-breaking start in the U.S. Since launching it some 16 weeks ago, we have seen over 1 million people using VeGobIPill. As the global momentum behind the peptide-based therapies accelerates, VGOVIPIL is defining a novel category as the only oral peptide for the treatment of obesity, setting a new benchmark for what patients and physicians can expect. All of this is something we are very proud of, and it highlights our strong innovation and launch capabilities. Within research and development, we continue to advance our pipeline across therapy areas. In the first quarter of 2026, we have had 6 regulatory approvals and more than 10 clinical trials initiations. Martin will dive deeper into all of these exciting accomplishments in a few minutes, along with our expected milestones for the rest of the year. Novo Nordisk is making strategic investments in growth opportunities to drive our competitiveness and progress our pipeline. In the first quarter of 2026, we have invested about DKK 22 billion in research and development and commercial initiatives. On top of that, we returned nearly DKK 38 billion to our shareholders through dividends and share buybacks. Lastly, we have raised our 2026 guidance, which Carsten will get back to later on. Next slide, please. In the first 3 months of 2026, adjusted sales decreased by 4%, driven by lower realized prices, partly offset by GLP-1 volume growth and market expansion. U.S. operations decreased 11% and partially offset by international operations, which grew 6%. Our GLP-1 sales in diabetes decreased by 11%, mainly driven by U.S. operations. Obesity care sales increased 22%, driven by both operating units. International operations grew by 44% and U.S. operations grew by 9%. With that, handing here to you, Jamey.

Thank you, Mike. Next slide, please. Early this year, Novo Nordisk launched the Wegovy pill in the United States. Wegovy Pill delivers weight loss efficacy on par with that of injectable with Wegovy in a once daily, easily administered oral tablet. In addition to the weight loss indication, Wegovy Pill is the only oral GLP-1 product approved for the reduction of major adverse cardiovascular events, specifically a reduction in cardiovascular death, heart attack and stroke. Furthermore, it is supported by semaglutide's long-standing safety and tolerability profile with around 50 million patient years of real-world experience and does not have drug-to-drug interaction restrictions in its label. Since the launch, we have been focused on use users and usage. The use of Wegovy pill continues unabated far outpacing the uptake of any prior GLP-1 drug launch in the United States. First quarter TRxs were $1.3 million in total. And since launch, we have generated more than 2 million TRxs. We estimate this translates into more than 1 million people treated since launch. For the week ending on April 17, and total weekly prescriptions were 207,000. In terms of users, our source of business analysis supports that the Wegovy Pill is bringing new health care providers and new patients to go. In terms of patients, we see close to 80% of Wegovy Pill users or GLP-1 treatment naive patients. We also see patients coming to Wegovy Pill from competitor products with limited cannibalization from injectable with Wegovy. Lastly, in terms of usage, we are tracking titration, refills and stay time. While it is early in terms of usage evaluation, we are encouraged by what we see and early trends are consistent with our expectations. We continue to seek improved pull-through of reimbursed volume. Leveraging strong standard formulary positions in the commercial segment. By the end of the first quarter, all 3 of the largest PBMs added with Wegovy Pill at parity with injection on their standard template formularies. This will have an impact on the balance between reimbursed and self-pay volume over time. As expected, the early volume is largely in the self-pay segment. Next slide, please. Wegovy High dose was launched in the U.S. in April in a single-dose device, giving patients and health care providers the opportunity to experience greater weight loss with the Adobe brand. Based on the step-up trial results, when patients adhered to treatment, the 7.2 milligram dose of semaglutide delivered 20.7% mean weight loss in people with obesity with approximately 1 in 3 people experiencing 25% or greater weight loss. Importantly, despite the higher dose, the rate of discontinuation in the trial due to adverse events is similar to that observed with the 2.4 milligram dose. Wegovy high dose has been launched nationwide across all channels with the 3 largest PBMs having added Wegovy High Dose to their respective standard formularies as a line extension. It is still early days, but we are already seeing users titrate to the 7.2 milligram dose. Next slide, please. Our recent commercial efforts, including the expansion of Wegovy offerings with the Wegovy Pill and Wegovy HD and options for accessing our medicines have driven a notable shift in new-to-brand prescription dynamics in the branded anti-obesity medication space. The Wegovy franchise is now leading on NBRx market share with a share of around 65%. With that, over to you, Emil.

Thank you, Jamey. Please turn to the next slide. In the first 3 months of 2026, Obesti Care sales in international operations grew by 44% to DKK 9.2 billion. This was driven by strong volume growth and market expansion. Partly offset by lower prices, particularly in China, following price reductions after the NRDL listing of a competitor product. Novo Nordisk continues to be volume market leader in international operations with around 55% weekly injectable GLP-1 volume market share. While our market share has been declining over recent quarters, we are starting to see our share growth stabilizing, which indicates that we are gradually seeing the benefit of our efforts to drive competitiveness in the market. As examples, we are expanding our TeleHealth partnerships, and in some of our largest markets, around 20% of the gold sales is coming from TeleHealth channels. We are also differentiating our GLP-1 portfolio with the U.K. approval of the GOI 7.2 milligram in a single-dose device and the launches of Ozempic 2.0 milligram. In addition, Novo Nordisk is expecting to launch [indiscernible] in select markets in the second half of 2026, pending regulatory decision. With that, over to you, Karsten.

Thank you, Emil. Please turn to the next slide. In the first 3 months of 2026, our reported sales increased by 32%, reaching DKK 96.8 billion. However, as part of our 2025 full year results, we did introduce adjusted metrics to exclude certain exceptional and nonrecurring effects, primarily of noncash nature, including the provision reversal of USD 4.2 billion related to the 340B drug pricing program in the U.S. That means our adjusted sales declined by 4%, driven by lower realized prices partly offset by GLP-1 volume growth and market expansion across geographies. The adjusted gross margin decreased to 80.6% compared to 83.5% in 2025. And reflecting lower realized prices, onetime costs as well as a negative currency impact. This was partially offset by positive product mix from increased pro sales. Adjusted operating profit decreased by 6% at CER, reflecting the lower sales and gross profit, combined with continued investments in R&D and commercial activities, including ongoing launches. Through our disciplined cost base approach, we are on track to deliver the DKK 8 billion of savings from the company-wide transformation announced back in the third quarter of which are being reinvested into growth opportunities. At the end of the first quarter, the number of full-time employees was around 68,000, which is a decrease of almost 10,000 employees compared to 12 months ago. Please turn to the next slide. Novo Nordisk is off to a good start. And for 2026, adjusted sales growth is now expected to be between minus 4% and minus 12%. The improvement in outlook is mainly driven by increased expectations for GLP-1 product sales. In International Operations, the outlook is based on current growth trends, including continued volume penetration from TF1 treatments and market expansion, mainly within obesity and negative impacts from the compound patent expiry of semaglutide molecule in certain markets. In U.S. operations, the outlook is based on current prescription trends for the injectable GLP-1 portfolio intensifying competition as well as negative impact from reduced obesity medication coverage in Medicaid. Further lower realized prices linked to investments in market access amplified by the most fared Nations agreements with the U.S. administration is assumed. Uptake related to the Wegovy pill is reflected in the outlook based on a range of assumptions related Tier 2 such as market penetration, potential negative impact on the growth of the injectable obesity medication category as well as channel mix. Adjusted operating profit growth is now expected to be minus 4% to minus 12% at CER, primarily reflecting the updated sales outlook. We continue our targeted investment in growth opportunities within R&D and commercial, partly funded by reinvestment of savings from the company-wide transformation in 2025 and as well as further optimization initiatives and disciplined resource allocation. Our key modeling considerations for 2026 are shown on the slide. That was the outlook for 2026. Now over to you, Martin.

Thank you, Karsten. Please turn to the next slide. The first quarter was eventful with numerous readouts and regulatory milestones with an obesity we recently obtained FDA approval for high-dose semaglutide at 7.2 milligrams in the U.S. We have also initiated the 2 pivotal Phase III trials in the cenogamtide development program, AMACE. In addition, we have initiated Phase III trials to investigate tenagamtide in people with obesity and sleepapnia in people with obesity and knee osteoarthritis, and to investigate how well and again side helps people with obesity in maintaining their weight loss. Within diabetes, we completed the pivotal Phase III trial REIMAGINE-1 for [indiscernible] and people with type 2 diabetes in adequately controlled the diet exercise. In a while, Categories Hammer demonstrated a superior HBA1c reduction of up to 1.8 percentage points and a superior weight loss of up to 13.8% in respectively, at 4 weeks. The detailed results from the REIMAGINE-1, 2 and 3 trials will be presented at the American Diabetes Associated Conference in 2026. Lastly, a weekly received FDA approval as the first and only once-weekly long-acting baseline insulin for people living with type 2 diabetes. We expect to launch a weekly in the FlexTouch device in the U.S. in the second half of 2026. Please go to the next slide. Recently, we announced the top line results from the Phase III VISCO study, which evaluated the potential of [indiscernible] in single cell disease in addition to standard of care. [indiscernible] cell disease is an inherited condition in which red fat cells take on a single shape because of abnormal hemoglobin. This alteration leads to blood vessels, for circulation and episodes of severe pain known as vaso-occlusive crisis or VOC. The following complications can impact any organ and are often accompanied by [indiscernible] and fatigue and may ultimately lead to organ damage and a shortened lifespan. Approximately 8 million individuals worldwide are affected by a single cell disease. Treatment options remain limited and the unmet need a significant underscoring urgent need for improved therapies that address both VOCs and hemoglobin response. [ Itabopivad ] is a novel and once-daily orally available small molecule designed to improve red blood cell health, pyrite kinase R or PKR activation. Itabopivad was tested in the VISCO trial, a randomized double-blinded 52-week efficacy and set trial investigating ativopivad versus placebo in people 12 years or older with single cell disease. The co-primary endpoint was annualized VOC rates reduction and hemoglobin response on top of standard of care. Next slide, please. It's [indiscernible] successfully met most co-primary endpoints in Hibiscus, making it the first of its class to meet both co-primary end points by substantially reducing VOC events and improving hemoglobin response and cell disease. In the trial, Itabopivad demonstrated a superior reduction in the annualized rate of by 27% compared to placebo. In addition, time-to-first VOC event was delayed by around 4 months compared to placebo. In the co-primary endpoint measuring hemoglobin response, it's above demonstrated a superior increase in the proportion of people achieving a hemoglobin response to greater than 1 gram per deciliter at week 24 of 87% compared to 7.2% with placebo. As an exploratory analysis, it's a [indiscernible] also significantly reduced the risk of blood transfusion. In the trial, [indiscernible] appear to be well tolerated with top line safety profile in line with previous Itabopivad. Based on the results from the best, Novo Nordisk plans to submit the first regulatory approval of Itabopivad in the fourth quarter of 2026. Next slide, please. Earlier this year, Novo Nordisk and United Laboratories announced the top line results for UT5, in 2 Chinese Phase III/II trials, 1 in obesity and 1 in diabetes, respectively. UT5 is a long-acting synthetic peptide triple agonist targeting the receptors for GLP-1, GIP and glucagon. In the obesity Phase II trial, the highest mean weight loss observed for people treated with UBT 251 was 19.7% after 24 weeks of treatment. In the Type 2 diabetes trial, the largest mean A1c reduction with UBT 251 was 2.16 percentage points at 24 weeks and the highest mean weight loss observed was 9.8%. In both trials, the safety and solubility profile of UPT 251 appear to be consistent with tri-agonists based therapies. Within obesity, Novo Nordisk has initiated a global Phase Ib/IIa with results expected in -- for [indiscernible] diabetes, Novo Nordisk is paid to start a global Phase II trial with UPT251 in second quarter of 2026. Next slide, please. After a busy quarter, we anticipate an exciting year ahead across all therapy areas. Starting with in obesity, we still expect a decision in the U.S. for CagriSema at the end with a potential launch in 2017 around the same time of the redefined 11 top line results. In addition, we expect to initiate a Phase IIb trial with CagriSema High Dose in the second quarter 2026. Overall, we remain excited about the profile of CagriSema and prospect of launching soon given the strong weight-loss profile as well as the broader cardiometabolic upsell. We also expect to initiate the MAX trial, investigating oral tenagamtid in people living with obesity in the third quarter. And a Phase III trial with cacuilitide high dose in the fourth quarter of 2026. In the U.S., we anticipate the decision regarding [indiscernible] that was resubmitted in Q1. In the EU, we expect the decision on Wegovy Pill and the single-dose device for injectable, we go 7.2 milligram. Within obesity-related comorbidities, we expect Phase III results for efruxifermin in the Symphony real-world trial in people with metabolic dysfunction associated there to hepatitis or mesh with fibrosis stage III. The primary endpoint of the trial is safety and tolerability of efruxifermin. Within diabetes, we have initiated the Phase II trial for our triagonist marketing, GLP-1, GIP and Amylin. We also expect to initiate the Semaglutide Phase III development program ambition in the fourth quarter of '26/within diabetes associated comorbidities, the first readout of citebecumab from the SUS Phase III trial is anticipated in the third quarter of this year. The trial is assessing relative risk reduction on top of standard of care. Sitimegumab has the potential to be first-in-class treatment, targeting systemic inflammation in people living with atherosclerotic cardiovascular disease and chronic kidney disease. 2026 is an exciting year in a disease as well. Besides the Hibiscus results I just mentioned, we are awaiting regulatory decisions in the U.S. and EU later this year. for denezimic previously known as [indiscernible] for people living with hemophilia. With that, over to you, Michael.

Thank you, Martin. Next slide, please. With that, we're now ready for the Q&A. We'll kindly ask all participants to limit her or himself 1 or maximum 2 questions, including some questions. Operator, we're now ready to take the first question.

[Operator Instructions]. We will now take the first question. And your first question today is from the line of Richard Vosser from JPMorgan.

Two questions, please, both on oral Gov. You've seen very strong uptake, but there seems to be a bit of a drop-off in the patients going between the 4 mg and the NMC doses in terms of titration. So just wanted your views on what might be behind that. Is that the jump in price. Is it tolerability or is it weight loss results and how you're thinking that will impact the stay time of the product and the growth going forward? And one, just on supply of oral GOVI as well, you've referenced launches in a couple of international operations markets. How many markets do you think you can sustain and generally how supply going

Thank you, Richard. Two questions. One, starting with Jamey, and then over to Carsten on supply.

Yes. Thank you for the question. Overall, titration is happening as expected and comparable to what we see with injectable Wegovy, so we're pleased with the progress there. Of course, it's early post-launch in the evaluative kind of period of usage. But we also see movement toward the 9- and 25-milligram doses continued uptake on a week-over-week basis.

Thanks, Jamey. And Richard, thanks for the question on supply. The way I'll put it is, while we do not have unlimited supply for the Wegovy pill due to the product design, then despite the fact that we are setting a new record in terms of product uptake in the U.S. market with the Wegovy tablet, we are still able to announce in the first markets ex U.S. already this year. So this speaks really to scaling of supply the inventories we've put in place. And then we play it gradually from here in terms of the pace of international rollout.

Your next question comes from the line of Sachin Jain from Bank of America.

Again, please. So firstly, I guess, cast on SG&A. It's lowest absolute number for a number of quarters, feels a little bit odd into a product launch. So should we think of this as a new commercial model with telehealth and this is a base or anything to think about the cadence of SG&A through the course of the year? The second one is a broad question around price, maybe for Michael or Jamey and [indiscernible] into your comments around no intention to lower prices and oral price at the sweet spot. Just wondering if you could just dig into that a little bit further. Is there no intention to lower a comment to the 150149 lower oral dose holding, and if oral price is a sweet spot, how do we think about price mix across the business shifting to this lower price bracket. And I guess that trend to higher dose oil pricing, reimbursed pricing and you believe diabetes pricing.

Thanks, Sachin. First question is Karsten, and then second goes to Mike.

Yes. Thanks, Sachin, for this question. So on SG&A in the quarter, first and foremost, it's important to note that we have a one-off, which is favorable in the fact that we are adjusting a legal provision which has a benefit of, I would say, a much more than $100 million that favorably impacts the quarter. So one should adjust for that. In terms of continued investment, then I promise you that we have gone pretty much all in, in terms of the Wegovy pill launch and resourcing of that you've seen the Super Bowl ads, et cetera. And then with the model that we're deploying together with the Telehealth partners that yields a different scalability in terms of promotional presence between paid versus earned media. And that has yielded a very high share voice share in the first quarter through the coming quarters, expect us to be disciplined around our spending. We are less employees in the company, which, of course, helps on SG&A. But at the same time, we are truly investing in the growth drivers we have that the launch products coming up and we go with tablets. So in terms of SG&A ratio, we're in the low 20s for the full year.

Thanks, Karsten. Mike?

Good. So, Sachin, I think price is dynamic and element of volume uptick. If you take a look at where we are with our volume uptake, that's why we say we are at the sweet spot. We are seeing a situation where at the current prices. We have had 2 million scripts after 16 weeks, more than 200,000 scripts per week despite competitor having come now more than a week -- more than a month into the game and having more than 1 million patients on our product. So at this point, I would say we have a pricing product perfectly correct. We also have said that, of course, it's dynamic because if you look at this in a longer spectrum, then we foresee a situation where volume upticks continues, of course, to continue. And then that would mean that prices have to come down. If your ambition is to get to hundreds of millions of patients at 1 point or the other. At that point, of course, the prices will be very different. But for now, this is the right price.

Your next question comes from the line of Simon Baker of Rothschild and Co.

Two, if I may, please, really following on from Sachin's questions. Firstly, on the I just wonder in light of the launch and the success of the launch, if you're getting a better handle on this price volume dynamic. And as part of that, what's been your feedback for patients choosing the pill? Is it convenience? Is it efficacy? Or is it cost because it's the cheapest option in the market at the moment. Just some idea on how this price elasticity is evolving? And then second, going back to costs, one for Karsten. Not only with SG&A even after the legal adjustment low in the quarter, R&D was as well. So I just wonder if you could give us an idea on the phasing of R&D through the rest of the year.

Great. First question for Jamey and then the second question for Karsten.

Yes. I think on price elasticity, as Mike said, the volume uptake and receptivity in the market suggests that we found that sweet spot in terms of price leading to record volumes. In terms of oral attractiveness to consumers and patients the key decision criteria still is magnitude of weight loss and will go be pill demonstrated 17% weight loss. In addition, the attractiveness of the limited time offer pricing for the initial starting dose brings people to the product as well.

Thanks, Jamey, and thanks, Simon, for the question on R&D cost. As you heard from margins introductory comments, then we have a lot going in R&D, and it's a strategic priority for the company. to expand our pipeline to drive growth, not only for the medium term, but also for the long term. So the R&D ratio in the quarter yes, is a note on the low side compared to what we expect for the full year. So expect us to lean in on R&D investment in the coming quarters.

Your next question comes from the line of Peter Verdult from BNP Pariba.

Two questions, one for Martin and one maybe for Jamey as well. [indiscernible] push you for some more info on your next-gen GLP-1. Is it fair to assume this will be differentiated on dosing frequency? Or do you still believe there is scope within the GLP-1 can to differentiate on efficacy or safety? And then maybe, Jamey, for you just because you are new to the management team and you bring an outsider's perspective inwards. Could you just give us a flavor of what you found when you arrived in your role at Novo and some of the -- a few of the biggest changes you've made since taking the role on

First question to Martin, and then to Jamey.

Yes. I think you've heard -- thank you for the question, Pete. I think you've heard me talk about before when we talk about differentiation. We look at the efficacy differentiation, tolerability, dosing frequency and maybe scalability. Let's assume that this one has one or more of these potential trades, but we'll not go further into detail, and you'll have to maybe attend CMB to learn more.

Great. Thanks, Martin. And Jamey, what have you learned?

It's a big question, but a short answer. Firstly, just a lot of opportunity. I think the first quarter milestones, whether it's approvals, clinical data readouts have produced a great environment to make a change in the trajectory of the business. Specifically, obviously, Wegovy pills we're discussing, but also Wegovy High Dose the 7.2 milligram strength really allows us to level the playing field from an efficacy standpoint. So a lot of opportunities and levers to leverage I think the second thing, just in a snapshot and Mike talked about it often is the opportunity to integrate our thinking across market access, sales, marketing, medical, regulatory, in a differentiated way.

Your next question comes from the line of Michael Leuchten from Jefferies.

Two questions as well, please. And linked. Ozempic had a pretty strong first quarter. Can you talk to the price erosion in the U.S. you saw in Q1? And how should that -- would that look like once the Medicare bridge program kicks in. Would there be collateral damage for Ozempic in diabetes in the second half? And that links to the second question on guidance. So Karsten, you haven't changed lower end of the range when Q1 came in quite robustly. What's the variables that doesn't allow you to lift at lower end double-digit decline in -- for the rest of the year? Thanks a lot.

Two questions for Karsten.

Thanks, Michael, for those very relevant questions. So first, in terms of Ozempic and Ozempic performance, then I'd say what we've seen here in the first quarter in the U.S. setting, which is what you're alluding to, is very much a continuation of what we saw towards the end of last year and what the same commentary in connection with full year. So both on volume trending. And on pricing, the same, we're looking at these, call it, minus 10% to up to minus 15% price erosion. So really no change there and that's what we're looking into for the full year. So I really don't want to get into the quarters, but same guidance this year as last year and even the year before. on simply U.S. price. As to guidance and where we are now, the important point on guidance and our thinking behind guidance here in Q1 is that now we're 3 months down the road. And we've seen a number of items actually partially playing our way in terms of the oral script trends. We've got the Wegovy high-dose approval in U.S. we have decided to launch the Google tablet ex U.S. in a few select markets. And then we've gotten more info both on competition as well as LOE approvals in IO. So based on that, we are more confident in our outlook and as a consequence, we parallel shifted both the sales and OP ranges by 1 percentage point. So you should see that as increased confidence. And yes, I'm with you that the range is not wide, but you should take it as a signal of confidence that we lifted the range by 1 percentage point.

Your next question comes from the line of Mike Nedelcovych from TD Cowen.

I have two. My first is on ziltivekimab. I'm wondering if you could tell us between Zeus, Hermes, Artemis and Athena, which trial you view as having the largest opportunity. And then my second question is on the Wegovy IP in the U.S. I know that you guide to expiration of the semaglutide composition of matter patent as the loss of exclusivity date but there's almost a decade difference between the drug substance patent and the latest dated patents for Wegovy Pill injection. So my question is, does Novo plan to defend that IP?

One question for Martin and one for Karsten.

Yes. Thank you for that. So from an indication and a potential perspective us permits and Artemis are the only ones that will lead to potential indications, respectively, in ACV, heart failure will preserve ejection fraction and both myocardial and face. From a medical perspective, obviously, we have a high level of confidence in the biology. There is a potential of improving outcomes in all of these 3 categories. we still had to flag the high-risk business first-in-class, and we need to establish not only the efficacy in terms of improved outcomes. But also the safety and salability of NIL 6. So we still see this as very, very high potential across those 3 indications, but also high risk until we've seen the first.

Thanks, Martin. And Karsten?

Yes. On IP, as you know, Michael, this industry works in the way that we take very significant risks early investments in R&D with a fairly low probability of success early on. So those big risks and investments in return, we get the patent protection for a certain period of time. And that's why when we then get into that period, it's very important for us. to defend that patent protection. It's granted by patent authorities in the different geographies. So this is not something that we decide on our own. And when branded, of course, we intend to defend all our patents in port. Should they be challenged by generics.

Your next question comes from the line of James Gordon from Barclays.

James Gordon for Barclays. Two questions. S First question was just on long-term semaglutide and general obesity pricing. So I know you've invested tens of billions in CapEx to brew some very efficiently at scale. But then in India, I think at least 8 generics approved at some very low prices, at least for the [indiscernible]. So it does not let the generic companies chemically synthesized at very low cost. So your latest thinking about manufacturing efficiency, do you still think like long term with Synthesis generics would struggle to match you on price with your [indiscernible]? Or do you think we are going to have an order of magnitude for once the patents go in the west, and that does make it tougher for next-generation obesity therapies? And then the second question was just a follow-up on some of the comments about SG&A, just trying to square it you did a 47% adjusted EBIT margin. It sounds like with the one-off of legal, it's still mid-40s, but the midpoint of the full year guide is more like 40%. Is it because of lots more R&D? Or is it also like you're allowing for doing a lot more sales and marketing for ex U.S. or will go be launched? Otherwise, it seems like if you would get to a higher margin.

Thank you, James. Two questions for Karsten, one on sema and manufacturing mode and pricing and then one on SG&A.

Thanks, James, for those two questions. So first on -- first and foremost, on [indiscernible] manufacturing. Based on our managed process and set up and we believe that we are hypercompetitive in terms of unit cost in producing sim and hypercompetitive in terms of scale also in terms of how much semi we're able to produce and the reach we can do in pretty much at a global scale. What that leads into in pricing in different health care systems and different channels remains to be seen. I think it's important to note that over time, more of this is going to be available in the cash segment with different partners and different go-to-market models. So let's see where pricing pans out. How much pricing can brand recognition and brand loyalty carry compared to generics in this market. And consequently, how much price differentiation and price upgrade there, can we go for next-generation products really remains to be seen. I think India is not a good proxy for other markets, to be honest. Then to your second question on margins. Then I would say -- it's important to note that our point of departure is an already very competitive margin, if you look at it compared to the rest of our peers in the industry. So being at call it, 40% operating margin or 40% plus is already very high. So strategically for us as a company, it's more important for us to invest in future growth more so than short-term margin optimization. So that's why it's important that, of course, we optimize the opportunity. We have short and medium term with the assets in the market or coming to the market soon as well as investing in pipeline. So that's the key driver. So yes, we could drive for higher margin, but that's not our strategy and not the intention. I would, though, say that we are very disciplined and rational, as I also said in the beginning, with our resources and having less almost 10,000 less FTEs today compared to a year ago. So we are really reallocating our resources towards our key growth opportunities. I think that covers the SG&A comments.

Your next question comes from the line of Evan Seigerman from BMO Capital Markets

First question on the impact of the generic semaglutide in Canada. How are you thinking about that as you have contemplated your guidance? Maybe some illustrative kind of concepts around that would be great. And secondarily, on a bigger -- taking a step back, you've had some pretty striking data for sickle cell disease is rare disease. I know it's a pillar of the company, but is this an area where you should be leaning in more to complement what you're doing in obesity and diabetes to kind of give investors that next leg of growth?

Thank you, Evan. One for Emil on Canada and then one for Mike on raises.

As you will know, most of you, we now have, of course, two approved generics in Canada. Slight delay compared to where they could have come in from a regulatory point of view, it took some time to get the approvals. Now they're there. It has not made us change our overall guidance. at the group level that we will see low double -- single digits, sorry, impact at group level. So we don't guide on country level in terms of impact. But I can tell you, we are very ready and the leading tactic in Canada, that is a savings card that has seen a very good uptake, both for Ozempic and Wegovy. So that gives us a lot of venerability as we see how this unfolds. And I think you all know the framework in Canada. After 3 generics, there's a mandated 65% price decline versus our lift. So we know sort of the game there, and we are able to play it, particularly with the savings card. And we have optionality on the second brand as well. So Evan, our strategy is to really ensure that we drive growth, short, medium and long term. And we will do that with the current products and we plan also to do that with our pipeline of our products across all therapy areas. I'm incredibly proud and happy of what I have seen with that comes in a family of a lot of other best-in-class and great rare blood and hematology drugs. So that, of course, is no secret. But all in all, stay tuned. And of course, we'll share with you more and more about our overall strategy. But the main aim is to really make sure we have multiple legs to stand on, so we can drive growth short, medium and long term for you guys.

Your next question comes from the line of James Quigley from Goldman Sachs.

Got two, please. First of all, can you talk to what you're seeing in the early stages of the [indiscernible] launch? What's the latest feedback here from physicians and patients, particularly on how to manage relative food and water interactions, but also in terms of the awareness of the white loss differential between the 2 products? And are there any patterns or trends in terms of the patients that you the patients that are going on each drug? That's number one. And number two, for the AMAZE program, you started a Phase III trial on clinicaltrial.gov. Can you talk to the dosing protocol here in the obesity trial, the primary end point running out to week 24. So taking into account 1 of the key learnings from the Calgary Summer Program, but how flexible is the dosing in the protocol, particularly given the unpredictability we saw in [indiscernible] and also before seeing the results of redefined.

First question for Jamey regarding what we see post Fonde launch. And then the second question to Martin, what he can say about MACE.

Of course, it's early days, but I think what we see so far is an affirmation of the strength of the Wegovy Pill profile. As mentioned before, the #1 decision criteria is efficacy, and we have unsurpassed efficacy with that 17% weight loss with Wegovy Pill. We also introduced very quickly an indirect treatment comparison which is a well-respected health economic population health approach to comparing indirectly studies based on population adjustment in the Phase III trials, and that showed better efficacy with [indiscernible]. Then the competitor as well as a lower likelihood of discontinuation due to adverse events and specifically GI events. So what we've heard in the market is consistent with the strength of our profile.

Thanks, Jamey. Martin?

Yes. Thank you for the question. Obviously, very relevant, we did take a lot of learnings from the redefined program, as you know. They were both around the patient population. The need and wish to lose a substantial amount of weight is obviously a key imperative and we've implemented that starting with REDEFINE 11, but also in the MS program. And then we have a at the flexible dosing so that we -- we run patients more with or we allow investigators to work mobile patients to get them to higher doses while maintaining the flexible nature of trials, we've clearly learned also from REDEFINE that approximately 1/3 of patients do need flexible dosing to achieve the full weight loss potential. And we need to allow that as well while helping guiding the patients. We implement that in REDEFINE 1. Without going into too much detail, we can already now see a substantial impact in redefining level. I haven't seen the weight loss data I had to say, But I'm looking at the titration data and the model seems to work. And we have employed more or less the same algorithm in the MH program. So we're quite confident that will help patients really achieved the full weight loss potential of emicretin or semaglutide.

Your next question comes from the line of Graham Parry from Citigroup.

So on Wegovy pill, can you quantify the total inventory impacts on the GOP sales in the quarter? You like in the release pre-launch inventory builds. Has there been any further inventory increase through the quarter, and do you expect that to run off? Or should we expect further inventory increases in subsequent quarters? And then secondly, a question just on the CagriSema co-formulation, why the decision to terminate? Is that a technical or a commercial decision?

Thank you, Graham. Two questions. First for Karsten regarding the Wegovy inventory and then the second to Martin on CagriSema Formulation.

Yes. Thanks for that question, Graham. So for the Wegovy tablet, we reported around DKK 2.3 billion sales in the first quarter to the tune of $150 million of those were related to what we would call pipeline filling. And the pipeline filling covers both the initial inventory built with the wholesalers and in pharmacies, the customary launch orders, if you will. And the second piece is just also the customary inventory build in connection with the brand getting bigger and in this case, very, very fast. So that happens for all products. It's just a question of the pace of the inventory build. It's like we manage inventories in the company in terms of days on hand of inventories, the same way it works with pharmacies and wholesalers in the U.S. So this is absolutely normal, what we are seeing. And in terms of going forward, then it's also absolutely normal that there will be a certain degree of inventory built in conjunction with the brand continuing to expand, so that what you see in terms of when you see IQVIA scripts, then there will be additional sales especially in the early phases of a product life cycle, which is linked to inventory build across the chain. That happens for all products, and we've seen it for decades.

Yes, thank you for the question. As you know, we've always talked to that we are scaling the dual chamber device of cargoes a full-scale launch. So we are very confident in that we saw the co-formulation as a flexibility upside the way we now think about it is that we have front-loaded and sped up the MAC program and the A2 diabetes program as well as the oral program for senate -- so with full scalability on the dual table device combined with anything and again are coming in more or less the same time or even before as the co-formulation could. It really didn't make sense. It was not a technical thing. You heard me talk about last quarter. We did see full buy availability. So it actually worked there was just no need from a production perspective to progress it.

Your next question comes from the line of [indiscernible].

[indiscernible] two quick ones, please. First, a follow-up on the GLP-1 franchise in diabetes. I was wondering how could you realize the business in the coming years? It will be mainly driven by innovation, and it maybe give us a little bit more color on the two different geographical areas, U.S. and ex U.S. And my second question is for Martin. Regarding [indiscernible], when should we have more visibility on the profile of the two products? And whether you would -- you intend to decide to keep one or both going forward depending on the profile. So if you could add more color on this point [indiscernible].

Thank you, Florent. Two questions we split the first in two. So Emil on how to drive Ozempic in I/O and also to Jamey on driving Ozempic Pill in U.S. And then over to you, Martin, towards.

Yes. Thanks for the question. We are very much focused on getting back in the game with Ozempic now that we have full supply as of 8, 9 months. And we are seeing already some emerging positive trends in terms of share growth, particularly in can. And what will further increase the momentum, we believe, is our 2.0 launch. We've had the first launches in 3 European markets particularly in Germany, we're seeing very good traction, but also in the Netherlands. In the U.K., it always takes a bit longer with local payers, et cetera, but remain optimistic there as well. You might know that in IO, 2/3 of all patients have already gotten to our 1 milligram dose and many would benefit from upside trading both in terms of weight and A1c.

If I can maybe add another combo angle here is also that we've actually in China launched [indiscernible], which is a once-weekly combination of and our weekly insulin. And also we will launch it come this summer. We just got the approval, and we have good expectations. We have seen very good traction so far in Insulin in China. We own the 2 leading brands rights that they can solidify and also have good traction for once weekly insulin in China. So whether it's insulins or it's GLP-1, we still have a strong belief in diabetes across IO.

Thanks, Emil. And Jamey on U.S. and Ozempic, Bill, maybe

Yes. In the U.S., we'll continue to focus on the efficacy in terms of A1c reduction in type 2 diabetes, but also the holistic benefits in terms of cardiovascular benefits that semaglutide uniquely owns in that space. And then as I mentioned, the Ozempic pill we've just introduced this week, and we think that will read new life into Ozempic facing a pill on the iconic naming and awareness of Ozempic generally.

Thank you. And Martin?

Yes. Thank you very much. So it's won to go out. The 2 trains are 2 different priorities, 1 combining GLP-1, GIP and glucagon the other GLP-1 GRT and Emlen I think based on what we see so far that we both have a substantial potential to introduce weight loss across the board with a good safety and tolerability profile. But they may also contain individual trades that will clearly differentiate them. That could be an effect on liver. It could be an effect on bone respectively. And it could also be differentiated weight loss in different populations. So if you take that approach, obviously, it's early days. We intend to progress both. So we understand the full efficacy frame for both biologies, but also the safety and solubility. And we'll see more insight. We already have Phase II data of UPT251. You've seen the weight loss potential in both obesity and diabetes. It seems to be quite stellar -- and obviously, with the 2 data coming in from our internal triagonist next year, we'll have better visibility on how to potentially differentiate.

And operator, we'll take the last question.

Two last questions for today comes from the line of Carsten Madsen from Danske Bank.

I was just interested in hearing your wording in the ex U.S. or the GOVI launch. When you launched in the U.S., you're clear that this would be a full broad-based sort of very aggressive U.S. launch of oral Viomi, but what's your sort of commentary on the ex U.S. loans including maybe observations on pricing levels outside the U.S. going to be [indiscernible] tablet.

Great. Thank you, Carsten. And that's a question for me. Yes. Yes, we are, of course, excited to have the opportunity to launch in selected key markets that lend themselves particularly well to the Wegovy pill in IO, and we see a lot of halo effect from the U.S. already also on our injectable franchise. So we are going to go all in when we get the chance to launch, there will not be any half measures in IO where we launched. But of course, the general play in I/O this year, that's the high dose launches of 7.2 million where we see good traction with the messaging already. And of course, we then bring the device, we have a strong belief that, that will that will be part of turning around brand sentiment. So that's where we have 20 launches planned, and that's the main play. But of course, it's a nice decision where we get to launch the Wegovy Pill.

Thanks, Carsten. And this concludes the Q&A session. Thank you for participating, and please feel free to contact Investor Relations regarding any follow-up questions you might have. Before we close the call, I would like to hand over to you, Mike, for the final remarks.

Thank you, Michael. Please go to the next slide. I'm very satisfied with our announcement today. 2026 is off to an exciting start, but we have much work left to do. So expect continued hard work from all of us in all fronts. This year, we are looking forward to, first and foremost, continuing to drive uptake with new products while providing access to many more patients worldwide. Secondly, progressing our pipeline across the therapy areas and development stages, building innovation from within and through business development. Third, continuing to make this the best organization for our employees and patients we seek our medicine through fast decisions and intentional resource allocation. And fourthly, strengthening the foundation of Novo Nordisk led by sustaining our purposeful direction and thoroughly building partnerships such as the collaborations with Open AI to help ensure strong positioning, not only for this year but for many more years to come. Thank you very much. Stay tuned.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.