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

It's my pleasure to welcome you to Novo's Second quarter results presentation. Today, we've got Karsten Knudsen, CFO, also joined by Martin Lange, our Chief Scientific Officer. [indiscernible] Head of North American Operations and Head of Product Strategy. Karsten is going to kick off as usual with the presentation, and then we'll go straight to the Q&A. So Karsten, thank you for joining us, and over to you.

Thank you, James, and welcome to the Novo Nordisk Q2 results meeting here in London, the lunch meeting. Thank you all for coming, and thank you to the ones listening in online. So we have a good team here. So again, we have Martin Lange in his first day as CSO of Novo Nordisk. So congratulations to you, Martin, on that one. I think a good timing of becoming CSO. We'll talk more about that later. And then Dave Moore from the U.S., known person, so President of our U.S. business and Ludovic -- from running commercial strategy and our portfolio planning. So we have -- we're going to go through our results briefly, and then we're going to host the Q&A session moderated by Jacob Rode, our Head of Investor Relations. So as always, then there will be forward-looking statements discussed today and forward-looking statements, they are associated with risks and assumptions. Unfortunately, that's also what we saw last week with our downgrade because we made some assumptions that unfortunately didn't fully pan through, and that's why we had to downgrade our outlook for the year that I'm sure we'll come back to. So talking about the results in the first half of the year in our -- through our strategic aspirations, I would say we are -- we continue to expand our patient reach. And I think this is really the core of Novo Nordisk, driving change for patients suffering from serious chronic disease, progressive diseases within diabetes and obesity. And now we're serving more than 45 million patients. We added more than 3 million patients compared to a year ago. So it speaks to the scaling of our business and also the future prospects of what we are operating under. On the commercial side, my colleagues will come into it and the same for R&D and financials. We delivered 18% top line growth at constant exchange rates in the first half of the year and 29% operating profit growth in the first half. Operating profit impacted by an impairment in the first half of last year and then some additional costs due to M&A and Catalent this year. So net-net, operating profit underlying is closer to the 20% growth, but still very healthy operating profit growth. And in terms of cash flow generation, that's, of course, a key premise for the company. We generated here almost DKK 34 billion in free cash flow despite investing DKK 28 billion in CapEx in the first half of the year. And we returned also more or less our full free cash flow to shareholders here in the first half of the year. So a disciplined approach on capital allocation. Then I'll hand it over to Ludovic for commercial update.

Very, very quickly. From a sales perspective, the region U.S. actually grew 17% in the first half of the year, and IO grew 19%, which is an overall 18% growth for Novo Nordisk in the first half of the year. If you look at the IO in particular, really double-digit growth on U.K. and emerging markets and APAC and 6% in China, and I'm sure we might come back to that at a later stage. From a therapeutic area perspective, you can clearly grow 18% overall growth logically. GLP-1 diabetes plus 10%; the obesity care, 58%; and the rare disease actually back to growth with a 15% growth rate across the board. And of course, with Dave here, we can delve a bit more into that, I guess, at some point. If you look from an IO perspective, the international operations growth, so 19%, driven by the GLP-1 diabetes and obesity care. You had this overall GLP-1 diabetes care sales growth of 10%, as said, with double digit in U.K. and emerging markets and APAC and this decrease in China, which is driven by the market itself. It's not a competition issue. It's actually a market expansion discussion. We might want to talk about that at a later stage. On the obesity side, in IO, a growth of 125% versus last first semester in 2024. [indiscernible], 64%; emerging market, 157% and then 361% for APAC. China is growing a lot, but of course, out of a small base. So mathematically, it doesn't make much sense, but really healthy growth on obesity care in sales and growth for the first 6 months in IO. And then over to you, Dave, for the U.S.

Thanks, Ludovic. So when we think about the obesity market in the U.S., everyone knows we're in a competitive environment. We're a competitive environment with Lilly. I'll talk a little bit about that. We're also in a competitive environment with fake, cheaper alternative of our medicine that's being imported by China, which we are keenly focused on putting an end to that. So we go back to competing in the branded obesity market. So if you think about the dynamics in the branded market, this is what we typically see when you have the lead, the first mover position, another product comes in, it's an easier position to be in to go into the doctor and say, switch to my product, start new patients on my product. By the way, I experienced the same thing when I launched Ozempic versus Trulicity, and it works. And that's the dynamic that we had. And what we learned in the beginning of the year, I took this job over in January, there was a shift last year just in terms of messaging. Actually makes sense. You have select data. It's compelling. It's meaningful clinical data, real-world outcomes, and you switch the message to be beyond weight. That was actually the name of the campaign, treat beyond the weight. What we learned is a little premature to do that. There probably will be a time to do that, and there's a meaningful discussion to have around comorbidities. But there's 2 players in the game, and it's still about weight loss. That's the primary reason for prescribing is around weight loss. It's what patients are looking for, it's what doctors are looking for. We changed that message in June to go back to driving the weight loss competitive message. We have real-world data that is head-to-head versus tirzepatide and semaglutide. We have semaglutide data where we follow patients for 2 years, and we see the average weight loss is 20%, actually just got updated to 21% because we continue to follow these patients and the We Got Together campaign. That's starting to resonate again. We're starting to see the impact of having that weight loss message. Once we solidify that competitively, then you move on to the other elements, right? And you have a discussion about the other aspects. And so what we're starting to see is a shift in NBRxs. NBRx is our sign of health. It's the leading indicator. How is your brand doing? And from about May of 2024 -- April, May 2024 to May of 2025, the NBRxs of Wegovy were going down. That's a bad indicator of your health of your brand. We are still growing. The market is growing. You can see there's growth, but the NBRxs were going down. In May, that has stopped, and we're starting to see growth. We're seeing growth with Wegovy competitively, especially versus devices. Nationally, NBRx of Wegovy device passed Zepbound device. And that is in part due to CVS conversion, but that's not all of it. It's also that we're seeing growth outside of the CVS conversion. So we will continue in this competitive dynamic. We now have an opportunity to go out and talk about a difference in CVOT outcomes. Once again, we saw outcomes last week with the SURPASS data, and our reps are armed to go in and say that this is not a class effect. It's very easy to walk in and say, we have a little bit better data. And by the way, it's a class effect. They'll all be the same. It is not. They're not the same. 12% is not 26%. So that's a conversation with Ozempic. It's also a conversation with Wegovy. Moving forward, in weeks, we'll launch MASH. MASH is a primary indication, one that entire companies have been built upon, and we have an opportunity to go out and differentiate Wegovy further in terms of that strength of the label and go out and start selling in the MASH market. We have a dedicated sales force, small. We've hired about 130 people. They'll call on hepatologists and GIs. There's only about 300 hepatologists in the U.S., and we'll focus on about 15,000 gastroenterologists and our obesity sales reps will be armed with the MASH launch. Remember, it's about 80% overlap with obesity, 40% overlap with type 2 diabetes. We're not waving any victory flags. We've got a long way to go, but this is a growth story. It's an expansion of the obesity market story. And in the beginning of the year, we'll be launching oral sema for obesity, and we'll come back to that in a little bit. Over to you, Martin.

Yes. Thank you very much. And with Dave here, obviously, as you all remember, we filed oral semaglutide for obesity in U.S. earlier this year. We expect to see an approval of that filing at the -- towards the end of this year with a strong U.S. launch starting 2026. Just to remind you of the data, with oral semaglutide in obesity, we saw a 16% weight loss, almost 17% weight loss with the safety and tolerability profile that we already know very well from semaglutide subcutaneously. So we're actually able to achieve the same weight loss, the same safety and tolerability orally as we do subcutaneously. That's very, very strong. And again, 17% weight loss, we think that is going to be outpassed or unsurpassed for a long period of time. In addition to that, and this is a potential, we aim to have the comorbidity benefits in the label, starting with the MACE benefits that we know well from subcutaneous semaglutide. So a really, really exciting offering in the obesity space to be launched in U.S. by David and his team early 2026. Broader in the R&D space, obviously, you know our focus on diabetes and obesity. We also have other therapy areas, and we see progress and activities across the board. Obviously, in the diabetes space, it's going to be very exciting to see what CagriSema could do in Reimagine-free, i.e., glycemic control and weight loss in patients with type 2 diabetes for CagriSema. It's going to be very interesting to see the Phase II data for amycretin also in the diabetes space. In the obesity space, we continue to progress. We aim to have a 7.2 milligram EU submission already here in Q3. We aim to see the readout of our triple agonist. And importantly, we'll initiate the cagrilintide in monotherapy Phase III program also later this year. That's going to be incredibly exciting in the diabetes and obesity space. I would be remiss, Ludovic is no longer so interested in rare disease, but I still have to mention U.S. approval and positive CHMP opinion for [indiscernible] and imminent regulatory filing of Mim8. And then obviously, in other disease areas, we closed down [indiscernible], not because it was a bad offering. It was just not better than semaglutide. And as you know, right now, we have, at least in the Phase III space, the strongest data in MASH. And as Dave mentioned, we expect regulatory approval for that in U.S. within a couple of months. Finally, obviously, the EVOKE data, I have to remind you, we see that as high risk, high reward. But the readout will come towards the end of the year in Q4 and obviously, going to be exciting. And with that, back to you, Karsten.

Great. Thank you, Martin. Then on outlook, which we announced last week. So we lowered our outlook linked to predominantly a lower volume growth in the U.S. compared to what we expected back at our Q1 release. So lower volume outlook for Ozempic and Wegovy. Dave was just touching on that we do see positive signs on Wegovy now over the last few weeks and data points. So sales growth outlook now 8% to 14% for the full year and operating profit DKK 10 million to DKK 16 million for the full year. Currencies updated based on July 31, so a slight tweak compared to last week, so now 3 and 5 percentage points lower, respectively, mainly linked to the U.S. dollar and the corresponding adjustment to net financials linked to the hedging of our core currencies. CapEx unchanged, while free cash flow is reduced to between DKK 35 billion and DKK 45 billion, mainly as a function of the lower U.S. outlook amplified by the gross to net payment term in that model. So that's really what drives the cash flow delta compared to the Q1 guidance. There are a few comments around cash flow in the second half of the year versus what we realized in the first half of the year. And the simple explanation is really twofold. One is higher CapEx spend in the second half of the year compared to the first half of the year. And the second reason is that on account tax payments, mainly in Denmark is back-end loaded into the second half of the year compared to the first half of the year. Adjusting for that, it's way more normalized in terms of cash flow generation across the year. So that covers the financial outlook. And now we're ready to move over to Q&A. So over to you, [indiscernible].

Thank you, Karsten. Thank you, Dave, Ludovic and Martin. [Operator Instructions] And we start with James, our host.

James Quigley from Goldman Sachs. So a quick question, Martin, on orforglipron Phase III data from [indiscernible] has just been released. So the placebo-adjusted weight loss of around 11.5% at 72 weeks, 24% vomiting, 10% discontinuations at the highest dose. So what is your view on the product relative to Wegovy and to oral sema 25 milligrams? And then Dave and then Ludovic, you had a good slide in the back of the presentation yesterday on the segmentation of the market. Does this data change how you think the competition will develop in those segments?

So I think the number speaks for themselves. If we were to compare a 17% weight loss to 12% weight loss, a withdrawal rate due to adverse event on the highest dose of 10% versus 7% overall withdrawal rate on the highest dose, 25%, which was, I think, 18% for semaglutide 25 milligram. It speaks for itself. It appears that -- and again, it's an indirect comparison. There is a substantial difference in weight loss potential, but also in the safety tolerability profile between the 2 offerings. At the same time, we can scale oral semaglutide. And therefore, I think we are -- it's fair to say we're super excited about launching that product in a competitive space.

We're really excited to launch this product. This is a good old-fashioned Novo Nordisk launch where we have a competitive compelling profile. The reason we decided to move forward with this launch regardless of orfo was because we had a product with meaningful weight loss with a known compound and familiarity and safety in millions of people using this worldwide in addition to the broadest label. That's the reason we decided to bring it forward. We know what 16%, 17% weight loss means. And I think what we're really excited about is this sort of segments of the market that are not motivated to go and seek treatment today, either because of the way they see their disease or they're not motivated to go and seek a medicine that would require an injection. There is another segment of people out there living with obesity that are very interested in an oral daily GLP-1, and we're going to treat it that way in an unconstrained type of launch in the U.S.

And if you take a step back, the whole idea that we shared, which is this idea that you don't have one single population of patient with obesity, but actually subsegments of them can only be reinforced by that view. We don't believe that -- if anything, we believe that the share of the oral market will actually grow significantly given the quality of what you have here, efficacy-wise, tolerability-wise and including with the cardiovascular benefits, you can really bank that into the profile. And that will be very helpful to start unlocking all these groups of segments that are today not really already getting into the obesity market, but we'll get there. And we start to have quite precise ideas of who these groups could be. So in other words, -- we believe in the oral part of the market. We believe that the Wegovy is actually -- has the potential to be best-in-class there right now, given the data that we saw this morning, and we have a trust that we can really do a super launch in the U.S.

Yes. Thank you. I mean we're going to team up pretty well as we start putting these things together. You can already imagine the type of DTC as I'm thinking about. I'm a pretty simple sales and marketing guy. When you can say your product is better, things usually happen in the marketplace. And at least from what we've seen in the first-generation sort of oral small molecule, taking the lead from our CSO, we made a good move in terms of thinking about oral sema for obesity, and it was a good call.

Building on that and to finish up your question, it's not only good for the oral market. It's also good because you're increasingly seeing that the patients will have a journey towards obesity. They might start with an oral, get to injectable. They might start with injectable, get to an oral. So it's not just the subgroup themselves you're opening. It's actually the full lifetime value of a patient, you can actually multiply by having several different offerings of high quality, which is the one we believe we are bringing to patients today. So it's a double [indiscernible] in a sense for us.

Brilliant. Wonderful. Let's move to the front table here, Thibault first, and then we'll go to Simon afterwards.

Actually, just a clarification from Martin on CagriSema single chamber. I think you mentioned yesterday the need to run a clinical equivalent study. Can you just help us a bit with the time line when you think you can start this study? How long it would take? What does the submission process look like for this type of of study? And I guess, I mean, the reason I ask this question is just to sort of compare the time line for CagriSema single chamber with amycretin [indiscernible] because if they get closed, how do you think of one versus the other?

Maybe you do on the time lines afterwards, then Ludovic, you can do on amycretin versus CagriSema?

So absolutely. And obviously, we see a benefit in terms of supply flexibility to have the single chamber. I do want to call out, we are scaling to have a very strong launch with the dual-chamber device, but it will give us that flexibility. It's an upside if we can do it. And I have to do the clinical equivalent study. It's going to be smaller and shorter than what you would conventionally think with their Phase III study. So we just had to show similar weight loss and trajectory weight loss and similar safety and tolerability profile. We intend to initiate the study around the turn of the year, and I won't go further into the time lines.

And on having multiple treatments in the market, Ludovic?

I think the whole question is bringing the diversity to the different patient populations, and we really believe in the value and efficacy end-to-end safety profile of amycretin. By the way, we have the injectables, we have the oral as well, which is not the case for CagriSema. So again, you're offering to the patients a portfolio of options that are really based on helping them adapting their treatments to what they really need and the associated comorbidities because to me, what's really interesting beyond the format is the kind of programs we're designing. And I'm sure that Martin will come to that later on. But the idea is to replicate from a scientific perspective, the diversity of patients that you find in the market and enriching the MACE program, as an example, with substudies or subparts and subpopulations on which we're going to study the very specific needed endpoints, sleep apnea, talk of osteoarthritis, we talked to other benefits that we will enrich the program with. So for me, it's not just a format discussion. It's the ability to answer the wait first because we won't do the same mistake twice, wait first and then the comorbidities that are associated with the various subpopulations we're targeting.

Very good. Thanks a lot. Let's go to Simon then and onwards to Harry afterwards.

Simon Baker from Rothschild & Co. Redburn. Let's go back to the market as it stands today. You are seeing encouraging upticks in NBRx, but you still got the problem of compounding, which you said is pretty much unchanged. So can you give us some sort of help in thinking what is a reasonable time frame over which to expect that to change? I know it's a difficult thing to ask, but if things go as planned, would we expect this to be meaningfully lower in '26 or '27? How long -- or indeed '25, how long would it take to have an impact there? And related to that, it doesn't look like you filed a Section 337 complaint with the International Trade Commission to block infringing API coming into the state. Is that true? And if not, do you plan to do so? And if so, when?

Yes. I may let Karsten answer kind of any legal action or comments. But let me focus on U.S. and enforcement right now. We have not seen a meaningful change in the compounding in the U.S. after May 22, which is when compound became illegal again, except for rare circumstances, which is a grace period after being removed from the drug shortage list. We have seen some change in the dynamics in terms of moving from 503B to 503A kind of who is compounding and kind of moving towards a more mass personalization versus just mass production and compounding. We haven't seen a change on where it's coming from, Simon. We track it. We see it. Most of it's coming in from China, largely from plants that are not approved. Certainly, the methodology is not approved in terms of the way that they're producing synthetic API, fake synthetic and the way that it's coming into the country. And it's being coming in, in containers that says not for human use for research purposes only, right? That is where we're in active dialogue right now with FDA, and we're having meaningful dialogue. You can imagine we've been having conversations for a couple of years, right, since we were put on the shortage list and we saw this compounding. That dialogue has changed to be productive, to be responsive. I don't -- I can't put a date like in terms of when we're going to see something. We do have expectations. We do have time lines we discuss with them unless it's going to escalate on our end to further action. In terms of how fast does it go away, it's a little bit difficult to say. The most important thing for us is to get enforcement and to stop the fake API from coming in, then we can go into our next order of execution and combating this and bringing it back to the -- what is the rule letter of the law and it's for rare circumstances. It's not launching a dose that's not even approved in a mass marketing way, and that's what we're really focused on stopping.

Yes. So -- and just covering the second part of the question around ITC, that's correct. I would say that building on Dave's comments that all options are on the table. So now the commercial messaging and the public affairs angle to it, the regulator dialogue and of course, the litigation pathway on several avenues. So we have -- we are all in on both capabilities, advisers, et cetera, to have all options on the table. And then we find the best way forward. And for obvious reasons, we cannot comment on yet nondisclosed litigations.

Let's move to Harry.

Harry Sephton from UBS. I just want to touch on capacity. So you've previously guided to Catalent capacity coming more on stream in 2026. And clearly, you've been ramping up your CapEx since around 2023. So we should expect that to further add to that. Combine that with sales having disappointed this year, what are we looking like in terms of capacity utilization going into next year? And then what does that mean in terms of looking to compete maybe more aggressively on price to try and boost volumes? And maybe to just wrap into that, you've obviously got the loss of exclusivity of sema in a number of markets next year. Will you look to compete on price in those markets with generics?

You have that one, Karsten?

Yes, absolutely. On capacity, so clearly ramping capacity, and we see very good progress on the different programs. And I can inform you that now all 3 Catalent sites are producing Wegovy. So that builds, of course, a lot of resilience in our system. And then our CapEx plan, of course, yields a lot of extra capacity for the company. And that's back to my introductory comment about how much we're scaling. So we're scaling more than 3 million patients just compared to a year ago. So enabling that future scaling, then we believe that the CapEx program also in light of the significant unmet needs in our portfolio is spot on what we have to do. In terms of the CapEx program and competition and competitiveness, I would say that clearly, we are going for defending our space in this market, and we're going to defend volumes. And with our productivity, our unit cost and our manufacturing footprint, we're going to fight for our space.

Thanks, Harry. Thanks, Karsten. Let's move here to Pete.

Peter Verdult, BNP. Just one question. You talked about the market segmenting. What about price segmentation? I realize you're not going to talk about pricing in detail, but high level, it's pretty obvious you're talking about oral 25 being Wegovy in a pill. So I think everyone in the room would think parity pricing to where we are today. You've got a competitor who had rave reviews about ortho data in diabetes at ADA and have now produced data that is clearly not tirzepatide like. So in terms of base case expectations, when you think about that oral GLP-1 segment of the market, are you assuming base case that it's a much lower price segment versus the injectable market?

You want to offer that one, Dave?

Yes, happy to. Yes, not guiding, of course, on any pricing strategy, right? And we're not in a hurry to raise the price down in this category, right? When it take compounding aside, it's still largely 2 manufacturers. And I think there's a shared view of really balancing the value and access. As you said, it is sema in a pill, and we certainly want to protect that ratio value to access. There is, of course, segments of the population that open up as price goes down. And we're learning from that in the cash channel. We're learning from that and what we see in telehealth and partnerships. And that's just something that we're going to continue to watch and get smart about it.

I think maybe answer on that side, we're looking at the as a price point one-off. And it's actually not the way the market is reacting. People are looking at longer view at subscriptions that we can see in some of the direct channels. So it's actually much more, again, a lifetime value of a patient throughout the journey of initiation and then maintenance that needs to be taken into account. And that's why the one-off doesn't really matter. What matters is if you discount back what you're going to get from a pricing perspective month after month in the whole journey. And that's actually what we're experimenting as we speak, more than just having a one single price point. That's the thing it's important. It's also important to make sure that from a cash perspective, we have to preserve a certain consistency, as you can imagine, between all the various channels we have. Otherwise, it's becoming messy and the arbitrage that we don't want to create.

Thanks, Ludovic. Thanks, Dave. Then we have Richard Vosser hiding in the corner.

I just have one question. Just stay time globally, how is that evolving? And how do you think stay time will evolve in different channels like oral? I can imagine that with the orforglipron data, maybe the stay time will be rather short. But do you think payers will use that to step through in the U.S. market, but just different stay times, different market segments and how is it evolving now?

Absolutely. And I think it's very interesting what you're saying. You're right. I think it's going to be by group of patients. We know that we have right now around 7 months, if I'm not mistaken, on Wegovy and I think it's more years, several years on Ozempic. We believe that some of these patients also based on the pricing structure of subscription, et cetera, might actually have a longer stay time. We might also have patients that are very active for 7, 8, 9 months, and then they will pause and start again. So I think it's going to be very difficult to have one single weighted average stay time that is meaningful for the variety of patterns and behaviors we're seeing. This being said, everything we're doing is to extend stay time. And we're doing -- and I'm sure that David will comment on that. We are launching a lot of initiatives to make sure that the longer you stay, the longer you see the benefits. And if you think about what we saw with SURPASS in the data, we now see that all the GLPs are not the same that the CV benefits are gained on the long run, all this actually [indiscernible] for longer stay time for the patients. That's true for Wegovy as much as for Ozempic. So we're doing a lot to extend it, but I think that the average would be less and less meaningful with time.

Thank you, Ludovic. Then we'll move here in the middle.

[indiscernible] from Berenberg. I just had another question on pricing. Obviously, in the cash channel, we've seen a lower penetration for Wegovy than anticipated. And obviously, we've talked about lots of factors for that. But how much do you think that is also to do with price competition with Lilly? And Ozempic coming through into that channel in H2 this year, do you expect to go in at a lower price point than what you've got with Wegovy at the moment?

In terms of the dynamics of our cash channel, right, I mean, Lilly started about a year before we did in terms of having Lilly Direct and then Zepbound vials, we have an interest to continue to expand that, and we will. And you'll see more efforts and initiatives in order for us to expand that cash channel with partners, with NovoCare Pharmacy, right, and other intermediaries. Because we think that market is opening up, right, and the sort of consumerism of obesity, it's clear and it's apparent. And we intend to participate in that. We'll have a portfolio of offerings, right, in that cash channel. I think we compete well on price right now with Lilly. I don't think there's a meaningful difference that I can glean from the research. It's a different story, right, in compounding and what dynamic exists there. That's why all of our efforts are on the table, as Karsten mentioned, to curtail that. With respect to Ozempic coming into the cash channel, no specific comments that we would make. But you can probably understand why we want -- would not want those prices to be meaningfully different as Ozempic does participate in the obesity market, even if not by design.

Good. Let's move over here to [indiscernible].

[indiscernible] from Barclays. So I think we have one compounding market size because you mentioned currently, you still have like 1 million people on the compounding. And we are just wondering like how confident you are in terms of the projecting of the size of the compounding market? Like how bigger or smaller it could be because we previously heard from him that they were saying there are around like 1.5 million people on personalized therapy and continues to grow every day. And of course, we know it's not all on GLP-1s, but just like curious, is it possible like the marketing market could be bigger? And also, like just wondering in terms of your revised guidance, anything you could share like that is attributable to this persistence of the compounding market?

You want to go first, David and go to you Karsten, on guidance assumptions.

Yes, I'm happy to start. I think the level of precision, right, that we can get in terms of this fake market, which runs through medical spas, aesthetic clinics, places like [indiscernible] that are public companies is certainly not as accurate as we can with our own longitudinal data in IQVIA, right? Even though I think IQVIA was broke this week with NBRx, it's just not as precise. We do it through market research. We do qualitative. We do quantitative larger studies, and it gives us a good feel in terms of the amount of prescribing that's happening, the number of patients that are on. And our triangulation of that currently is we still believe it's 30% of the market around 1 million patients. Of course, there's different stay times, people coming on and off and switching, but that's as precise as we're able to get at this point.

Yes. And on our outlook for the year, we have not included any upside from compounding in our guidance for the year. So even if there were some positive signals, say, from regulators in the coming weeks or months, it's not baked in. And one of the reasons or the key reason is really that there will be a lag effect before inventories are wound down and everything is stopping. So this would more be a benefit into '26 and '27.

Clear. Let's move to Michael for the next one.

Michael at Jefferies. Karsten, a question for you. Nova used to guide for the next year with Q3 a long time ago. And there's quite a few balls in here for 2026, whether this is Ozempic trajectory, oral launch cost base. Do you think you'd be in a position to offer a view on 2026 or would you want to with the Q3 results?

Well, so I can only talk generally about 2026 because, as you know, we're only guiding come our full year results. I believe in the market space we're in now, that's the appropriate point in time to be guiding for '26. The starting point is really the notion of unmet need and the ramp of patients, as I spoke to before, with more than 3 million patients year-over-year. So that's, of course, our key focus to continue to drive that. Then we are focused on launching also obesity in the U.S. So of course, that's a key priority. Mim8 is also getting closer. It may not be a big positive in '26, but it's still getting closer. And then you could say, in terms of LOE, there's been some discussions. So at the call, I was saying what we're looking into when we take everything we know today in terms of time lines and price points, et cetera, and LOE, then it's a low single-digit impact to top line growth next year. So these are some of the key building blocks that we're looking into, but very focused on driving growth.

Thank you, Karsten. Thank you, Michael. Let's move back to James, round 2.

My question is on health care tourism. So next year, Canada will have generics. So there's going to be generics flooding into the market and [indiscernible] were in the FT yesterday or the day before, talking about 60% to 70% discounts to list price. So how do you assess the risk of either generic semaglutide generic Ozempic coming down from Canada through into the U.S. or more so if there is branded Ozempic, branded Wegovy in the U.S. that could also potentially where patients go over and get prescriptions and then come back and potentially create a market that way. So what are the defenses that Novo has to guard against that?

Cross-border trade for you, Dave?

Yes. I mean I think we can do that, of course, probably build on it. There is not a legal mechanism for generic product to enter into the United States that's not approved, right? And then you could say, well, that's what we said about compounding. But there's not an incentive for Canada or companies operating in Canada to allow that to happen. If you're talking about border states and crossing the line with your car, I mean, that happens today, right? I think what we have to be really clear about is the legal activities that we can take and we can enforce and be prepared for when there is generics that are approved around the world and make it clear really what our response is here in the U.S. to start.

Yes. Not a lot more to add. So it's part of the building block I gave for outlook, that is erosion in Canada. So it is going to happen in Canada. And then, of course, our legal and regulatory teams, they are looking at defending our U.S. business in this context from inappropriate parallel trade.

Indeed. Let's move back to Pete before coming to the mid-table afterwards.

Yes. Pete Verdult again from BNP. Karsten, just to follow on from yesterday's question on CapEx. I know you've been very clear, low double digit, but you are spending an inordinate amount this year, DKK 10 billion. And let's be fair, if you ask everyone around the room what Novo revenue is going to be in 3 or 4 years, there's going to be a wide range of expectations. So can I just ask the question differently? When will the bulk -- when can you start to get more towards normalized CapEx in terms of not having to spend $10 million a year? So kind of push a little bit more on that.

Yes. You are always welcome to push on your questions, Pete. So the short version is we're very close to the peak, whether it's this year or next year, but we're very close to the peak, and then you should see our absolute CapEx levels to be coming down from there.

Good. Then we move to Simon and start with Simon.

Just want to go back to a comment you made yesterday about Rybelsus. You said you're adjusting, deemphasizing the commercial focus on Rybelsus. That prompted a client to ask, well, we have an oral version of an injectable drug and they're deemphasizing commercialization efforts on it because it's not performing particularly well. Why would obesity be any different? Now I'm sure there are lots of good reasons why. But can you just say why we should not extrapolate from the ozempic [indiscernible] experience towards the obesity setting?

Yes, I'm happy to. From a commercial perspective, Martin and Ludovic may have some, too. The they're very different. In terms of what we've seen, what we've learned about Rybelsus in the diabetes market and the place that it takes up in terms of a place in therapy is wildly different than obesity. In diabetes, all of the medicines that a patient was on as they sequence through in their disease progress were orals. They were all oral medicines, right, right up through SGLT2s. And the meaningful difference in clinicians was changing that to the injectable, right, which came in the form of Trulicity, Ozempic and [indiscernible]. And it didn't have that same sort of level of an upgrade, if you will, and the way it was viewed in type 2 diabetes. Conversely, when we think about oral, we do research and have conversations with oral, it's just the opposite. There's only injectables, right? And now there's the promise and the openness of I could have a GLP-1 in a pill. I could have Wegovy in a pill. And it's viewed very differently in terms of what that unlocks and what the potential is. And I think on the company side, it's more -- we see more opportunity, more growth, more potential, right, in Ozempic and Wegovy and then oral Wegovy than we have seen with Rybelsus and make those choices.

Anything to add from you, Martin?

Yes. I think fully agree on sort of the preference dynamics, but there is also the fact that with the doses that we have for Rybelsus, the efficacy is not comparable to that of the subcutaneous in the diabetes space. But in the obesity space, we've exactly designed 25 milligram of semaglutide to match what we can do with the subcutaneous. So I think from the clinical perspective, that just gives freedom for the patients to choose.

If you summarize, you also have a brand name difference. That's one. You have the efficacy versus the injectable. Again, the oral Wegovy and the injectable are broadly in line in terms of efficacy and tolerability. And then you have the fact that we also need to remember that Rybelsus was launched at the moment where we started to have to make some tough decisions between injectables and orals, which means that in many places where Rybelsus could actually have been successful even in diabetes options, we had to pull back because we had to dedicate some API to the injectable form, which means that the launch of Rybelsus per se is, for me, not a good predictor of what an oral -- irrespective of everything you said, what an oral could be, it's been stop and go. And in the markets where actually we could launch, Spain as an example, we actually did pretty well. So I wouldn't use the Rybelsus as a proxy for the normal behavior in the oral market for the reasons that I just mentioned.

That's great. Let's move to Harry, and then we'll go to Thibault afterwards.

Harry Sephton from UBS again. If I could go back to compounding and you talked about working with the FDA to try and limit some of the API coming into the U.S. Obviously, since the new administrations come into power, we've seen some flux at the FDA. Would you say that given your conversations with the FDA that they are acting at the speed that you would want them to? Or would you say that disruption is also adding to the delay in getting this compounding situation sorted?

Yes. Thank you for that, Harry. My answer is I would like it to be faster, but that is true regardless how fast they move given what we're experiencing right now, right? We haven't seen -- there's been a noticeable disruption in the conversations or the speed because of that, not by any means. And the support that we're getting around Congress is also moving with speed. I mean just last week, we had 80 congressional leaders send a letter to FDA saying this has to stop. And we know that there have been live conversations with some of those leaders with the leadership as well as legal leadership at FDA, and they've assured us that this is a top priority.

Good. On in the last 10 minutes, Thibault.

Dave, if you could just touch on the slowdown of the GLP-1 market -- diabetes market in the U.S.? If you could sort of come back on the key reasons behind the general market slowdown for GLP-1 diabetes. Are you experiencing any sort of access or reimbursement restrictions as the category become more costly for payers? Or is it just that the penetration rates are peaking and the market gets a bit more saturated than before?

Yes. Thank you for that. As we discussed last quarter, right, we are seeing a slowdown in terms of the growth for GLP-1 diabetes it's still growth, right? I think it's in the neighborhood of 15% first half of the year. I think there is still room for growth in the diabetes market. It's slower than what we've seen before, right? So yes, there's more patients that have been on a GLP-1. I think we're in the 30% range in the U.S., very different than the rest of the world of those that have been on a GLP-1 for diabetes. And we're also seeing this changeover, if you will, from our supply situation, where the GLP-1 diabetes market participated in the obesity market, not by plan, right? But we saw those fluctuations, right? Now we have that sort of smoothing in terms of what the real sort of growth potential looks like as demand has subsided and -- or sorry, supply issues have subsided. And we're seeing in that range. There's still room for growth. I think if we compare that, that is the area where we see a lot more potential for growth in the future for GLP-1.

Let's move back to Richard Vosser.

Richard Vosser from JPMorgan. Just on amycretin and the Phase II diabetes data that you're going to get in the second half or fourth quarter, what do you hope to learn from that trial in terms of the doses, dosing and the titration to inform on the Phase III?

It's a really good question. As you know, we've always tried to acknowledge the fact that at least for the GLP-1 biology, the ED90 for good glycemic control versus weight loss is different. and that has led to different doses -- actual doses between diabetes and obesity. We see others do it in a different way, which also makes it sometimes a little bit difficult to see full dose response on the clinical doses. That being said, we need to understand fully what does amylin biology do to the dynamics. We need more data to fully understand that. And specifically on the titration, obviously, based on everything that we know, and here, we can also include REDEFINE 1 and 2. I don't expect to learn so much on titration. But the actual doses we need to get right for diabetes versus obesity evaluating, are we going for the same doses or are we going for a differentiated dose range.

Thank you, Martin. And before asking Karsten to wrap up, let's go for a final question. Would you, Mike Leuchten?

A follow-up to that, Martin, on amycretin dosing into Phase III. I guess one question coming out of the orphan data today is like how well can one actually model PK/PD when compounds change and structures change. You've decided to move into Phase III quite quickly with amycretin. Are you still confident with the dose selection? And do you have flexibility to maybe change that if needed in Phase III?

So the actual doses, of course, we can change and the -- sorry, the dose escalation ranges can also be changed. And it's actually by design a little bit, I hate to say it, the flexible approach. Some patients will benefit from titrating every 4 weeks between the individual dose steps. Some will actually be recommended if they lose weight very fast or if they experience gastrointestinal side effects to dose every 8 week. And what we have learned so far, again, combining everything that we know from amycretin, but also from REDEFINE-1 and 2 is giving us confidence that we pick the right doses, and we are also confident on the dose titration and the steps that, that will require. Again, we can adapt. I don't think that's going to be relevant. And obviously, as we've also talked to, we've had really good dialogues with the regulators who also think about these dynamics. So at the end of the day, we will have to wait and see. But at this point in time, we are happy with the doses and the dose steps that we've chosen.

Good. And before giving it to Karsten final remarks, just thank you to everyone tuning in online as well as showing up in the room and reach out to Investor Relations in case of follow-ups. Over to you, Karsten.

Yes. Thank you, Jacob, and thank you to all for attending. I think we actually covered a lot of ground at this lunch meeting. I think it's clear that we're driving growth for the long term. We spoke about our pipeline, amycretin, CagriSema, also in obesity, competitive profiles. We spoke about all the measures we're taking in the U.S. to get back to stronger growth. We have the portfolio, we have the leadership. So now it's really about executing on what we have. What we didn't talk a lot about was international operations, which in reality is 90% of the unmet need on a global scale. So just a reminder, 19% growth in the first half and a very consistent portfolio-like approach in terms of driving growth in a very big area with sizable unmet need and a portfolio that's only started to really roll into those markets with low penetration rates, both in diabetes and Wegovy. So this is really the name of the game, driving growth not only through the end of this year, but also into the years to come. So...

71% market share -- volume market share for Novo Nordisk in this.

Exactly. So thank you for -- thank you for dialing in, and thank you for attending this lunch. And thank you to James and Goldman for hosting. Hope to see you next quarter. Thank you.

Thank you.