Novo Nordisk A/S (NVO) This fall 2022 Earnings Convention Name February 1, 2023 7:00 AM ET
Firm Individuals
Lars Fruergaard Jørgensen – President and Chief Government Officer
Camilla Sylvest – Government Vice President and Head of Business Technique & Company Affairs
Doug Langa – Government Vice President and Head of North America Operations
Martin Holst Lange – Government Vice President, Head of Growth
Karsten Munk Knudsen – Government Vice President and Chief Monetary Officer
Convention Name Individuals
Harry Sephton – Credit score Suisse
Peter Verdult – Citi
Michael Nedelcovych – Cowen
Sachin Jain – Financial institution of America
Richard Parkes – BNP Paribas
Richard Vosser – JPMorgan
Michael Leuchten – UBS
Keyur Parekh – Goldman Sachs
Simon Baker – Redburn
Mattias Häggblom – Handelsbanken
Operator
Good day, and thanks for standing by. Welcome to the This fall 2022 Novo Nordisk A/S Earnings Convention Name. Presently, all members are in a listen-only mode. After the audio system presentation, there shall be a question-and-answer session. [Operator instructions]. Please be suggested that at this time’s convention is being recorded.
I might now like at hand the convention over to your speaker at this time, Lars Fruergaard Jorgensen, CEO. Please go forward.
Lars Fruergaard Jørgensen
Thanks, operator. Welcome to this Novo’s earnings name for the complete 12 months of 2022 and the outlook for 2023. My title is Lars Fruergaard Jorgensen, and I am the CEO of Novo Nordisk. With me at this time, I’ve Government Vice President and Head of Business Technique and Company Affairs, Camilla Sylvest; Government Vice President and Head of North America Operations, Doug Langa; Government Vice President and Head of Growth, Martin Holst Lange; and at last Chief Monetary Officer, Karsten Munk Knudsen. All of us shall be accessible for the Q&A session.
In the present day’s announcement and the slides for this name can be found on our web site novonordisk.com. Please notice that the decision is being webcast at reside, and a recording shall be made accessible on our web site as nicely. This name is scheduled to final one hour.
Please flip to the subsequent slide. The presentation is structured as outlined on Slide 2. Please notice that every one gross sales and working revenue, all statements shall be at fixed change charges, except in any other case specified.
Please flip to Slide 3. As at all times, I have to advise you that this name will comprise forward-looking statements. These are topic to threat and uncertainty that would trigger precise outcomes of various materially from expectations. For additional info on the chance components, please see the corporate’s announcement for the full-year of 2022 and the slides ready for this presentation.
Please flip to the subsequent slide. In 2022, we delivered double-digit gross sales progress and working revenue progress and we proceed to make progress on our strategic aspirations. I wish to undergo the highlights earlier than handing over the phrase to my colleagues. We proceed to make progress throughout all dimensions of progress and sustainability. Our carbon emissions decreased by 29% in comparison with pre-pandemic ranges in 2019 and we proceed to succeed in much more sufferers and sufferers residing with diabetes in comparison with final 12 months.
Consistent with our aspiration of being a sustainable employer, we expanded the variety of girls in management positions to 39% in comparison with 36% in 2021. Inside R&D, we’re happy that we now have initiated the primary two Section 1 trials based mostly on the siRNA interference RNA know-how platform that we acquired in 2021. Trying again at 2022, we have now seen thrilling trial readouts throughout all our remedy areas and in 2023 we stay up for having an equally thrilling 12 months. Martin will come again to this and our total R&D milestones later.
In 2022, we ship double-digit gross sales progress reflecting sturdy business execution throughout geographies and our remedy areas by each working models contributed to gross sales progress. We noticed specific sturdy gross sales progress in North America pushed by accelerated demand for our GLP-1 therapies for each diabetes and weight problems. Camilla and Doug will undergo the small print per remedy space later. Karsten will undergo the financials, however I am more than happy with the gross sales progress of 16% and working revenue progress of 15% in 2022.
Lastly, I’ve a short replace on our strategic aspirations inside financials. We’ve achieved the U.S. aspiration of reverting 70% of gross sales to merchandise launched since 2015, and IO gross sales progress has within the final couple of years surpassed expiration of 6% to 10% progress. Consequently, we have now determined to take away these regional expirations going ahead shall be centered on and dedicated to delivering stable gross sales and working revenue progress.
With that, I will give the phrase to Camilla for an replace on execution.
Camilla Sylvest
Thanks, Lars. And please flip to the subsequent slide. As Lars talked about, our 16% gross sales progress for the full-year of 2022 was pushed by each working models with North America operations rising by 21% and worldwide operations rising 13%. The sturdy gross sales progress has sadly resulted in periodic provide constraints and associated drug scarcity notifications throughout numerous merchandise and geographies.
Our GLP-1 gross sales elevated by 42%, pushed by North America rising 36% and worldwide operations rising 57%. Insulin gross sales decreased by 11%, pushed by a 7% decline in worldwide operations and a 21% gross sales decline in North America operations. The U.S. insulin gross sales declined by 22%. This was pushed by decrease realized costs in addition to a decline in quantity. In comparison with 2021, the U.S. insulin quantity market declined by 3%.
Moreover, insulin gross sales in worldwide operations have been impacted by the implementation of volume-based procurement in China, beginning in Could 2022 and decrease gross sales in EMEA. Weight problems care gross sales grew by 84% total and worldwide operations gross sales grew by 82% and in North America operations weight problems care gross sales grew 85%. Within the U.S. weight problems care gross sales grew by 90%. Uncommon illness gross sales grew 1% pushed by 5% gross sales enhance in worldwide operations offset by a 5% decline in North America operations.
Please flip to Slide 6. Our 14% gross sales progress inside diabetes care continues to been increased than the general diabetes market. Meaning we have now improved our market share by 1.8 share factors to 31.9%. We proceed to be on monitor to succeed in one-third of the diabetes worth market by 2025. This enhance primarily displays GLP-1 market progress in addition to share good points in each working models.
Please flip to the subsequent slide. Worldwide operations diabetes care gross sales elevated by 10% in 2022, pushed by GLP-1 gross sales rising by 57%. Novo Nordisk stays the market chief in worldwide operations with a GLP-1 worth market share of 64%. That is pushed by share good points throughout geographies. Ozempic continues to broaden its GLP-1 market share management in worldwide operations with round 43% market share. Whereas the GLP-1 class progress is greater than 50%, GLP-1 penetration stays low at round 5% of whole diabetes teams globally.
Rybelsus gross sales greater than doubled in comparison with 2021. The expansion was primarily pushed by new launches and growing volumes, making Rybelsus the second largest progress contributor in 2022 after Ozempic. The elevated momentum in worldwide operation is pushed by launches in key markets corresponding to Japan, Italy and Spain.
And with that, I’ll hand over the phrase to Doug.
Doug Langa
Thanks for that replace, Camilla. Please flip to the subsequent slide. The U.S. GLP-1 market quantity grew by round 50%, evaluating the fourth quarter of 2022 to the fourth quarter of 2021. The current competitor launch in GLP-1 has supported the continued acceleration in market progress and from an NBRx perspective, we proceed to see all-time excessive ranges of latest sufferers beginning on our portfolio of GLP-1 merchandise on the top of 2022. Measured on whole prescriptions, Novo Nordisk has maintained its market share management with a market share of greater than 50%.
Please go to the subsequent slide. Weight problems care gross sales elevated by 84% with 85% progress in North America operations and 82% in worldwide operations. The worldwide branded weight problems market growth continues with a quantity progress of greater than 50%. We’re excited that Wegovy is now launched in Denmark and Norway, their first two markets exterior of the U.S. However we additionally stay inspired by the efficiency of Saxenda in worldwide operations. Area EMEA is the important thing progress driver with 96% progress in 2022.
Within the U.S., weight problems care gross sales grew 90% with each Wegovy and Saxenda contributing to progress. All dose strengths of Wegovy have been made accessible within the U.S. once more in December of 2022. And in only some weeks, Wegovy prescription traits have accelerated and already reached all-time excessive ranges. The uptake underlines the numerous unmet want for sufferers with weight problems. Many sufferers have been ready for all doses of Wegovy to be accessible once more, which has created a pent-up demand. We are actually trying ahead to persevering with the relaunch of Wegovy.
Now again to Camilla for an replace on uncommon illness.
Camilla Sylvest
Thanks, Doug. And subsequent slide, please. Our uncommon illness gross sales elevated by 1% in 2022. This was pushed by a 5% gross sales progress in worldwide operations offset by a 5% decline in North America provisions, the place blood problems grew by 7% pushed by NovoSeven in addition to the launch merchandise Esperoct and Refixia.
Particularly, Haemophilia A merchandise grew by 6%, Haemophilia B gross sales by 16% and NovoSeven by 6%. Uncommon endocrine dysfunction gross sales declined by 6%. The declining gross sales have been pushed by worldwide operations reducing 1% and by North America operations reducing by 18%. The gross sales have been negatively impacted by decrease realized costs within the U.S. in addition to the provision constraint within the fourth quarter of 2022.
And now over to you, Martin, for an replace on R&D.
Martin Holst Lange
Thanks, Camilla. Please flip to Slide 11. Firstly, I am very joyful to have the ability to share that we have now initiated two Section 1 trials inside NASH. That is significantly thrilling as a result of the 2 belongings are each based mostly on the small interfering RNA know-how that we acquired as a part of the Dicerna acquisition again in 2021. Each trials are 52-week trials and goal LXR and MARC1, respectively. Each belongings are aiming for long-term NASH decision and fibrosis enchancment with month-to-month and even much less frequent dosing.
The target of each Section 1 trials is to analyze the protection, tolerability and PK/PD profile of every asset respectively. The truth that we have now now initiated these trials is an affidavit to the profitable integration and quick development of the RNA-based analysis and improvement in Novo Nordisk. As talked about at our Capital Markets Day in March of final 12 months, our ambition is to generate an annual common of free first human doses throughout remedy areas based mostly on the RNA know-how over the subsequent 10 years.
Please flip to the subsequent slide. We’re trying ahead to a really thrilling 2023 with many essential Section 3 trial readouts throughout our remedy areas. I wish to briefly undergo just a few highlights. Inside Kind 2 diabetes, we anticipate to see outcomes from the Section 3 trial PIONEER PLUS with once-daily oral semaglutide 25 and 50 milligram, respectively, throughout the first half of 2023. The first endpoint of the 68-week trial is to substantiate superiority of oral semaglutide 25 and 50-milligram versus oral semaglutide 14-milligram on A1C discount. The expectation is to succeed in an efficacy and security profile similar to that of Ozempic.
Additionally in diabetes, we anticipate to provoke the Section 3 program with CagriSema within the second half of 2023, following the very thrilling Section 2 outcomes that we shared final 12 months. Moreover, we have now accomplished the 26-week security extension phases for the ONWARDS 1 and 6 trials with insulin icodec. The outcomes verify that insulin icodec has the potential to be the perfect starter insulin for folks with Kind 2 diabetes, whereas there are nonetheless extra assessments to be executed in Kind 1 diabetes. We anticipate to submit insulin icodec for regulatory evaluate within the first half of 2023.
In weight problems, we stay up for sharing the Section 3 outcomes from as soon as each day oral semaglutide 50 milligram, the place our expectation is to succeed in a stage of efficacy and security similar to that. Pending the outcomes, this could add to our portfolio of weight problems therapies to handle the numerous unmet want that is still for a lot of sufferers with weight problems.
Moreover, we stay up for sharing the outcomes from the continuing SELECT Cardiovascular Outcomes Trial in the midst of 2023. Inside uncommon illness, we’re trying ahead to a choice from regulatory authorities on once-weekly Sogroya for the remedy of progress hormone deficiency. This may provide a decreased remedy burden in comparison with each day Norditropin and a tool that’s straightforward to make use of for sufferers. Lastly, we anticipate to provoke a Section 3b trial with Ziltivekimab for the remedy of coronary heart failure with preserved ejection fraction within the first half of 2023. Altogether, we’re trying ahead to a really thrilling 12 months with scientific trial initiations in addition to outcomes throughout all remedy areas.
With that, over to you, Karsten.
Karsten Munk Knudsen
Thanks, Martin. Please flip to the subsequent slide. In 2022, our gross sales grew by 26% in Danish kroner and 16% at fixed change charges, pushed by each working models. The gross margin elevated to 83.9% in comparison with 83.2% in 2021, pushed by a optimistic product combine attributable to elevated GLP-1 gross sales, a optimistic forex influence and productiveness enhancements. Decrease realized costs, significantly within the U.S. and China partially offset these results. Gross sales and distribution prices elevated by 25% in Danish kroner and 16% at fixed change charges.
The rise is pushed by launch actions and promotional spend for Rybelsus and Ozempic in addition to market improvement actions for weight problems. The associated fee enhance is reflecting low exercise ranges in 2021 attributable to COVID-19 and better distribution prices. Analysis and improvement prices elevated by 35% in Danish kroner and 29% at fixed change charges. The rise is pushed by increased scientific exercise ranges inside different critical rising ailments and GLP-1 in addition to the working prices and amortizations associated to the acquisition of Dicerna Prescribed drugs.
We acquired Dicerna within the fourth quarter of ’21. Administration prices elevated by 10% in Danish kroner and 6% at fixed change charges. Working revenue elevated by 28% in Danish kroner and by 15% at fixed change charges. Internet monetary objects for 2022 confirmed a lack of round DKK 6 billion in comparison with a acquire of round DKK 0.4 billion in ’21. This primarily pertains to losses following the appreciation of the U.S. greenback as mirrored within the favorable forex influence on working income.
As per the top of December ’22, a optimistic market worth of economic contracts of roughly DKK 1 billion has been deferred for recognition in 2023. The efficient tax fee in ’22 was 19.6% in comparison with 19.2% in ’21, primarily reflecting nonrecurring impacts from acquisitions. Internet revenue elevated by 16% and diluted earnings per share elevated by 18% to DKK 24.44. Free money circulate was DKK 57.4 billion in comparison with DKK 29.3 billion in ’21, supporting the strategic aspiration to ship engaging capital allocation to shareholders. The money conversion in ’22 is positively impacted by timing of rebate funds within the U.S., together with provisions associated to the revised 340B distribution coverage within the U.S. Earnings beneath the 340B program has been partially acknowledged.
Please go to the subsequent slide. In 2023, we anticipate to extend our capital expenditure to round DKK 25 billion. This can be a vital step-up in comparison with 2022 and displays the innovation-based progress technique that we’re pursuing in Novo Nordisk. The rise in capital expenditure primarily pertains to investments in extra capability for lively pharmaceutical ingredient manufacturing and fill/end capability for each present and future injectable and all merchandise throughout remedy areas.
Within the coming years, the capital expenditure to gross sales ratio is predicted to be low double-digits. The investments will step by step add capability, flexibility and resilience in our manufacturing setup whereas additionally accommodating for potential upsides to forecast.
Subsequent slide, please. In 2022, we returned greater than DKK 49 billion to shareholders through dividends and share buybacks. Novo Nordisk has constantly returned its free money circulate to buyers by way of each share buybacks and dividends. On the Annual Common Assembly on March 23, 2023, the Board of Administrators will suggest a last dividend of DKK 8.15 for a complete 2022 dividend of DKK 12.40, a 19% enhance in comparison with 2021, making it the twenty seventh consecutive 12 months with growing dividends.
Along with the dividend, DKK 24 billion was used for repurchase of shares. For 2023, the Board of Administrators has permitted a brand new share repurchase program of as much as DKK 28 billion to be executed throughout the coming 12 months.
Subsequent slide, please. We continued 2023 with stable progress momentum and anticipate the gross sales progress to be between 13% and 19% at fixed change charges. That is based mostly on a number of assumptions as described within the firm announcement. The steerage displays expectations for gross sales progress in each Worldwide Operations and North America operations, primarily pushed by GLP-1 based mostly therapies for diabetes and weight problems care.
The gross sales progress inside diabetes and weight problems care is predicted to be partially countered by declining gross sales in uncommon illness attributable to provide constraints. The steerage ranges for gross sales and working revenue progress replicate the extent of quantity progress of GLP-1-based diabetes therapies. Additionally they replicate the inherent uncertainty of the tempo of weight problems care market growth following the relaunch of Wegovy within the U.S. and anticipated gradual rollout in worldwide operations.
The outlook consists of an expectation of continued periodic provide constraints and associated drug scarcity notifications in 2023 throughout numerous merchandise and geographies. That is pushed by higher-than-expected quantity progress for GLP-1 based mostly merchandise, corresponding to Ozempic and momentary capability limitations at some manufacturing websites. We’re step by step growing our provide capability.
We anticipate that working revenue will develop between 13% and 19% at fixed change charges. This primarily displays the gross sales progress outlook and continued investments in present and future progress drivers inside analysis, improvement and business. Business investments are primarily associated to the relaunch of Wegovy within the U.S., weight problems care market improvement actions in worldwide operations in addition to promotional actions for Ozempic and Rybelsus. The acquisition of Forma Therapeutics is negatively impacting working revenue progress attributable to increased working prices and amortizations.
Lastly, the steerage additionally displays inflationary impacts on the price base. Given the present change charges, most notably a weakening of the U.S. greenback, we anticipate a detrimental forex influence for 2023. Our reported gross sales are anticipated to be 4 share factors decrease at CER and working revenue is predicted to be 5 share factors decrease at CER. The detrimental forex influence on working revenue of 5 share factors is partially offset by a internet acquire on monetary objects.
We anticipate that monetary objects will quantity to a internet acquire of round DKK 2.4 billion, primarily reflecting good points related to overseas change and hedging contracts. Capital expenditure is predicted to be round DKK 25 billion in 2023, as I outlined earlier on this presentation. Our free money circulate is now anticipated to be between DKK 60 million and DKK 68 billion, reflecting the gross sales progress and investments in capital expenditure.
That covers the up to date outlook for ’23. Now again to you, Lars, for last remarks.
Lars Fruergaard Jørgensen
Thanks, Karsten. Please flip to the ultimate slide. We’re more than happy with double-digit gross sales progress for the full-year of 2022 and that we proceed to succeed in much more sufferers. 2023 is a very vital 12 months in historical past of Novo Nordisk as we have fun our 100-year anniversary. On this interval, we have now grown from a small Danish firm into a world one, creating life-saving medicines for hundreds of thousands of sufferers world wide.
In 2023, we stay up for persevering with our deal with business execution, increasing our pipeline and investing considerably within the growth of manufacturing capability for present and future merchandise.
With that we’re now prepared for the Q&A, the place kindly ask all members to restrict her or himself one or most two questions. Operator, we’re now able to take the primary query.
Query-and-Reply Session
Operator
Thanks. [Operator Instructions]. We are going to now take our first query. One second, please. And it comes from the road of Harry Sephton from Credit score Suisse. Please go forward. Your line is open.
Harry Sephton
Thanks very a lot for taking my query. I will simply the one on pricing, please. So our newest pricing information suggests that you’ve got solely taken a low single-digit worth enhance in January throughout your U.S. portfolio, regardless of the bigger headroom for worth will increase this 12 months with excessive CPI. Might you look to extend costs the second time later within the 12 months given the headroom for worth will increase? After which simply in your worldwide operations as nicely. There are a selection of drug pricing reforms being proposed throughout European markets. Do you anticipate that these modifications could possibly be materials near-term headwinds to your progress in worldwide operations? Thanks very a lot.
Lars Fruergaard Jørgensen
Thanks, Harry. So Doug, a perspective on how we take a look at pricing within the U.S. first.
Doug Langa
Sure. Thanks, Harry, for the query. We had a dedication again in 2016 round worth and we have held that dedication. And I do not need to give any forward-looking statements on worth transferring ahead.
Lars Fruergaard Jørgensen
Thanks. So on Europe, we do not anticipate any single occasion to be materials. We’ve through the years seen varied international locations working with the totally different reforms generally within the type of one thing that appears extra like a tax. So we used to working on this setting, and you must anticipate that for now, our steerage incorporates what we anticipate on this. Thanks, Harry. So subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. And it comes from the road of Peter Verdult from Citi. Please go forward. Your line is open.
Peter Verdult
Thanks. Pete Verdult from Citi. Two questions, Doug and Camilla. Firstly, simply in gentle of those U.S. GLP-1 traits we’re seeing, the extreme publicity and media protection. Are you able to characterize how if in any respect current payer discussions are evolving? Are you sensing any efforts to step up and prohibit entry extra aggressively? And might you present an replace on the DKK 30 million business opt-in quantity that you simply supplied at Q3?
After which to Lars and Karsten, simply if I might strive my luck and push you to higher perceive what is feasible and what’s not with respect to Wegovy capacities that you’ve got in place for 2023. If I take a look at the Q1 traits, we’re quick approaching 40,000 weekly script fee, which is implying annualized gross sales round DKK 3 billion. I do know you have talked about pent-up demand, however you and Lilly are additionally going to begin selling fairly actively to develop the market additional. So simply with that in thoughts, do you could have the theoretical capability in place to help Wegovy being a DKK 3 billion to DKK 4 billion drug in 2023? I am not asking for steerage, however I need to get a deal with on what’s doable and what’s [indiscernible] in respect to [indiscernible] market potential this 12 months? Thanks.
Lars Fruergaard Jørgensen
Thanks, Pete. So Doug, first, on U.S. GLP-1 traits peer discussions and the affected person entry we have now.
Doug Langa
Sure. Thanks, Pete, for the query. And I might say that actually, very first thing to acknowledge is that the quantity of prescriptions within the GLP-1 class remains to be solely about 10%. So there’s a variety of runway there. Secondly, what I might say is that the payers do tech discover the classes which are rising. This one is actually rising at double-digit, however additionally they acknowledge the necessity for this product. And once more, it is solely 12% — 10% of the subscription quantity. Did I miss one thing inside there?
Lars Fruergaard Jørgensen
There so.
Peter Verdult
DKK 30 million.
Doug Langa
Sure, Pete, I am sorry. Importantly, we guided on — in Q3 of DKK 30 million. We’re now at roughly 40 million lives. So it is total 80% entry, and that equates to the efficient entry or variety of lives is roughly 40 million. And that is comprised of business, Medicaid and a few federal enterprise.
Lars Fruergaard Jørgensen
Thanks, Doug. And Karsten, on Wegovy capability versus what we see available in the market now. I do know you are not going to inform the entire story. What are you able to say?
Karsten Munk Knudsen
Sure. So it is, after all, a key query that we spend a variety of time on, additionally internally to make sure that we’re not disappointing our clients after we launch merchandise in several markets. And my start line to answering the query is the steerage I simply lined earlier than. So at 13% to 19% top-line progress steerage, which in itself could be very aggressive industry-wise, is after all, very engaging and a big chunk of that progress comes from Wegovy. So we will be unable to get to this stage of steerage and not using a vital step-up in Wegovy. And as I am certain you’ll be able to admire, then it is essential for us to say that we are able to provide to our steerage. So each the highest finish and the low finish of the steerage. So that is what we decide to by way of our investor communication.
Then by way of extra eventualities, then what I might say is that the — that 19% isn’t a magic ceiling by way of our steerage. It is principally a operate of merchandise and geographies and timing. After which sure, we proceed to scale our manufacturing capability of Wegovy. As you understand, we have now one line in-house. We’ve one CMO up and working full velocity and we have now one line on monitor to be on-line in first half of this 12 months. After which one other line on monitor to be — get on-line second half this 12 months. So we have now vital step-up in Wegovy manufacturing capability.
After which I might say, simply at a last notice, after all, we have now — we wouldn’t have limitless capability. And so trending on a vertical TRx uptake is unattainable. And that is why we have been out saying watch out with the primary information factors as a result of they’re impacted by the pent-up demand that Doug was speaking to.
Lars Fruergaard Jørgensen
Thanks, Karsten.
Karsten Munk Knudsen
Thanks.
Lars Fruergaard Jørgensen
So to summarize, clearly, a major addressable market from an entry viewpoint and likewise capability coming in, so we are able to go after that chance. So very encouraging, certainly. Thanks, Pete. Subsequent query, please.
Peter Verdult
Thanks.
Operator
Thanks. We are going to now take the subsequent query. And it comes from the road of Michael Nedelcovych from Cowen. Please go forward. Your line is open.
Michael Nedelcovych
Thanks for the questions. I’ve two. The primary is on the SELECT trial. When taking interim appears to be like at SELECT, does Novo take into account whether or not or not a futility evaluation has been prespecified and presumably handed to be materials info to be shared with the market? That is the primary query.
After which the second query is on the oral semaglutide readout. So after we see Section 3 weight problems information for oral semaglutide, a few of our consultants expect meaningfully diminished weight reduction relative to injectables. If that finally ends up being the case, what % weight reduction would nonetheless help business success? Thanks.
Lars Fruergaard Jørgensen
Thanks, Michael. I believe Martin these are upwards to you.
Martin Holst Lange
Sure, completely. So with reference to SELECT, as we already mentioned, we had one look earlier than the anticipated last consequence of the trial. That was executed by a DMC. So we’re not excellent to the information. The DMC is trying on the totality of the information, and there was a pre-specification for — after they might advocate to cease use of the very convincing superiority for semaglutide, i.e., greater than 20% distinction between semaglutide and placebo.
They really useful us to proceed the trial, which makes us imagine that we’re most likely nonetheless within the realm of the 17% that we have now pattern sized for. However they take a look at every little thing and so they can advocate to cease the trial ought to they really feel to take action.
On the subject of oral semaglutide, each in diabetes and weight problems, the trials had assigned and the doses are picked in order that we anticipate to get publicity just like that of subcutaneous semaglutide, each Ozempic 2.0 milligram, and Wegovy 2.4 milligram. And we’d, due to this fact intention to have full efficacy and full security profile similar to these two formulations.
Lars Fruergaard Jørgensen
So varied lively product profiles from what we are able to inform from a business alternative perspective. Thanks, Martin, and thanks, Michael. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Sachin Jain from Financial institution of America. Please go forward. Your line is open.
Sachin Jain
Hello, it’s Sachin Jain, Financial institution of America. Simply two quite simple questions, attempting to get a bit extra coloration on what’s in information. So once more, I will strive my luck. So firstly, on weight problems, you have famous inherent uncertainty. I believe there’s been commentary on pent-up demand and money circulate with the primary information factors. So I am simply attempting to get a way of how a lot of a bolus you suppose this may go over the primary couple of weeks and finest expectations for a run fee as soon as that bolus comes off?
After which secondly, I do know Karsten, we have mentioned this loads earlier than, however GLP-1 progress fee is the largest delta to information. Simply out of your perspective, are you anticipating a pattern shift by way of full-year ’23 from the prevailing 40% to 50% progress as a result of I do not suppose a continuation of current traits as assumed even within the prime finish of information. Thanks.
Lars Fruergaard Jørgensen
Thanks, Sachin. If I attempt to deal with the primary query on Wegovy pent-up demand and sizing of that, after which Karsten, you will get to the GLP-1. So we all know for a undeniable fact that sufferers have been lined up. We’ve had some 60-plus sufferers on discover for when merchandise could be accessible. That is a fairly uncommon state of affairs to have. So we all know for a reality that there’s pent-up demand. It is actually tough for us to measurement it, to be sincere. We’re clearly inspired by the pattern line we see. However we additionally do imagine that there shall be a normalization of that as we have now gone by way of that bolus. Nevertheless it’s actually very tough for us to offer any significant sizing of it.
We’ll be trying on the first, say, a few months, say, Q1 to actually perceive how that appears. So — however the first information factors are actually thrilling. So we really feel we’re in a extremely, actually good place. Karsten, on progress charges, I recall we have been saying in prior years that we thought the expansion fee would go down. It did not occur. So any crystal ball now?
Karsten Munk Knudsen
Sure. Thanks for reminding me on that one. So I might say for — initially, that is one of many the explanation why we have now a forward-looking assertion in our announcement. That’s after we begin to touch upon future market progress charges. And I might say secondly, that is additionally one of many the explanation why we’re rolling with an unusually broad steerage vary this time round.
Once we take a look at the market progress, I can begin out with the U.S. MAT-wise for — based mostly on the most recent month-to-month information factors or on the newest information factors total. We’re round 40%, and that may be the identical ex-U.S. additionally. So a world quantity market progress MAT-wise, round 40% being the most recent information level. If we take shorter information factors within the U.S., we’re nearer to the 50% mark as a knowledge level.
When it comes to what that suggests going ahead, that is, after all, a operate of our actions and competitor actions in addition to provide capability for the gamers within the markets. So I might say we have now constructed our steerage based mostly on continued sturdy market progress. In fact, I can’t provide you with our assumptions however greater than to say continued sturdy market progress and GLP-1 in diabetes being a key progress driver for Novo Nordisk additionally in ’23.
Lars Fruergaard Jørgensen
Possibly simply including to that, when you could have a class the place you could have efficacious merchandise competing towards one another, usually results in market progress greater than share acquire and that is what we see in Kind 2 diabetes. And I believe that is additionally what we’d anticipate to see within the weight problems class that if the instances merchandise drives market progress greater than share play. Thanks, Karsten. Thanks, Sachin. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Richard Parkes from BNP Paribas. Please go forward. Your line is open.
Richard Parkes
Hello, thanks very a lot for taking my questions. Simply acquired a pair. Firstly, on CapEx growth plans. And simply on whether or not you can provide us any indication of what that elevated capability might mean you can meet by way of market growth sort of by the top of the last decade, at the very least some sort of ballpark vary by way of sort of what market — GLP-1 market growth, that may mean you can meet provide could be actually useful.
After which secondly, on the ONWARDS 1 and a couple of trials of insulin icodec. I imply, enjoying satan’s advocate appears to be like incrementally worse than beforehand. I believe with the HBA1c benefit now not vital or considerably worse in each trials exhibiting worse hyperglycemia profile. So I am simply questioning how this impacts your expectations for that product over each approvability and business potential? Thanks very a lot.
Lars Fruergaard Jørgensen
Thanks, Richard. So let me attempt to give a perspective on CapEx. After which Martin, you will get to the ONWARDS aspect. So for us, that is to create, clearly, means to provide in a market that we imagine can have a really, very engaging progress creates strategic flexibility. And I believe within the GLP-1 area, you should have the potential of getting one of many largest, say, drop classes ever seen. So actually with the ability to construct that capability and serve the markets, I imagine creates a aggressive benefit that could be very, very engaging.
So we even have pipeline merchandise coming that shall be utilizing the identical kind of capability. So each from an API and fill/end perspective, we have now a variety of optionality within the footprint we have now. And with the ability to construct this and drive efficiencies is one thing that is required to play longer-term on this class. So you must take it as an indication of confidence and belief within the current enterprise we have now and the pipeline we have now coming. Martin, ONWARDS and the later stage and what does occur for the potential?
Martin Holst Lange
Sure, completely. So initially, it is essential to recall that each ONWARDS 1 and ONWARDS 6 have been initially 52 and 26-week research. This was the regulatory intent. And within the 52-week interval of the ONWARDS 1 examine, as you understand, we confirmed a superior A1C discount with and flat and steady, sorry, hypoglycemia profile.
We then for regulatory causes, must do extensions of these two research in each Kind 2 and in Kind 1 diabetes, principally as a result of we have to present security publicity. So this focus of the extension is security evaluation and establishing the long-term security profile of insulin icodec in each Kind 1 and Kind 2 diabetes.
If I stick with ONWARDS 1, over the extra 26 weeks, we truly noticed a totally flat A1C curve present a maintained glycemic management over time. We misplaced the statistical significance. However once more, in an open label extension, you additionally lose just a little little bit of rigor and energy, and we form of must anticipate that, however it actually confirms the efficacy profile of insulin icodec.
On the subject of hypoglycemia, initially, it is essential to recall already at 52 weeks, we noticed very, very low hypoglycemia charges. There was a numerical distinction between the 2 insulins, and that distinction truly remained utterly steady all through the trial. So after we then see the statistically vital, it is a operate of extra occasions somewhat than rapidly seeing a distinction between the 2 remedy arms. And it is also essential if we put that right into a scientific context, to recall with the charges that we have now seen, a affected person on an insulin icodec on this setting must wait two to 3 years to expertise an occasion of not extreme hypoglycemia.
And in that context, I additionally need to name out that the chance of getting extreme hypoglycemia with insulin icodec in ONWARDS 1 was nearly impact of 10 decrease than with insulin degludec. So once more, confirming the protection profile of icodec on this setting. So we stay very, very assured from a scientific perspective that icodec is the proper starter insulin for Kind 2 diabetes. And clearly, we’re taking a look at ONWARDS 6, we needed to acknowledge that, we have now some work to do with Kind 1 diabetes, and Camilla can possibly discuss to the business potential of each clearly Kind 2, Kind 1 diabetes.
Camilla Sylvest
Sure. Thanks loads, Martin. So based mostly on the totality of the information that you simply simply went by way of and from the entire ONWARDS program, we’re very assured within the efficacy and the protection profile of once-weekly icodec and likewise the potential to grow to be customary of care insulin of selection for folks with Kind 2 diabetes. And as soon as weekly insulin, after all, represents an entire new approach of managing insulin that offers a variety of advantages to folks as simply described, but additionally on the comfort half. By the best way, additionally has a really optimistic environmental profile.
And to your query about Kind 1 diabetes, we’d estimate that that’s to the tune of doubtless 7% of the entire potential. So that does not change our total profile of icodec potential.
Lars Fruergaard Jørgensen
Thanks, Camilla. Thanks, Martin. It is a clear signal of our dedication to elevating the innovation top additionally in a classical space. The marketplace for the degeneration of Novo Nordisk. We’re nonetheless inviting in insulin and suppose we are able to drive great worth for sufferers and physicians right here nonetheless 100 years in. Thanks, Richard. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Richard Vosser from JPMorgan. Please go forward. Your line is open.
Richard Vosser
Hello, thanks for taking my questions. First query, simply pondering on Ozempic traits and the way you see these going ahead. I believe Q3, you have been saying 40% of sufferers have been naive to diabetes remedy of the brand new sufferers occurring Ozempic. How are you seeing the Wegovy relaunch influence that? And the way do you see form of that Ozempic state of affairs creating all through this 12 months with Wegovy again into to full provide? Do you see that slowing down considerably due to Wegovy?
After which the second query. Simply going again to the reimbursement and payers. Clearly, excellent getting 40 million sufferers. How are the payers treating the sufferers could also be within the second, possibly third 12 months of remedy if sufferers get that lengthy. In the event that they attain ranges of regular BMI or lose vital quantities of weight, do payers then say, nicely, that is sensible, you are again to regular and to come back off the drug? Or how are they treating that in your reimbursement discussions? Thanks very a lot.
Lars Fruergaard Jørgensen
Thanks, Richard. First, Camilla, on the Ozempic traits after Wegovy is available in the market, then Doug, you’ll be able to discuss a bit by way of payers with a U.S. perspective.
Camilla Sylvest
Sure. So on Ozempic, we see a continued enhance. We see — we’re again to TRx and NBRx management. In terms of how a lot of the Wegovy sourcing that’s from diabetes, then we are able to say that the uplift within the Wegovy traits within the U.S. is principally from primarily the 0.25 the starter dose. And that principally implies that these are sufferers which are new to GLP-1 remedy. In fact, trying ahead, that implies that we anticipate that there’s a potential for each of those two lessons to coexist and to proceed growing as we see each unexploited potential for GLP-1 remedy in diabetes in addition to in weight problems.
Lars Fruergaard Jørgensen
Doug, on the payer’s perspective on a number of years of remedy.
Doug Langa
Sure, Richard, thanks. I believe it is essential to notice that we’re happy with the extent of entry that we have now at this time. General, 80% entry is one thing that we’re happy with, and the crew has executed a pleasant job. Efficient entry we have been onerous at work at. As you understand, this requires opt-ins.
However once more, we’re happy with the general 40 million lives that may have entry. And the way the mother and father are treating this. There is not any stopping roles in place at this time. And I believe the payers acknowledge that this can be a persistent remedy, and that is essential for not solely stakeholders, payers, however all of the work that we’re doing is to comprehend this as a critical persistent illness, and it is a persistent illness that wants long-term remedy.
Lars Fruergaard Jørgensen
Thanks, Camilla. Thanks, Doug. Thanks, Richard. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Michael Leuchten from UBS. Please go forward. Your line is open.
Michael Leuchten
Thanks. Two questions, please. Michael Leuchten from UBS. One, if I take a look at the worth of the quantity for Ozempic and Rybelsus within the U.S., there appear to be some pattern modifications in This fall, possibly Ozempic additionally in Q3. Is {that a} truthful reflection of the aggressive rebating setting? Or ought to we not overinterpret these traits as we take into consideration the worth to quantity trying into 2023?
After which a query for Martin. SELECT is not actually one thing you speak about actively anymore. It solely actually comes up in Q&A. Is that as a result of in your thoughts, the relevance has taken a step again given it did not cease on the interim? And we’re possibly on monitor for the 17% threat discount, which will not be as significant as possibly a 25% would have been? Or is there another excuse why you do not point out it as rather more as you could have prior to now? Thanks.
Lars Fruergaard Jørgensen
Thanks, Michael. So first, Karsten, on the worth versus quantity dynamics for GLP-1.
Karsten Munk Knudsen
Sure. So Michael, initially, to your This fall questions versus ’22 or then there aren’t any modifications vis-à-vis ’22. In order you understand, usually, then for ’24 — then we give the lag of scripts, then there shall be true-ups usually in This fall that may influence the worth to quantity equation. So I believe the extra acceptable approach to have a look at it’s for the full-year.
After which I might say on prime of that, given the provision state of affairs on Ozempic, there could be additionally some noise in that calculation from modifications in stock ranges on Ozempic particularly. From there, transferring into 2023, whereas not guiding for worth and quantity for ’23, then I might say the dynamics stay the identical between ’22 and ’23.
Lars Fruergaard Jørgensen
Thanks, Karsten. And Martin, on SELECT, why are you not speaking about SELECT?
Martin Holst Lange
So initially, we’re nonetheless very excited and really assured about SELECT difficulty is clearly that we have now no outcomes to share. We’ve no information to share. And due to this fact, the one factor I can name out, which hopefully you additionally noticed in my a part of the presentation is that we’re trying very a lot ahead to the information popping out round mid-2023. And that shall be extremely thrilling. So we nonetheless suppose SELECT is essential and really thrilling.
Lars Fruergaard Jørgensen
Thanks. That is very clear. Thanks, Michael. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Keyur Parekh from Goldman Sachs. Please go forward. Your line is open.
Keyur Parekh
All proper. Thanks. Hopefully, you’ll be able to hear me okay. Two separate strains of questioning, please. The primary one on CapEx. Because the 2022 Capital Markets Day, your slides implied CapEx for 2025 to be between sort of DKK 10 billion and DKK 15 billion. What you are guiding to at this time implies CapEx near DKK 25 billion to DKK 30 billion in 2025. So simply questioning if you happen to can provide us a way for sort of how a lot of that doubling of CapEx is attributable to your notion of upper demand for the prevailing merchandise. So B2B sort of Rybelsus or GLP-1 diabetes merchandise versus how a lot of that is with a view to making sure provide for the non-diabetes, non-obesity product as that pipeline emerges over the course of the subsequent sort of two to 3 years? In order that’s sort of query primary.
After which individually sort of coming again to icodec. Camilla, would love your ideas on the way you suppose ONWARDS 1 and ONWARDS 6 the extension information modifications, if in any respect, the business positioning sort of for this molecule out of your perspective. Does this make it just a little bit extra of a world product in comparison with a U.S. product given the comfort at play right here? Or do you continue to suppose there exists room so that you can have differential pricing for this molecule within the U.S. given the extension information? Thanks.
Lars Fruergaard Jørgensen
Thanks, Keyur. Two very clear questions. So first, Karsten, on CapEx versus what we stated at Capital Markets Day and a perspective on current merchandise, new areas after which Camilla, you’ll be able to discuss to the icodec, say business alternative?
Karsten Munk Knudsen
Sure, thanks, Lars. So CapEx, after all fairly a major step-up in contrast at our Capital Markets Day and once more, that is what we’re forward-looking statements. So the world tends to alter as of late greater than typical. I might say this step-up in CapEx to me, comes on a really optimistic background. I can, sadly, to not sort of separate how a lot is what as a result of we have now each going through and a distinct share platform. So it is just a little bit attempting to separate cold and warm water, sadly, Keyur.
However I might say that the primary drivers to it’s, initially, a stronger quantity uptick than what we had constructed into our preliminary CapEx modeling clearly and the stronger quantity uptick impacts each on the API aspect of our present marketed merchandise in addition to the fill/end that we’re scaling extra so than the initiative plans. After which as to the pipeline, I might say there are two most important drivers to step-up.
And you’ll say in a historic perspective, the place we have been like, name it, between 5% and 10% CapEx to gross sales and now we’re extra within the, name it, between 10% and 15% CapEx to gross sales ratio in the direction of 25%, the delta is that traditionally, it was injectable peptide-based CapEx investments we’re doing. And we proceed to try this by way of the quantity scaling I simply spoke about. However on prime of that, we’re constructing to cater for the all platform that simply requires considerably increased quantities of API, whether or not it is for Rybelsus or semi weight problems or a few of the earlier oral compounds.
As you understand, we have now all accretion in Section 1 and we have now all GLP-1 additionally. So clearly, for the all platform after which for the nonprotein peptide platforms, I might say we’re taking a look at — and what are we doing to cater for pipeline belongings like my MACE and Ziltivekimab and our ATTI as nicely which is on an antibody platform. In order that’s the place we’re taking a look at additionally increasing our capability on the monoclonal antibody aspect. So I hope that gives just a little little bit of coloration, however not absolutely in a position to separate the new and the chilly water.
Lars Fruergaard Jørgensen
Thanks, Karsten. Thrilling pipeline line results in want for CapEx. So Camilla, how excited are you on icodec based mostly on the current information?
Camilla Sylvest
Sure, thanks, Lars. And as we simply mentioned earlier than, we stay very assured within the efficacy and security profile of icodec that given as a once-weekly insulin has the potential to grow to be customary of take care of folks with Kind 2 diabetes. And to your query, this has not modified our perspective by way of a world rollout of icodec. We stay equally assured within the U.S. and within the Remainder of the World for the way this will help folks with Kind 2 diabetes. And remember the fact that the potential of that is that the basal phase roughly consists of 30 million sufferers with a worth of round $8 billion. In order that’s a spot the place we at this time have a market share within the ballpark of one-third. So there’s ample potential to extend that.
Lars Fruergaard Jørgensen
Thanks, Camilla. Thanks, Keyur. Subsequent query, please.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Simon Baker from Redburn. Please go forward. Your line is open.
Simon Baker
Thanks for taking my questions. Two if I’ll, please. Firstly, and this pertains to some earlier questions. In recent times, the elevated spend within the U.S. on GLP-1 was offset by decrease spending on insulin, which gave some straightforward headwinds for the class to broaden. I used to be simply questioning if you happen to might give us an replace on whether or not that’s nonetheless the case?
After which [Technical Difficulty] you talked concerning the influence of the Dicerna acquisition on 4Q R&D. I simply questioned if you happen to might give us an thought how a lot of the extra R&D expense incurred was one-off and the way a lot is constant? Thanks a lot.
Lars Fruergaard Jørgensen
Thanks, Simon. I do not know you probably have these information, Doug from the highest of your head.
Doug Langa
What I might say is that this, that insulin, as you noticed, as we simply reported, proceed to be beneath strain, pricing strain, so payers nonetheless proceed to take worth there. And as I discussed earlier, there’s nonetheless solely roughly 10% of the prescription volumes popping out of GLP-1. So we nonetheless suppose that there is alternative there.
Lars Fruergaard Jørgensen
You possibly can add that to DPP-4, worth decline and shortly to come back SGLT2 may also create some area to fund innovation. So sure, Karsten on Dicerna. Anybody-off versus continued.
Karsten Munk Knudsen
Sure, Simon, as we have been speaking all alongside by way of our total strategic useful resource allocation, then we’re extremely centered on allocating extra assets in the direction of R&D to broaden and diversify our pipeline. And that you’ve got seen all year long with a major step-up in R&D spend ending at 29% for the full-year.
You are proper that within the fourth quarter, we have now a unprecedented step-up additionally once you do the quarterly trending. It is not attributable to Dicerna as a result of we had the Dicerna all alongside. So it is principally attributable to two components: one being, a, I might say, minor impairment on intangible belongings and one other piece being prices associated to the Forma Therapeutics transaction and restructuring.
And as you recall, then right here at Novo, we’re reporting clear numbers. So the place different firms would have been — a few of the firms have been adjusting this into core earnings or adjusted earnings, then right here you get what you see is what you get. As to a selected quantity for This fall in spherical phrases between the 2 impairments and Forma round DKK 0.5 billion.
Simon Baker
Thanks very a lot.
Lars Fruergaard Jørgensen
Thanks, Simon. We’ve time for the ultimate query.
Operator
Thanks. We are going to now take the subsequent query. It comes from the road of Mattias Häggblom from Handelsbanken. Please go forward. Your line is open.
Mattias Häggblom
Thanks a lot. Two questions, please. Firstly, with reference to the choice in January to double down and provoke the excessive dose sema weight problems trial. I am curious to grasp what triggered the choice and why now nearly 1.5 years after the Wegovy approval and why not earlier?
After which secondly, with prime line information from SELECT information due mid-2023. What’s an inexpensive time-frame from prime line outcomes and the information will help facilitate reimbursement exterior the U.S., a 12 months or is it somewhat two, given the scale and complexity of the examine?
Lars Fruergaard Jørgensen
Thanks, Mattias. So that you talked about high-dose weight problems proper now.
Martin Holst Lange
So initially, we see rising information suggesting that it’s doable to max out on GLP-1 biology. And it’s extremely, very clear based mostly on a few of our current begin is that we might probably enhance publicity and thereby accruing extra weight reduction than what we see with the present doses. There’s clearly, we needed to pursue, we have now to analyze as a result of there is a chance to, with out compromising on security to accrue much more weight reduction, particularly in weight problems and probably additionally improved glycemic management in diabetes. We intention to conduct these research very, very quick, and that additionally implies that they are going to be accessible to sufferers if the information helps it in an additionally distant future and nonetheless nicely throughout the related time interval for semaglutide.
Lars Fruergaard Jørgensen
Then there was a query on time line from SELECT information to reimbursement. So ballpark with out going into an excessive amount of element.
Martin Holst Lange
So a few of you could have heard about, I used to be breaking about with the ability to clearly deal with our scientific information in an inexpensive approach. I might not be taking a look at a one to 2 12 months timeline. Clearly, we’ll shut down the examine. We can have the outcomes round mid this 12 months. We’ll do a regulatory file, after which we’ll have the regulatory interactions. After which it is in U.S. as much as Doug and his crew to debate with payers and others on how that may influence the dynamics.
Lars Fruergaard Jørgensen
Thanks, Martin, and thanks, Mattias, and thanks all for taking part in our earnings name. Please attain out to our Investor Relations Officer, you probably have extra questions and stay up for meet you and discuss to you within the close to future. Thanks very a lot. Bye-bye.
Operator
That does conclude our convention for at this time. Thanks for taking part. You might all disconnect.
