Novo Nordisk A S (NVO) Q1 2025 earnings call transcript

Welcome to this NOVO NORDISK earnings call for the first three months of 2025. My name is Jakob Rode, and I'm the Head of Investor Relations at NOVO NORDISK. And with me today I have CEO of NOVO NORDISK, Lars Borgård Jørgensen, Executive Vice President of U. S. Operations, Dave Moore, Executive Vice President of International Operations, Mike Duster, Executive Vice President and Head of Development, Martin Holz Lange, and finally, Chief Financial Officer, Karsten Munknussen. All speakers will be available for the Q&A session. Today's announcement and the slides for this call are available on our website, no-monautis. com. Please note that the call is being webcasted live, and a recording will be made available on our website as well.

The call is scheduled to last one hour. Next slide, please. The presentation is structured as outlined on slide two. Please note that all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified. Please turn to the next slide.

We need to advise you that this call will contain forward-looking statements. These are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, please see the company announcements for the first three months of 2025, as well as the slides prepared for this presentation.

With that, over to you, Lars, for an update on our strategic aspirations.

Thank you, Jakob. Next slide, please. In the first three months of 2025, we delivered 18% sales growth and 20% operating profit growth. I would like to start this call by going through the performance highlights across our strategic aspirations before handing over the word to my colleagues.

Starting with our focus on purpose and sustainability, we are now serving nearly 46 million patients with our diabetes and obesity treatments. This is an increase of almost 4 million patients compared to the first three months of 2024.

Our total carbon emissions rose by 37% compared to the first three months of 2024. This was mainly driven by the acquisition of new production sites and capital expenditure activities related to expansion of manufacturing sites.

These are also efforts to meet the high demand for our innovative treatments. To uphold our commitment to being a sustainable employer, we expanded the number of women in senior leadership positions to 42% compared to around 41% last year. In R&D, we completed the second and final pivotal trial, Redefine 2, with our next-generation obesity treatment, Cacrysema. We remain on track for submission in the first quarter of 2026.

Recently, our application for Wigovi 2.4 mg for the treatment of metabolic dysfunctional associated serotonin hepatitis, or MASH in short, was accepted by the U. S. FDA and granted priority review. In addition, the new drug application for weight management for all semagrutide 25 mg, or as I personally would call it, WGOVI in a pill, has been submitted to the U. S. FDA. If approved, this will be the first all-GLP1 treatment for obesity in the U. S. Lastly, we are in-licensed two early-stage acids that show promise in addressing obesity and other cardiomyopulotic diseases. Martin will come back to this and our overall R&D milestones later.

The quarterly sales growth is driven by both operating units. Dave and Mike will go through the details later. In terms of financial details, we delivered sales growth of 18% in the first three months of 2025. However, we have reduced our full-year outlook due to lower-than-planned-branded GLP-1 penetration, impacted by the rapid expansion of compounding in the U. S. NOVO NORDISK is actively focused on preventing unlawful compounding, as well as the efforts to expand patient access on our GF1 treatments. Carson will come back to this later.

We will continue to drive attractive growth and expand patient access to our innovative treatments. In the U. S. , this includes recent initiatives with NOVO Care Pharmacy, Taylor Health Collaborations, and the CVS Formulary Decision. In international relations, there remains a large unmet need for patients, and we are excited to continue focused commercial efforts in existing and future markets in 2025.

Furthermore, we realize the significance of our global footprint, including those activities based in the U. S. NOVO NORDISK has a strong presence in the U. S. with over 10,000 full-time employees across the value chain. This includes research and development and substantial manufacturing footprint. We have invested over 24 billion U. S. dollars in the U. S. over the past 10 years, including ongoing expansions and improvements to our manufacturing site in Bloomington, Indiana, and Clayton, North Carolina.

The existing U. S. tariffs does not maturely change our financial outlook for 2025. That being said, we are closely following potential tariffs on pharmaceutical products in the U. S. Before we move on to the particulars of the first quarter performance, I would like to update you on changes to executive management. Please turn to the next slide.

After nearly 30 years with NOVO NORDISK, Camilla Silvestre decided to step down. Camilla played a pivotal role in establishing our GF1 and obesity franchises and spearheaded the development of our long-term social and environmental goals. I would like to thank Camilla for her meaningful contributions to NOVO NORDISK and wish her all the best for the future. This development has triggered several organizational changes effective 3rd of April, aimed at enhancing the speed of decision-making and strengthening the execution focus within our operating units.

Ludovic HealthGuard, formerly Executive Vice President Rare Disease, now heads up product and portfolio strategy. This is a newly established area designed to forge a closer connection between commercial strategy, medical affairs, and business development across all our therapy areas. Tilda Hohmel-Böbjerg becomes the newest member of Excellular Management as Excellular Vice President of Quality IT and Environmental Affairs. The restructure will also enable Dave Moore to focus exclusively on the U. S. operations, as well as Henrik Wulff on CMC and product supply.

I would now like to give an update on our commercial execution in the first three months of 2025. Please turn to the next slide. As of January, North American operations and international operations were reorganized, and financial reporting has been divided into U. S. operations and international operations. More details on the regions can be found in the company announcement.

In the first three months of 2025, our sales increased by 18%. The sales growth was driven by both operating units, with U. S. operations growing 17% and international operations growing 19%. Thank you. In the United States, operations growing 40%, partly impacted by compounded GLB-1s, and international operations growing 137%. In both geographies, growth was driven by WGOBI, partly offset by declining sex-in-law sales, as the obesity care market is growing towards once-weekly treatments.

Rare disease sales increased by 3%, driven by a 5% sales increase in international operations. Rare disease sales in U. S. or raised and grew 1% compared to last year. Please turn to the next slide.

Today, NOVO NORDISK remains the global GLP-1 volume market leader, serving nearly two-thirds of all patients on GLP-1 treatments across diabetes and obesity. Our ongoing scaling efforts have supported close to a tripling of GLP-1 patients reached over the past three years. We are dedicated to serving patients who need our medicines and increasing our capacity to meet their needs. By integrating the three acquired filofinicides and expanding our existing capacities, we are ready to reach more patients with serious chronic diseases.

With that, I'll hand over to Dave.

Thank you, Lars. Please turn to the next slide. Sales of GLP-1 diabetes care products in the U. S. increased by 10% in the first three months of 2025. The sales increase was mainly driven by the continued uptake of Ozempic. Following the U. S. approval of the flow data earlier this year, Ozempic is now the only GLP-1 receptor agonist proven to reduce the risk of chronic kidney disease in people living with type 2 diabetes and chronic kidney disease. NOVO NORDISK remains the market leader in the U. S. , with more than 50% market share measured by total monthly prescriptions. Please turn to the next slide. WGOVI sales increased by 39% in U. S. operations in the first three months of 2025.

The WGOVI sales growth was driven by increased volumes, which were negatively impacted by wholesale or inventory movements. This was partially countered by lower realized prices. WGOVI was around 200,000 weekly prescriptions. The total U. S. branded anti-obesity market more than doubled with a growth rate of over 160% in the last year. The volume of compounded GLP-1s in the U. S. is estimated to have impacted the uptake of WGOVI prescriptions and the growth of the branded obesity market during the first quarter of 2025. In February, the FDA removed semaglutide from the drug shortage list. As a result, it is now illegal under U. S. compounding laws to make or sell compounded semaglutide drugs, except with rare exceptions.

NOVO NORDISK is working to prevent unlawful and unsafe compounding of semaglutide in the U. S. while making sure patients have access to safe, legitimate semaglutide produced by NOVO NORDISK. Following the resolution of the semaglutide shortage, we have a number of initiatives to support patients with obesity seeking treatment with Wegovia. In March, we introduced self-pay. It directed patient delivery of all doses of Wagovi at a reduced cost of $499 per month through our NOVO Care pharmacy. Access to Wagovi for cash-paying patients was further expanded in April with the announcement of collaborations with three telehealth organizations. And last week, it was announced that CVS chose WGOVI to be the only GLP-1 medicine covered for obesity on its national template formulary as of July 1, 2025.

While NOVO NORDISK is committed to providing patients with choices and did not pursue an exclusive formulary placement, we do believe the formulary decision by CVS speaks to the benefits of WGOVI. These include established cardiovascular benefits noted on the WAGOVI label, and we await the FDA priority review of the promising data from the ESSENCE trial for potential inclusion of MASH as a primary indication in the label in the second half of 2025. We will continue to identify additional ways to expand access to WAGOVI. Now, I'd like to turn it over to Mike for an update on international operations.

Thank you, Dave. If you can go to the next slide, please. Sales in international operations grew by 19% in the first three months of 2025, driven by GOP-1 products. GOP-1 diabetes sales increased 13%, driven by all regions. GOP-1 diabetes sales growth was negatively impacted by periodic supply constraints. Obesity care sales grew by 137% to $6.5 billion DKK. Sales of Vigovy reached more than $5.5 billion DKK, growing at 392%, driven by sales across all regions.

Next slide, please. NOVO NORDISK remains the market leader in international operations with a total diabetes and obesity GLP-1 volume market share of over 72%. Diabetes remains a significant global health challenge. Affecting more than 550 million individuals in IO, Rebelsis is now available in over 40 markets and continues to gain market share in international operations. Meanwhile, Ozempic remains the leading GLP-1 diabetes product within IO, having launched in around 80 markets. With improved supply, we are now fully focused on our promotional activities to further expand the number of patients reached. Also, within obesity, we see a substantial unmet need, with more than 800 million people living with obesity in IO and only a few million of these people being treated.

We have launched VGOVI in around 25 countries, including three in just the last month, reflecting a greater supply availability and staying true to our commitment in reaching more and more patients. We look very much forward to rolling out VGOVI in many more markets as the year goes through. Next slide, please. Our rare disease sales increased by 3%. This was driven by sales increase in international operations of 5%, and U. S. operation sales growth of 1%. Sales of rare endocrine disorder products increased by 14%, driven by nortotropine and improvement in manufacturing output as well as sagroyal launch uptake in international operations. This is countered by a decrease of 5% in U. S. operations, mainly driven by Nordotropine.

Rare blood disorder sales decreased by 1%, driven by lower sales of NOVO 7. Now, over to you, Martin, for an update on R&D.

Thank you, Mike. Please turn to the next slide. In March, NOVO NORDISK released the headline results from Redefine 2, the second and final pivotal trial with Cagrosemma. The trial included people living with obesity or overweight along with type 2 diabetes.

Redefine 2 was a 68-week efficacy and safety trial with 1,206 people enrolled. People were randomly assigned to receive either Cagrocema, a fixed-dose combination of Cagroentide 2.4 mg and Simaglutide 2.4 mg, or placebo. The mean baseline body weight was 102.2 kg.

The Redefine 2 trial incorporated a flexible trial protocol similar to Redefine 1. After 68 weeks of treatment, assuming all people adhere to treatment, Cagrycema resulted in a significant weight loss of 15 compared to 3 in the placebo group In the trial Cagrysema appeared to have a safe and well profile The most common adverse events were gastrointestinal with the vast majority being mild and moderate and decreasing over time in line with the GLP receptor agonist class We have now completed the second and last pivotal Cagrosemma phase 3 trial for weight management.

We look forward to sharing more data from Redefine 1 and 2 at the American Diabetes Association in June. We are on track with scaling of the Cagrosemma supply chain, and we still expect to file for the first regulatory approval in the first quarter of 2026. Next slide, please. Building on the learning from Redefine 1 and 2 trials, we have extended the duration of Redefine 4, which is now anticipated to read out in the first quarter of 2026.

Turning to Redefine 11, we expect the trial to be initiated during the second quarter of 2025. The purpose of Redefine 11 is to investigate the potential for further weight loss by prolonging the duration of the trial to 80 weeks and focusing on dose re-escalation throughout the study. Next slide, please.

In February, we submitted the oral temaglutide 25 mg to the US FDA as the potential first oral GLP-1 treatment for obesity. OASIS 4 was a 64-week efficacy and safety trial comparing once-daily OASIS 25 mg to placebo in 307 adults with obesity or overweight with one or more confidence. In the trial, adults with obesity or overweight who received all semaglutide 25 mg experienced an average weight loss of 16.6% from a baseline body weight of 105.9 kg when assuming full adherence to the treatment regimen.

Around one-third of participants achieved a weight loss greater than 20% or more. So, secondary endpoint from OASIS-4 demonstrated improvements in cardiometabolic risk factors, such as waist circumference, blood pressure, and inflammation in patients treated with oral 25 mg versus placebo. In addition, oral smaglutide 25 mg appeared to have a safe and well-tolerated profile, on par with smaglutide 2.4 mg. The full publication of OASIS 4 is expected later this year.

Altogether, oral and injectable semaglutide has been studied in robust clinical development programs with more than 43,000 semaglutide exposed patients and exposure from post-marketing use of over 33 million patient years. If approved, oral semaglutide 25 mg is expected to be the first oral GLP-1 receptor agonist for weight loss. The manufacturing of the active pharmaceutical ingredient, bulk tablet manufacturing, and packaging of oral semaglutide 25 mg are all carried out in the United States, and all manufacturing steps are up and running. We anticipate the US FDA review will be completed around the turn of this year. Next slide, please.

Turning to the upcoming R&D milestones, we look forward to a year with exciting trial readouts. Before speaking to the remainder of 2025, I would like to highlight some of the milestones from the last few months. In addition to the completion of Redefine 2 and the submission of all 25 mg of magnatite for obesity in the US, NOVO NORDISK continues to pursue the expanded treatment optionality for people living with obesity. Although not shown in the slide, I would like to mention our newest agreements to in-license two early-stage assets for the treatment of obesity and other cardiomyelicinities. This is a first-in-class oral non-incretin preclinical candidate in obesity and associated metabolic disorders, and a GLP-1 GIP glucagon triple receptor agonist.

The latter triple G asset is the second triagonist in our pipeline, and we expect the phase 1 results from our internal triagonist in the second half of 2025. Within RADC's, the main phases of two phase 3A trials, RIL 8 and RIL 9, were successfully completed with SACROYA for non-replacement indications and submitted for regulatory approval in the EU. Within cardiovascular and emerging therapeutic areas, we are excited to have submitted the ESSENCE Part 1 trial with once-weekly semagnotide 2.4 mg for regulatory approval in both EU and US for the treatment of MASH and moderate to advanced liver fibrosis, namely F2 and F3. As a reminder, ESSENC achieved both primary endpoints. By week 72, 37% of people treated with semaglutide 2.4 mg achieved improved liver fibrosis with no worsening of CO2 hepatitis, while 63% achieved a resolution of CO2 hepatitis with no worsening of liver fibrosis.

To put this into perspective, the Essence Phase III trial results are the best Phase III results within MASH to date. In U. S. alone, around 13 million people live with MASH and currently have limited treatment options available. We are excited that the U. S. FDA has accepted the supplemented new drug application and granted priority review for Ugoi to treat MASH in adults with moderate to advanced fibrosis with a decision anticipated in second half of this year.

Moving to upcoming milestones in 2025, I would like to start with a few data readouts in type 2 diabetes in the second half. Specifically, we expect the first phase 3 results from CalicoSemma from Reimagine 3, investigating CalicoSemma as an add-on to basal insulin in people with type 2 diabetes. Moreover, we expect results from the Subcutaneous and oral emicretin phase 2 trial. Our upcoming readouts and clinical programs in obesity demonstrate the breadth of our pipeline in both modalities and mechanisms of actions to meet the need of patients.

In addition to the initiation of Redefine 11 with Cagusema in the first half of 2025 that I mentioned earlier, we also expect the Phase 2 readout from the once-weekly GIP-GLP1 co-advenist in the second quarter of 2025. We are also very excited to initiate the Phase 3 program for Cagulantide in monotherapy in late 2025. Within rare disease, we expect U. S. submission for Sagroya in non-replacement indications in the second quarter of 2025, as well as regulatory submissions for MIMATE in the U. S. and EU in the second half of 2025.

Lastly, we look forward to the readout of the EVOKE and EVOKE Plus trials in patients with earlier Alzheimer's disease.

With that, over to you, Kasper.

Thank you, Martin. Please turn to the next slide. In the first three months of 2025, our sales grew by 19% in Danish kroner and 18% at constant exchange rates, driven by both operating units. The gross margin decreased to 83.5% compared to 84.8% in the first three months of 2024. The decrease mainly reflects amortizations and depreciations related to catalent, as well as costs related to ongoing capacity expansions, partially countered by positive product mix driven by increased sales of GLP-1-based treatments.

Sales and disfusion costs increase by 12% in Danish krona and by 10% at constant exchange rates. In U. S. operations, the cost increase is mainly driven by promotional activities related to Vigovie and OSEMPIC. In international operations, the increase is mainly related to Vigovil launch and promotional activities. Research and development costs increased by 20% in Danish corona and 19% at constant exchange rates. The increase in cost is mainly driven by obesity care and reflecting increased late-stage clinical trial activity, as well as increased early research activities. Administration costs increased by 5% both in Danish krona and at constant exchange rates. Operating profit as a consequence increased by 22% measured in Danish krona and by 20% at constant exchange rates.

EBITDA increased by 23% in Danish krona and by 21% at constant exchange rates. Net financial items showed a net loss of 1.8 billion Danish krona compared with a net gain of 72 million Danish krona last year. This primarily reflects losses on hedge currencies and financing costs related to the funding of the Catalan transaction. The effective tax rate was 21.6% in the first three months of 2025 compared to 20.4% in 2024. Net profit increased by 14% and diluted earnings per share increased by 15% to 6 krona and 53 euro.

Free cash flow in the first three months of 2025 was 9.5 billion Danish krona compared to 5 billion Danish krona in the first three months of 2024. Free cash flow is reflecting higher net cash generated from operating activities partially countered by increased capital expenditure. Capital expenditure for property planning equipment was 13.4 billion Danish kroner compared to 8.4 billion in 2024. This was primarily driven by investments in additional capacity for API and fill finish capacity for both current and future injectable and oil products. We have returned 36.7 billion Danish kroner to shareholders mainly as dividends in the first three months, 2025.

Following the step up in CAPEX investments in 2025, NOVO NORDISK is not conducting a share buyback program. An authorization to the Board of Directors to buy back shares was, however, in line with previous years adopted at the annual general meeting on 27th of March, 2025, Should the initiation of a share buyback program later be deemed relevant? For 2025, the range for sales growth is now expected to be 13 to 21 percent at constant exchange rates. Given the current exchange rate versus Danish kroner, sales growth reported in Danish kroner is expected to be 3 percent point lower than constant exchange rate growth. The new range reflects lower than planned penetration of branded GLP-1 treatments in the U. S. impacted by compounded GLP-1s.

The outlook reflects expectations for sales growth in U. S. operations and international operations, mainly driven by volume growth of GLP-1-based treatments for obesity and diabetes. Following the U. S. FDA removal of semacrotide injectables from the drug shortage list, the sales outlook assumes a reduction in patients on compounded G1 treatments during the second half of 2025. The updated guidance reflects several efforts already underway, as mentioned by Lars, Mike, and Dave. Operating profit growth is now expected to be 16% to 24% at constant exchange rates, given the current exchange rates versus Danish kroner growth reported in Danish kroner is expected to be around 5% point lower than at constant exchange rates. The updated expectation for operating profit growth primarily reflects the lower sales growth outlook partially countered by reduced spending.

NOVO NORDISK expects net financial items to show a gain of around 0.9 billion Danish kroner. This is mainly driven by expected gains on hedge currencies, primarily the US dollar, partially offset by interest expenses related to funding of the debt-financed capital transaction. The effective tax rate for 2025 is still expected to be between 21% and 23%. Capital expenditure is still expected to be around 65 billion Danish kroner in 2025, reflecting expansion of the global supply chain. In the coming years, the capital expenditure to sales ratio is still expected to be low double digits. The free cash flow is now expected to be 56 to 66 billion Danish kroner, reflecting the lower than expected sales growth, mainly driven by lower volume growth of GH1 treatments in the U. S. All of the 2025 expectations are based on assumptions that the global and regional macroeconomic and political environment will not change significantly business conditions for NOVO during 2025, including changes in tariffs and duties.

The announced tariffs currently in effect do not materially change our financial outlook for 2025. However, a potential expansion or increase of tariffs may have a negative impact on NOVO NORDISK and our industry. That covers the outlook for 2025. Now back to you Lars.

Thank you, Karsten. Please turn to the final slide. The performance in the first three months of 2025 with 18% sales growth reflects that nearly 4 to 6 million people are now benefiting from our treatments. Further, we progressed our R&D pipeline, including completing the final pivotal trial for next-generation obesity treatment, Kliklasema. We have reduced our full year outlook due to lower than planned GLB-1 penetration, which is impacted by the rapid expansion of compounding in the U. S. I'm confident in our recent initiatives in the U. S. to support patients to seek the benefits of our GLB-1 treatments. Furthermore, the obesity opportunity remains large in its natural relations, and we look forward to reaching more patients with the additional rollouts of BGOBI globally.

NOVO NORDISK will continue to focus on commercial execution, the progression of our R&D pipeline, and expansion of our production capacity, in the pursuit of treating more people living with serious-crown diseases.

With that, I would like to hand over the word to Jakob.

Thank you, Lars. And next slide, please. And with that, we are ready to take the Q&A, where I kindly ask all participants to limit her or himself to one or maximum two questions, including sub-questions.

With that, operator, we are now ready to take the first question.

Thanks a lot, Richard. Two questions for Dave and Mike, respectively. Let's start with the first question on compounding and next steps and hand it over to you, Dave.

Thank you, and thanks for the question, Richard. To be clear, we do not support unlawful compounding. We are against the illegal importation and the continuation of compounding in the United States. As you mentioned, we did announce collaborations with telehealth providers. The reason for this is increasingly people living with obesity are seeking healthcare through telehealth companies. We need to be where patients are and to have an offering for the real Wegovi. These collaborations allow a link to NovoCare Pharmacy where the real Wegovi can be available through these telehealth companies. As we've mentioned, on May 22nd, we fully expect the FDA to enforce the law. And at that time, we will continue to fight against unlawful compounding, for example, mass personalization.

Thank you.

Over to you, Mike.

Thanks very much, David. Richard, I think to answer your question, I'll split it in between Ozempic and VGOVI. So we have Ozempic since 2019 launched and now in 80 markets across IOS, so a very decent footprint, I would say, in many, many countries. We have been launching VGOVI a bit due to the supply constraints, not at the speed we wanted to. Also partially because we were servicing and maintaining, of course, the patients that were on Ozympic, but now starting from this year as the supply constraints are lifted, we have seen an acceleration like you would not have seen before. Just in the last couple of months, six new launches and more to come as we go forward.

In terms of sheer number of prescriptions and volumes, if I just give you a couple of data points, We have currently 64% volume market share on injectable GLP-1, so on the back of Ozempic and VGOVI. And that 67% market share is rather stable, so it's not going down, and we, of course, hope to be able to continue fueling that with these so-called new launches, as well as, of course, getting back to promoting Ozempic much more assertively than we have been during the constraint period.

Thank you, Mike, and thank you, Dave, and also thank you to Richard. With that, we are ready for the next set of questions, please.

Thanks a lot, James. And on the first one on guidance, we'll go to you, Carlton.

Thank you, James, for that question. Yes, I think for the dynamics we see in our business, then we delivered 18% growth in the first quarter, and of course our aim is to continue to drive attractive growth, and that entails increasing script trends in the U. S. and continuing to drive our GLP-1 franchise in I. O. So specifically to the guidance ranges, this means in terms of the main drivers that a lot of patients on compounded products will go to branded products in the second half of this year, and we will be able to enable that through the cash channel and NOVO Care and the telehealth collaborations. We also do have a label update with MASH we spoke to before, classic commercial tactics, and then, of course, the CVS collaboration.

So the acceleration to deliver our guidance is mainly in the second half of the year when we talk about U. S. , while in international operations we will see a continued step up over the coming quarters in terms of sales growth. So that takes us to kind of the basic fundament of our guidance range. And I would say on compounding specifically, given that the data quality on number of patients on compounding is not very high, then it's based on market research where we're looking at 1 million or more patients on compounded GLP-1 today. And then we've made estimates based on how many patients will either be able to benefit from the personalized exception or will drop off treatment, and as a consequence, the rest will go to a branded product.

So a number of assumptions, but we have a lot of tactics in place to be able to capture patients that will no longer be able to have a bulk compounded product with effect from the second half of this year, given some patients will also have inventories in place personally and therefore the second half comments.

Thank you, James. Thank you, James. And I think that also covered part of question two. Anything from you to add, Dave, on what we see currently in terms of magnitude of compounding, potentially split on branded GLP-1 treatments as well?

Yeah, thank you, Jakob. I will share that the market research that Karsten mentioned also gives us an idea that certainly semaglutide is overweight. We estimate 70% of compounding is of semaglutide. But I'd like you to focus on three things, three actions that we're taking to ensure that we're effective in this transition as compounding starts to wind down. Number one, we expand the cash offering. The 499 via Noble Care Pharmacy was purposeful and planned at the time when compounding would start to diminish, as well as the collaborations with telehealth companies. And soon, that cash offering will be available in all 9,000 CVS stores. Number two, we continue to expand better coverage for WGOVI. This helps for some of those patients that may be on compounding that have insurance and would have access to WGOVI for a low copay.

And number three, as Karsten mentioned, we have targeted commercial efforts aimed at patients and healthcare practitioners so that we can focus on SEMA, the safety of real Ligobi versus compounding, as well as the availability and the affordability. Thank you.

Thanks a lot, Dave, and also thanks to you, James. With that, we're ready for the next set of questions, please.

Thanks a lot, Pete. I think both of those go to you, Lars, but let's start with the first one on commercial execution as a priority.

Yeah, thanks, Pete. You are right. This has been our focus for some time. But I think it's important to say that when you assess that based on script trends, it is really, really difficult, as there is a significant share of the business turning into being compounded, And we estimate that, you know, that's a similar amount of business as what we have in the U. S. on GLP-1.

So I think Dave outlined our tactics, and we feel honestly very confident that this is the right moment for us to make a serious change in the market. And that's baked into our guidance for the second half of the year. I think also the point that CVS actually choose our brands without us paying for exclusivity is a sign that there is a very, very strong perception around Wigobi in the market.

The added benefits we have on top of the real world experienced weight loss is great, and that is just getting even better, assuming we get the mass indication as well. So what you get in one product here is just very, very attractive. In terms of AWFU, I think there's been a lot of interest in how the all category will develop.

It's clear for us all along that we have the head start here. We have not pushed it as hard as we do now until we have ramped up manufacturing. We have seen significant scaling and efficiency step up in our API facility in the U. S. , and when we submit the data to FDA, you can assume that we have what it takes to do a full launch in the U. S. And bear in mind, as was also alluded previously, this is a molecule with tremendous safety data, so more than 30 million patient lives.

And I think we shouldn't belabor that point as physicians and patients make choice on a trusted product. And of course, efficacy is similar to what we have with Wigobi. So really, Vigovia is in a pill. I think it's a very attractive offering and assuming positive outcome with the agency. We're ready to give this a big push and also on this point show a very strong commercial execution. So thank you, Pete, for that.

Thanks a lot, Lars, and thanks a lot, Pete, as well. And with that, we are ready to the next set of questions, please.

Thanks a lot for those two, Martin. And I think, again, both will go to you, Lars. So firstly, on the CVS one.

Thank you, Martin, for the questions. You are right that we support optionality and open access to products. We believe it's in the best interest of patients and physicians that they can make the choice for the patient, and different patients have different needs. So we support that. So this is a situation where it's not a decision made by us. We have not made, say, a bid on an exclusive contract, but it's a choice that CVS has made. We appreciate the partnership we have with CVS over many years, and as Dave also alluded to, it's a partnership that now also includes our cash program in the 9,000 CVS outlets. So it's their choice. So it's not really something we have a say in.

But of course, we do appreciate the perception about the product and what it can. And I think it talks to the real world experience of Wigovi. And of course, also for our payer, what is the tangible value of reducing the risk of cardiovascular disease? And hopefully also near-term, say, the best mesh profile you can think about. And getting all of that in one product is very, very attractive from a payer perspective.

In terms of the ALL opportunity I think it important to note that this is about competition within a category of those who prefer and all We believe a majority of patients would still benefit the best from being on injectable therapy That's where you get typically efficacy. And also, we have learned over the past few years that weekly injection is actually very, very convenient. Having to deal with your disease once a week in a very simple device solution is very convenient for patients, and I think physicians are nowadays very comfortable in prescribing injectable. Having said that, there are patients who prefer an all, and we are pleased that we can compete very well in this segment.

We believe it will be way smaller than the ejectable segment. And being first to the market with a known molecule, known efficacy, known safety, and also some try to say that it's not as convenient. In our view, it is very convenient. I mean, you wake up in the morning, you take the tablet with some water, and you're ready for your day.

So we believe we can play very well in a smaller segment compared to the overall injectable category, and we'll be first assuming a positive regulatory outcome. Thank you, Martin.

Thank you, Lars, and thank you, Martin. And then we're ready to move on to the next question, please.

Thanks a lot for those two, Mike. Again, I think for the first one, we'll go to you, Lars, on GLP-1 price negotiations.

Thank you, Michael. So when you look at it, if you take WGOVI first, we have very limited WGOVI exposure in Medicare so far. And if you take some of the other, say, overall governmental funded channels like VA and Medicaid, those are channels with somewhat lower price point and I think more comparable to what we see in other geographies. If you look at OSEMPIC, obviously there's a bigger share of business in Medicare, and that's then what's being discussed under the IRA. I cannot go into specifics around it because it's still relative early days, but I think there is an established mechanism in dealing with that. So I would actually say from an overall political risk point of view, I actually think we're in a good spot because our book of business pricing exposure is either lower or is already in ongoing price negotiations compared to perhaps other products that sit in parts of Medicare with higher price point or has not yet been opened up for negotiations.

So I see a relative limited, say, additional risk compared to what we're already facing. Having said that, it is still early days and an ongoing process.

Thanks for that, Lars. And for the second one on amicrotin, we'll hand it over to you, Martin.

Yeah, thank you very much for the question. So not a lot of new to add from last quarter, as you know, the processes to submit an end-of-phase-2 package Specifically to the FDA, but also to other regulatory authorities, we are in that process and respect an outcome within the next couple of months. Then we will know, and this is what we plan for, this is what we expect, if we can progress into phase three.

And that phase three program will be initiated with current timelines into one of next year. And the focus for the phase three program will be both oil and injectable.

Thank you, Martin, and thank you, Mike. And then we are ready to take the next set of questions, please.

Thank you Sachin for those two questions. On the first on compounding we'll hand it to Karsten, and then we'll hand it over to David. Anything to add before Dave goes on to the second question on OSMPEG? But firstly over to you Karsten.

Yeah, thanks, Satin. And I wish I could give you like razor sharp data points based on high quality market data, but this is a fairly young segment in terms of data and market research. So you're correct that within Telehealth, the setup is more towards a subscription basis on 3, 6, 9, even 12 months, where patients get the incentive through a lower subscription rate if they sign up for a longer period of time. So, yes, most likely there will be some patients sitting with inventory on May 22nd. We don't have really good data on that, but that's also why we're cautioning in our outlook section of our company announcement that the market should expect a step up mainly in the second half of this year from compounding and, of course, the CVS contract.

As to brand and drop-off to different solutions, price sensitivity, etc. , I will hand that over to Dave on the in-market understanding of that one.

Over to you, Dave.

Thank you. Thank you, Carson. We believe the strong label of Wagovi, as well as the brand awareness of Wagovi, and the fact that the semi-compounded is overweight, we think that there is certainly a focus with healthcare practitioners to maintain that continuity of care. And what we've heard is the availability of branded WGOBI through these new channels, meeting the patients where they are, is a very important step in terms of that transition and the funneling of patients. As Carson mentioned, of the total number of compounded patients today, some will drop off, but certainly, as you mentioned in our guidance, we do expect to capture and see a real interest in patients coming over to the real week OVI.

And then I'll shift over to Ozempic, Sachin. As we're seeing this year so far, the growth of the GLP-1 class, it does continue. It's lower than what we've seen in years past at 15%, but that still leaves plenty of opportunities, still runway for future growth. And this continues to be a game around NBRX and our commercial leverage. So here are the things that we're focused on in the U. S. with Ozempic. First of all, our overarching commercial focus is leveraging the Ozempic label, the broadest of any GLP-1 label on the market, and continues to be the most widely known GLP-1 as well. Our commercial efforts during this year include the launch of a new campaign called the Ozempic Era campaign.

We are in the Ozempic Era, and our patients are experiencing that, and that the understanding of the broad label is something that now both patients as well as physicians understand. And then lastly, we continue to focus on decreasing the outflow, meaning maintaining longer stay time and having patients have the full effect in getting to the 2-milligram dose. Thank you.

And just building on Dave's comment before we hand it back to Jakob, then for OSIMPIC, also our market research indicates a certain level of compounding. Not a lot, but potentially in the mid-single digits of DL4-1 diabetes treatment in the US. So after May 22nd, there might also be an uplift there to go for and benefit for with the tactics they've just covered.

Thank you, Karsten.

And with that, I think we are ready for the final set of questions, please.

Thanks a lot, Joe, and first and foremost from Team NOVO, congratulations on a very impressive career. On your two questions, let's move to Dave. Dave, first of all, on GLP-1 pricing for the real Vigobi as well as for compounded ones, and then on stay time.

Yeah, thank you for the question, and also congratulations to you. So there is a range of prices that we hear in the marketplace, and it really does depend on whether or not that is a bundled price with a telehealth company in terms of offering their telehealth services as well as medicine. As you pointed out, it is less for the compounded GLP-1 than what we're seeing in terms of the cash prices, no question. When we think about the funnel, and when we talked about the guidance and expectations that Karsten mentioned, certainly we do expect some patients not to transition, meaning they may be on a compounded GLP-1, and they may not transition over to a branded medication.

One of the things that's important for us, though, is to ensure that we are educating around the availability of WGOVI through commercial insurance. We have over 55 million Americans that have coverage for WGOVI where they would receive the medicine for a low-branded copay. And what we've learned is many patients on compounded GLP-1 do have insurance. So educating them, doing insurance verification as part of our commercial efforts is also important. And then to answer your question on stay time, the current 12-month average stay time is around 7.4 months. That continues to increase as the brand grows and more and more patients continue with their therapy over time. Thank you.

Thank you, Dave, and thank you, Joe. And with that, we are done with the Q&A, please, and I'll hand it over to Lars for a set of final remarks.

Thank you, Jakob. We delivered 18% growth in the first quarter during our innovative treatments, and we had to lower our guidance for the year because of how big compounding has been of semaglutide. I hope you feel we have a clear plan for how to counter that, close that down, and really use our commercial taxes outlined today to gain a fair share of those patients. We remain very confident in the market opportunity, the number of people with obesity willing and interested in seeking care, and as we scale capacity and progress with our R&D pipeline, not least all SEMA, 25 milligram, and I would also say upcoming data for Kakasema, we feel really excited about our opportunity in this space.

So I'll close with that, and also thank Joe and wish you best of luck for the future. And thank you all for participating in this call.