Novo Nordisk A S (NVO) Q2 2021 earnings call transcript

Thank you very much, and welcome to this NOVO NORDISK earnings call for the first six months of 2021 and the outlook for the year. I'm Lars Fruegaard-Jorgensen, the CEO of NOVO NORDISK. I'd like to start by thanking you for your scheduling flexibility today as we decided to advance this earnings call as a consequence of our earlier than anticipated release of our results following an upgrade of both sales and operating profit. With me today, I have our Chief Financial Officer, Karsten Munknusen, Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Silvestre, Executive Vice President and Head of North America Operations, Doug Lange, and finally, Executive Vice President and Head of Development, Martin Holst Lange.

All presenters will be available for the Q&A session. Today's earnings release and the slides for this call are available on our website, noordnoise. com. Please note that this call is being webcasted live and a recording will be made available on NOVO NORDISK's website. The call is scheduled to last for one hour. Please turn to the next slide.

The presentation is structured as outlined on slide two. Please note that all shares, sales, and operating profit growth statements will be at constant exchange rates unless otherwise specified. The Q&A session will begin in about 25 minutes. Please turn to slide 3. As always, I need to advise you that this conference call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, including the uncertainties around COVID-19, please see the company announcement for the first half of 2021 and the slides prepared for this presentation.

Please turn to the next slide. In the first half of 2021, NOVO NORDISK has progressed on all four dimensions of our strategic aspirations. I would like to highlight a few today. As a company, we are continuously working on being the best for the world and have progressed within purpose and sustainability. Under our DEFEAT Diabetes strategy that focuses on prevention, access and affordability and innovation, we have expanded the Changing Diabetes in Children program by including Ghana as the 15th country. This will support our aspiration of reaching 100,000 children and young people with type 1 diabetes in low-resource settings by 2030.

An integrated part of being a sustainable business is to offer an inclusive and diverse working environment. In NOVO NORDISK, a number of initiatives have been launched to achieve a balanced gender representation across all managerial levels. But the reality is that progress has been slow.

The current share of women in leadership positions defined as vice presidents and above is 35%. To underline our commitment to accelerate progress and ensure leadership accountability, we are launching a global gender diversity target. Specifically, our aspiration is to achieve a minimum of 45% women and a minimum of 45% men in leadership positions by the end of 2025.

Personally, I see this as an important step to create an inclusive culture with equal opportunities in NOVO NORDISK. Martin will come back to key developments within R&D, but I wanted to touch upon a few. We have reached a very important milestone with the approval of WGOI in the U. S. to the benefit of people living with obesity.

WGOI was made available to U. S. patients in June 2021, and Doug will share more about the details of the launch later. Furthermore, we expanded our pipeline within cardiovascular disease with the heart seed collaboration and acquisition of Proteinus ATTR amyloidosis program.

For commercial execution, we have progressed on all three strategic aspirations, which Camilla and Doug will elaborate on later. Lastly, leaving the details to Carson, we are pleased with a sales growth of 12% and operating profit growth of 9% in the first half of 2021. Both measured at constant exchange rates.

With that, I give the word to Camilla for an update on commercial execution.

Thank you, Lars, and please turn to slide 5. In the first half of 2021, our total sales increased by 12%. This sales increase was driven by both operating units with international operations growing 13% and North America operations growing by 11%. All therapy areas contributed to growth, with diabetes care sales growing 11%, driven by GLP-1 sales growth and broadly unchanged insulin sales.

GLP-1 sales increased 30%, driven by North America, growing 24%, and international operations growing 46%. The broadly unchanged insulin sales were driven by a 6% growth in international operations, partly offset by an 11% sales decline in North America. The U. S. sales declined by insulin sales, declined by 11%, driven by a decline in volume and realized prices, the latter driven by channel and payer mix, as well as rebate enhancements.

Obesity care sales grew 34% overall and now includes both Saxenda and Vigobi in the U. S. In international operations, Saksenda sales grew 44%, and in North America operations, obesity care sales grew 27%. Biofarm sales increased by 7%, driven by North America operations growing 12%, and international operations growing by 4%. Please turn to slide 6. In line with our strategic aspirations of reaching one-third of the diabetes value market by 2025, our growth of 11% is faster than the overall market, and hence we have improved our market share by half a percentage point to 29.6%. This increase reflects GLP-1 growth of 30% and market share gains in both operating units.

Currently, USEMPIC has been launched in 62 countries and re-Beltos in 18 countries. Please turn to slide 7. In international operations, diabetes care sales increased by 13% in the first half of 2021, driven by all geographies. The continued rollout of new generation insulins and focus on the GLP-1 product portfolio have resulted in an increased diabetes market share in international operations, Which is now 23.9%, reflecting an increase of 1.4 percentage points compared to one year ago.

This is driven by share gains in both DLP1 and insulin. And in the last 12 months, our insulin volume market share has increased from 47% to 47.3%. Please turn to the next slide.

Biofarm sales grew by 7% in the first six months of 2021. This was driven by a 12% sales growth in North America operations and 4% sales growth in international operations. Rare blood disorders grew by 11%, driven by uptake of launch products, Esparov and Refixia, and NOVO 8 and NOVO 7. Specifically, hemophilia A products grew by 39%, hemophilia B sales by 30%, and NOVO 7 by 3%. Where endocrine disorders grew by 2%, driven by new indications and global rollout of the next generation device for nortotropin. And now over to Doug for an update on USGLP-1 and obesity care.

Thank you, Camilla. Please turn to the next slide. The USGLP-1 volume market growth is around 25%, comparing Q2 2021 to Q2 2020, Driven by once-weekly injectable GLP-1 as well as Rebelsis. NOVO NORDISK new-to-brand market share leadership is now 62.6%, driven by the continued uptake of OZEMPIC and Rebelsis. Furthermore, OZEMPIC has regained NBRX market share leadership within injectable GLP-1s in the first half of 2021.

Measured on total scripts, NOVO NORDISK remains the market leader with more than 50% market share. Please turn to slide 10. In the U. S. , Rebelsis increased its volume market share both in terms of total scripts and new patient starts in the first half of 2021. This should be viewed in light of the two COVID-19-related commercial lockdowns in the U. S. , with no face-to-face interaction between NOVO NORDISK and the prescribers.

Since mid-May, our sales force has been fully back out in the field. Importantly, leading indicators such as prescriber breath, HCP awareness, and sourcing from outside of the GLP-1 class remain encouraging, and we remain confident in the product and its long-term potential. In addition, the launch trajectory is broadly progressing in line with the average performance of major SGLT-2s that were all launched in a non-COVID world. Outside the U. S. , Rebelsis has now been launched in 17 countries with one key market being Japan, where Rebelsis has reached a 0.7% modern OAD value market share. While underlying parameters are on track, it should be noted that there continues to be COVID lockdowns in Japan, which makes it difficult for patients and a sales force to reach doctors.

Please go to the next slide. With the U. S. approval of WGOVI in June, obesity care is now a portfolio consisting of two products. Globally, obesity care sales increased 34%, with 27% growth in North American operations and 44% in international operations. As we have touched upon throughout 2020 and 2021, fewer patients have started treatment with Saxenda due to COVID-19 lockdowns and reduced access to healthcare providers.

But thankfully, the situation has now started to improve. In the U. S. , since the start of the year, we have seen positive momentum in new patient starts on Saxenda, which during the second quarter of this year were above pre-COVID levels. The U. S. launch of Vagovie has been extraordinarily fast. Following a six-month FDA review, Vagovie was approved on June 4th, launched on June 10th, and available to patients in pharmacies on June 18th. Market access has progressed since launch, and two national payers have unblocked Vagovie from their national formulary. The initial feedback from patients and prescribers has been encouraging. Five weeks after launch, more than 8,000 Wogobi prescriptions have been filled, and more than 50% of these are new to the anti-obesity medication class.

Now, the overwhelming initial demand has put the supply chain under pressure, leading to temporary shortages for the starting dose, which is 0.25 milligram. NOVO NORDISK is committed to ensuring that any patient who has started on WGOVI will be able to continue on the product, and production plans are being adjusted to satisfy the current demand. Now over to you, Martin, for an update on R&D.

Thank you, Doc. Please turn to slide 12. Now, in the first half of 2021, we have progressed our pipeline in diabetes, in obesity, in biofarm, as well as in other serious chronic diseases. Based on the significant unmet need of millions of people, as well as scientific evidence to the potential benefits of GLP-1-based treatment of dementia, We initiated in May two phase three trials, EVOC and EVOC+, investigating the efficacy and safety of all semagrotide 14 mg in early Alzheimer's disease.

As discussed before, we have in real-world data, as well as in post-hoc evaluations of our large-scale RCTs, seen the potential of clinically very meaningful impact of GLP-1 treatment on the progress of dementia. The mode of action is still being evaluated, but based on preclinical data, semaglutide is believed to work by reducing neuroinflammation as well as by impacting other pathways in the Alzheimer's pathophysiology, thus reducing neurodegeneration and slow the clinical decline in Alzheimer's disease.

The duration of the two trials will be three years with a confirmatory readout after two years. There are 1840 patients in each trial, and therefore a total of approximately 3,700 patients will be randomized, the majority of whom are diagnosed with mild cognitive impairment or early dementia of the Alzheimer's type.

In EVOC+, however, at least 20% of patients enrolled will have small vessel pathology. The primary endpoint for both trials is the change in the clinical dementia rating sum of Box's score after two years of treatment.

If successful, semaglutide has the unique potential to become the world's first oral disease-modifying treatment for Alzheimer's disease with a very well-established safety profile from across several indications. Please turn to the next slide. Within cardiovascular disease, NOVO NORDISK strategic ambition is to have at least one dedicated compound to be launched between 24 and 28.

This should target either atherosclerotic cardiovascular disease or heart failure with a highly innovative first-to-market product serving a significant unmet need. In support of this ambition, we have entered into a new stem cell R&D license agreement with Heartseed, and further acquired Prathina's ATTR amyloidosis program. Let us start with the Heartseed agreement.

NOVO NORDISK has entered into an exclusive worldwide collaboration, as well as licensed agreement for the development, manufacturing, and commercialization of Heartseed's lead asset, HS001. HS001 is an investigational cell therapy using purified cardiomyocytes derived from induced pluripotent stem cells, which is currently under development by HeartSeat for the treatment of heart failure.

HeartSeat expects to initiate a combined Phase I-II trial in Japan during the second half of this year. The collaboration very nicely complements our own stem cell technology platform.

Further we acquired Prothena broader ATTR amyloidosis program and we face two ready antibodies PRX004 for the rare heart disease ATTR cardiomyopathy More specifically this is a rare type of heart condition characterized by a buildup of amyloid deposits in the cardiac tissue. This can cause both weakening and stiffening of the heart muscle, and it is an often fatal disease with a very significant ultimate need. The acid PRX-004 has an innovative mode of action with the potential to remove myocardial amyloid, preventing further progression, and to reverse the course of the disease in ATTR cardiomyopathy. NOVO NORDISK expects to initiate a Phase II clinical trial in 22, which is expected to be followed by a Phase III cardiovascular outcome trial.

These activities support an expansion of NOVO NORDISK activities and commitment within cardiovascular We will now turn the call over to management for the NOVO NORDISK A SINGLECT and SOLE. Please go to the next slide.

Turning to the high-level RNG milestones, we start with the second quarter of 21. Within diabetes, we resubmitted the label expansion application for Sempec 2.0 mg for the treatment of diabetes to the FDA on May 28. The standard review time by the FDA is 10 months. This resubmission followed the refusal to file letter received by the FDA on March 22.

It's already been mentioned during this call, but within obesity, we've reached a very important milestone with the approval of Wegovia in the U. S. This was based on the results from the STEP program, and building on that, in Q2, we completed the Phase 3B trials, Step 5 and Step 8. Step 5 demonstrated a sustained weight loss of 16.7% over a period of full two years of treatment. Almost a little bit repetitive, but very consistently to the profile, step 8 demonstrated a similar 17.1% statistically significant weight loss. This is to be compared to the 6.7% achieved for Saxenda.

In the second half of 21, we expect phase 1 results for our glucose-sensitive insulin, as well as several trial initiations across all therapy areas, Such as the phase 3 initiation of oral semagnotide in obesity, and the CPR outcomes trial for ciltivecamab in other serious chronic diseases.

Towards the turn of the year, we expect a decision from the EU on semagnotide 2.4 mg in obesity, and OSEMPEC 2.0 mg in diabetes.

Within BioPharm, we expect results from the phase 3 program for somapacitin in growth hormone-deficient children, and results from cohorts of the ongoing combined Phase 1-2 trial with MyMate. With that, over to you, Karsten.

Thank you, Martin. Please turn to slide 15. In the first six months of 2021, sales grew by 5% in Danish kroner and by 12% at constant exchange rates. The gross margin declined to 83.0% compared to 84.1% in 2020. The decline reflects a negative currency impact of 0.7 percentage points, lower realized prices in the U. S. , and amortization of intangible assets related to the acquisition of Emisphere Technologies in 2020.

These factors were partly offset by positive product mix driven by increased GF1 sales and continued productivity improvements. Sales and distribution costs increased by 8% in Danish krona and 15% at constant exchange rates. The increase is driven by investments in our key strategic priorities, most notably launch activities and promotional spend for Rebelsis and DoCempic, market development investments for obesity, as well as sales force expansion in China. Research and development costs increased by 12% in Danish Krona and 15% at constant exchange rates. The cost increase is driven by increased investments associated with more patients enrolled in clinical trials as we progress the early pipeline within cardiovascular disease and NASH as well as the ongoing cardiovascular outcome trials, SOLE and SELECT.

Furthermore, we increased our investments in our research platform technologies. Administration costs increased by 5% in Danish krona and 8% at constant exchange rates, impacted by a low spend in the first half of 2020.

Operating profit decreased by 1% in Danish krona and decreased by 9% at constant exchange rates. The negative currency impact on operating profit is partly offset by around 1 billion Danish kroner in hedging gains under net financial items. This compares to a loss of 1.7 billion Danish kroner in 2020.

The gains on hedge currencies primarily relate to the US dollar. Net profit increased by 10% and diluted earnings per share increased by 12% to 10 kroner and 71 euro. Next slide, please. Over the past three years, our average cash-to-earnings ratio has been around 80%. In May, the share repurchase program for 2021 was increased by 1 billion kroner to a total of 18 billion kroner. It should be noted that the program may be reduced in size if significant business development opportunities arise during 2021. For 2021, the Board of Directors has decided to pay out an interim dividend of 3,50 kroner per share, which will be paid out in August this year.

This is an increase of 8% compared to the 2020 interim dividend. NOVO NORDISK has consistently returned its free cash flow to investors through both share buybacks and dividends, with dividends per share increasing for 25 consecutive years.

Finally, in Q2 we executed a 3 and 7 year euro bond issuance in an aggregate amount of 1.3 billion euro. The two tranches were issued with a coupon of 0% and 0.125% respectively. The euro bonds were issued under a 5 billion euro EMTN program. Please turn to the next slide. We now expect 2021 sales growth to be between 10 and 13 percent at constant exchange rates. This is based on the performance seen in the first half of the year across therapies and geographies, including the strong initial Vigobi uptake in the U. S. , increasing global obesity market growth, O-CIMPIC growth acceleration as well as a reduced likelihood of a negative impact from volume-based procurement in China in 2021.

The guidance reflects growth across therapy areas, but is mainly driven by GLP-1 products, O-CIMPIC and Rebelsis, as well as obesity care. Also embedded is intensifying competition within both diabetes care and biofarm and continued pricing pressure mainly within diabetes care in the U. S. Operating profit is now expected to grow between 9% and 12%, reflecting the sales growth outlook and continued investments in current and future growth drivers.

This includes the continued rollout of USEMPIC and Rebelsis, the launch of VGOVI and associated market development investments. Furthermore, additional resources are being allocated to R&D pipeline activities, such as the many phase three clinical trial activities. Given the current exchange rates, most notably a strengthening of the U. S. dollar, we expect a less negative currency impact for the full year compared to three months ago. Consequently, our reported sales and operating profit growth is now expected to be 4 and 5 percent lower than at constant exchange rates, respectively.

For 2021, financial items are now expected to be a gain of around 0.6 billion Danish krona, mainly reflecting gains associated with foreign exchange heading contracts.

Capital expenditure is still expected to be around 7.5 billion Danish krona in 2021. Lastly, free cash flow is increased by 2 billion Danish krona and now expected to be between 39 and 44 billion Danish krona. That covers the updated outlook for 2021. Now back to you, Lars, for final remarks.

Thank you, Karsten. Please turn to slide 18. Firstly, we are proud of our progress within purpose and sustainability with the introduction of a concrete gender diversity target to continue to build an inclusive culture with equal opportunities in NOVO NORDISK. We are also pleased with the sales growth in the first six months of 2021. Sales growth was driven by all geographical areas within international operations, as well as North America operations, and by all therapy areas, in particular our portfolio of GLP-1 treatments.

The strong financial performance in the first six months of 2021 and the initial substantial demand for VGOVI has enabled us to raise our outlook range for the full year. We reached an important milestone with approval and very fast launch of VGOVI in the U. S. with encouraging initial feedback from both patients and prescribers.

Finally, the license agreement with HeartSeat and the acquisition of Proteinus ATTR amyloidosis program is fully aligned with our ambition within cardiovascular disease. We are now ready for the Q&A, where I kindly ask you to limit yourself to maximum of two questions. Operator, we are now ready to take the first questions.

Thank you, Emmanuel. So I'll hand over to Doc the questions on how we see the split of the initial scripts on WGOVI, whether it's based on commercial access or its support programs. And maybe, Doug, you can talk a bit to how we are building access with the caveat that we're not at this call going in and giving guidance on access or the like when it comes to 2022.

So it's a bit about how we are progressing as we speak. So over to you, Doug.

Yeah, thank you, Lars, and thank you, Emmanuel, for the question. So for your first question, I would say it's roughly 50 in terms of where we're seeing coverage today and where we need to assist as an organization. Secondly, to your question on coverage, I think that we've been pleased initially with the work that the team has done, the receptivity from major PBMs as well as local health plans and employers. As I stated in my opening, two major PBMs did unlock the blocking of WAGOVI early on, almost at launch, so that's a promising sign. And I think the receptivity and the feedback from the clinical conversations has been extremely strong.

We have communicated that we believe that we'd like to see Saxenda-like access in 2022 moving on, and I'd say these early indicators are a good sign that we're well on our way.

Thank you, Doug, and thank you, Emmanuel. And the next set of questions, please.

Thank you, Matthew. So, two questions. One on Rebelsos prescription and how do we see the revenue per script. I think that looks okay, but Carsten can call that. And also, Carsten, you can cover the guidance that we are keeping intact. You can say the ratio between top line and bottom line.

Yeah, Matthew, thanks for these questions. So first of all, as to Rebelsis value prescript in the U. S. , there are basically very limited changes to what we were reporting for the first quarter. We are now at the tail end of some of the initial launch co-pay programs. We saw them run out here in the middle of the second quarter. So that's pretty much the only change vis-a-vis Rebelsis value prescript. So we have a competitive co program vis the oil competition down to per script and we have a GL2 like pricing from there So pretty much nothing new from Q1 In terms of investments with the increased sales outlook then of course that something that we carefully consider And I would put it in rather simple buckets.

So first of all, we continue to invest in our GLF-1 portfolio between Rebelsis and Osempic, Both in the U. S. , but also on a global basis. Then secondly, our obesity franchise with the market development required clearly is a focus area of investments on a global scale. This is a market that we have to build on our own. So clearly a lot of investments going into both building internal capabilities, but also working a lot on market development at large.

Thirdly, we invest in specific emerging markets based on growth opportunities and portfolio in those markets. And then finally, I would say, as I've been commenting on before, clearly we have a strategy to increase our R&D to sales ratio gradually over time, thereby increasing our old R&D pipeline and diversifying our R&D pipeline. And that is exactly what you also see in the patient numbers and the portfolio that Martin was talking to.

Thank you, Kastner. Thank you, Matthew. Next set of questions, please.

Thank you very much. So first, Camilla, if you can talk to a bit whether we have a preference for one or the other, Rebelsos versus Resinthic, in terms of driving growth.

And then, Doc, can talk to what we see in terms of obesity market growth in the U. S. Yeah, thank you, Lance. So since we had the approval of Rebelsos, it has all has long been our strategy to expand into the OAD market. And from the Pioneer Program, we saw that Rebelsos is the most efficacious OAD. So our plans and strategies are to expand the use of DLP1, being in the injectable segment and being in the OAD segment, where we historically have never been present. So that's basically the strategy that we've been following and that we are executing on.

Thank you, Camilla. That's very clear, and I think we've seen some good success. So, Doug, what can you say about your expectations to obesity market growth in the U. S.?

Thanks. I appreciate the question. So, what I would say is, as I said in my opening comment, that we did see in the second quarter Sexenda coming back, and then additionally and importantly, Certainly, Wagovi adding to the growth of the category. And importantly, we saw within that over 60% of that coming from naive patients. So the expectation is that Wagovi will continue to add to the class and its growth.

Thanks, Doug. And when we compare to IO, we can see that there's a very, very nice uptick in the obesity market in IO. And obviously, we are not even close to getting Wagovi on the market there. So I think it's a very strong sign that 44% growth in IEO is a sign that the obesity market is back, and you could say that it's maybe coming back even stronger because during a lockdown, many people have developed an even larger need for obesity medicines. So we're quite confident and bold on the future growth of the obesity market globally.

Thank you, Vimal. Next set of questions, please.

Thank you, Steve. So, two questions on WIGOVI. So, the first one to kind of breath or death in terms of the prescriber universe, and then whether there are any, say, conditions to how commercial plants can, you know, join the WIGOVI campaign. So, Doug, can you talk to that, please?

Yes, thanks, Steve, for the question. So for us, what's critically important is both breadth, so the number of prescribers, as well as depth, and those prescribers prescribing more. So we're hard at work at both of those, and I'd say it's early days to tell. You know, we're five, six weeks into the launch. What we have been pleased with is that we've seen 8,000 prescriptions in less than a month. If you compare that to sex enda, that took approximately four years to achieve that. So I think that it's a combination of both. As far as your payer question, right now we're seeing the same traditional components on Saxenda in the payer community as we are with Wagovi, but we're working very hard to have this treated like a standard listed product.

We think that's critically important, not only for patients, but the overall success of the brand. So that's where we're hard at work. And again, early indications are good receptivity of the PBMs.

Thank you, Doug. Thank you, Steve. Next set of questions, please.

So thank you, Pete. I will deal with the supply issue because that's not really an underdog's responsibility. So it's clear we have seen a very, very strong uptake of WGOVI. And I think we have to admit it's stronger than what we had planned for. So when you launch, you're obviously in a ramp-up phase for manufacturing. So we have some bottlenecks right now, but you can rest assured that we're working hard to make sure that we can ramp up manufacturing as fast as possible.

And, you know, these are standard, say, manufacturing processes that we know how to handle very well, so we know what needs to be done to get the supply back on track. And as Doug mentioned, our key concern is, of course, to make sure that those who start on treatment can continue on treatment.

On BPP in China, you know, Karsten, you can talk a bit to how it's picked into the guidance, but I can just say that there was recently a consultation meeting in China with the authorities where manufacturers participated. Based on that, we now believe it's less likely that there will be an impact this year. However, if an insulin VPP is implemented, which we believe will eventually happen, it's probably not going to take place before 2022.

And if you put a bit of caveats around it, had it been easy to do, most likely it would be done. So I think I've commented before that the experience that is already in the market is in the small molecule space. And if you want to do a VPP for biologic and not least a life-saving medicine like an insulin, this is not a trivial thing to do to secure both volumes and quality of those volumes.

So for now, we think it's unlikely for this year, and if it happens, it could be next year. So, Karsten, you can talk to how we have baked that into the guidance we have given.

Yeah, absolutely, and thanks for that question, Pete. So, based on what Lars just explained around the status of VPP, that was part of enabling us to narrow the breadth of our guidance range for our top line and lift the floor. But of course, the key driver behind us lifting the oral range was what we have just discussed in terms of our performance within obesity care, both Vigovi and the oral obesity market growth, as well as the acceleration in GLP-1 and the strong biofarm performance in the first half.

Thank you, Kirsten. And since I think this was actually two questions, Martin, very shortly on the status on the outcome trials.

Thanks very much, Pete. Things are going well. We managed to secure recruitment of all free trials on time. In fact, select and flow were a little bit ahead of time, and what we see right now is, despite of COVID-19, really good retention in all trials, so more than 95% of patients still being in trial. We can't really speak to the event rate, but maybe just saying that what we see right now is very close to what we anticipated when initiating the trials.

Thank you, Martin. Good to hear that. It is well on track. Thank you, Pete, for the two questions. And on to the next set of questions, please.

Thank you, Martin. I'll start on the supply. So we have seen here initially that we were out of the start dose, the low dose, but of course manufacturing is running constantly. So yes, we can start new patients, but the initial uptake we have seen is significantly higher than what we had planned for. And it's not, you know, it's quite common that when you launch a new product, you are ramping up manufacturing as you launch, and we're doing that. So we will eventually be able to cover the full demand, but it's not that we cannot start new patients for the rest of the year, so don't need to worry about that. And you're right that, you know, there's a lot of excitement around WIGOBI.

And, Doc, what can you talk to, you know, the type of patients we get in? Obviously, it's early days, but what is your intelligence from the field?

Thanks, Lars. And Martin, thank you for the question. Let me first start by saying, you know, we have a – when we think about an unmet need in the 650 million patients in the world With 100 million patients in the U. S. , they need help, and they've been, in a lot of ways, maybe waiting for a drug like this. So there's certainly a significant patient pool. I would say it's early days. When we look at the patient-level data that we see with Saxenda, typically the patients are aged between 40 and 60 with a BMI of 35 or less with comorbidities. So I think there's a significant unmet need, and now is the right time to unlock the potential.

And who are the main prescribers? Primary, endos, weight loss centers? Yeah, so what we're seeing, and again, this is really based on what we've seen for sex end and anticipate, is that the primary care physician, the interim medicine, nurse practitioners, PAs, that's going to be the bulk of the writers that we're going to see in this space right now. It's less about specialty as comparatively as we would see in say diabetes, but based on what we see in Saxena and what we anticipate is PCP and MPs. Thank you.

Thank you, Doug. Thank you, Marcin. It's clearly exciting times, and I think we've all been talking to that is the first time there's a real solution to the problem being obesity. And I think the sign we see from the market is that that's well understood, and there is a significant demand for this. So we're very encouraged with what we see. Next set of questions, please.

Thank you, Karsten. And I think the first question on U. S. G1 dynamics clearly has a very, very strong performance. I think we have all along been very excited about the OSEMPIC, but, Doug, can you share anything about any change in tactics or anything, or is it just pull through? And then, secondly, I don't know, timing about interchangeability or NOLOG, whether you have an overview of that.

Thanks, Carson, for the question. And what I would say is, if you just remember, we started to phase in our sales reps in mid-February and then got them fully back in the field by May. So there was a component of us re-entering into the market. I would also suggest that smagotide has become a well-known molecule. Ozempic itself is highly recognized.

It's excellent efficacy. If you think back to the numbers of patients in the SUSTAIN program, 80% of them reaching HbA1c of less than 7. And so it's a great product, and I think that we haven't necessarily changed our strategy. We're still deploying what we've communicated as Semer Synergy, which is to be effective and successful with both Ozempic and Robelsus in the category.

And on the second question on interchangeability in the U. S. , I think our perspective is that to a large degree, We already see that the market seen from a manufacturer's point of view is a market that works like an interchangeable market in the way PBMs buy from us. It might not be fully, the benefit of that might not fully be going to the patients, but in terms of the contracting we do, that is largely of an interchangeable nature.

Thank you, Doug, and thank you, Karsten. So we take your next set of questions, please.

Yeah, thank you, Michael. Yes, indeed. NOVO 7 performance is very strong in a rather competitive arena. So, Karsten, can you talk a bit to how we see growth there? And then, Camilla, you can touch upon Rebels' performance in international relations, where I think we've seen a lot of pandemic activity going on.

But first, Karsten. Michael, I fully concur. We were very satisfied with 3% growth in the first half for NOVO 7 after a number of years where the brand has been significantly under competitive pressures. I'd say there are a couple of aspects to it. So first of all, as you know, demand for NOVO 7 is somewhat stochastic in nature, linked to the number of bleeds and surgeries and so on. And we did see some significant events in the second quarter in the U. S. positively impacting U. S. sales.

And on top of that, without having firm data on it, then, of course, with society and healthcare systems opening up, one could speculate that the increased activity levels could lead to increased bleeding episodes requiring NOVO 7 treatments. As to the commercial impact on the brand, then we are not fully through it. There are a set of emerging markets that have yet to launch competition, but to a large extent we are through it in some of the more developed markets.

Thank you, Carsten. And Camilla on Rebelsis performance in IO.

Yeah, so on reversals in IO, we are continuing to see increasing market share performance in key countries, but it is, of course, in the light of COVID-19 that continues to impact, especially EU countries and also Japan. We've launched in 17 countries, and Japan being the country with the biggest potential, has been impacted by multiple states of emergencies, and that, of course, impacts our ability with the sales force to reach our customers. Nevertheless, the underlying parameters such as number of actively prescribing physicians and source of business and also launch optics does look good and encouraging. And as in the U. S. , we also in the rest of the world continue to expand the number of prescribers and, of course, the number of scripts, what we call depth per prescriber as well.

Thank you, Camilla, and thank you, Michael. Next set of questions, please.

Thank you, Sachin. So, you know, we are not going into speculations about 2022 as of yet, but, you know, we have limited amount of, we go with sales in the book so far, Carson, but what can you tell us about what we are seeing without going into guidance on individual brands?

Yes, as I was covering before, then obesity care at large is one of the key drivers for us upping our guidance for the full year, and that is the combination of Vigovi and the overall market growth benefiting Saxenda, both in the U. S. and in international operations. So we go with part of it, but only one segment. So the two main chunks of the upgrade is obesity care and acceleration of our GLP-1 business.

Thank you, Carson. So we take the final set of questions.

So thank you. If I start by giving it a shot on how we see the importance of select, and then Martin, you can cover the second question. So when we have spoken to the obesity opportunity, we have spoken about the importance of mobilizing patients living with obesity, the importance of getting physicians to prescribe, and the importance of getting payers to reimburse. And you can see, you know, based on the initial signs we see here, we do see that patients are mobilized. We do see that physicians are willing to prescribe.

And based on what Doug mentioned, in terms of two national payers having removed a block, we also see that there's a willingness to pay for it. So I think we're off to a very exciting start. And it seems like the profile of the product and the market-build activities we have done is resonating well, and I think that's quite encouraging.

Martin, on AM8.

Yeah, very briefly, cagrillion-type between friends to be combined with semaglutide, and we've shared the data showing that with the combination of cagrillion-type and semaglutide, And we can see an approximately 17% weight loss, but in a matter of 20 weeks, and with a safety profile that is comparable to that of semaglutide in monotherapy. Obviously, that has made us very excited, and we intend to initiate phase 3 already next year.

I think the question was more about the positioning of the combination product towards semaglutide, and maybe that's too early to speculate on.

Thank you, Martin. And let's, since we are on a good roll, take one final question.

Thank you, K. U. S. So on WGO, WX, U. S. , you know, we have plans to get European approval by turn of the year. So it's a bit early for us to start speculating on how it might look like. I think it's a quite dynamic position that, you know, in IO, it's typically out-of-pocket paid, whereas in the U. S. it's reimbursement.

And clearly now in the U. S. , it seems like we are now hitting a weight loss profile where it becomes meaningful for payers to reimburse. And I can only, you know, project that individuals who are paying out of pocket today, when they see the profile of Wigobi at a similar pricing, there is a very robust demand for that also outside of the U. S. So again, encouraging prospects based on the profile of the product and the price point we have set. But you raised a good point in terms of capital allocation in the context of deals. So, Karsten, can you talk a bit to that? You have introduced debt financing in NOVO NORDISK at a 0% coupon, which obviously is an attractive rate.

So what can you tell about that?

Thank you, Lars. Thank you, Kijur. So first of all, it's interesting how to finance a company. It was 40 years ago that we actually listed on the New York Stock Exchange at a PE at around 15, and now we are issuing bonds at a zero coupon this year. So just to wind back, we basically have three core pieces to our toolbox in terms of capital allocations. So we have the cash we have on our balance sheet, then we have adjustments to our share buyback, and then we have depth leverage. Of course, there are additional means, but that's kind of three core tools we use. And what you saw last year, just to baseline us in that, is that the COVID-year transaction we did last year with an upfront of $725 million, that we're actually able to finance through our financial reserves or the cash-on balance sheet without impacting our share buyback or raising debts.

Whereas the MSV acquisition at $1.8 billion in reality is mainly linked and financed from the bond issues we just did. So we are very focused on continuing to provide an attractive capital return to our shareholders, and thereby continuing our track record on increasing dividends for now 25 years, but also continuing our share buyback program. So, of course, it depends on the exact deal and so on, how we finance it between the three means and the magnitude of the deal.

Thank you, Karsten.