United to change diabetes
Reaching across the globe, Novo Nordisk employees organised human blue circles, gathering more than a quarter of a million people to mark the first UN-observed World Diabetes Day on 14 November 2007.
It was a truly magnificent moment and one we are proud to have been part of. Never before have the landmarks of the world been so spectacularly lit up, and never before have so many people been engaged in advocacy to protect current and future generations against one of the biggest public health threats that mankind has ever faced.
The power of the possible
To defeat diabetes – that is our aspiration and our business.At Novo Nordisk we believe in the power of the possible. Our vision is one of civilisation based on sustainability, partnership and respect for the individual. Sustainability is a powerful, unifying force. We believe it is possible to be commercially astute and socially aware. To accelerate growth and minimise environmental impacts. To earn competitive returns and contribute to economic prosperity for society. These are the cornerstones of the Triple Bottom Line principle upon which we build our business. These are the messages we convey when we call upon governments to make the frameworks that enable us and our partners to contribute to creating wealth for the benefit of all.
Results
For Novo Nordisk, the year 2007 was yet another year with remarkable progress. Our financial results and the growth of our business were achieved despite an increasingly competitive environment and adverse currency exchange rates. This is underpinned by a solid track record on measures of economic, environmental and social impact. This was also rewarded: throughout the year, our shareholders have seen a significant appreciation of their investment in our company.
In this report we highlight the assets that will help us sustain and build leadership in the business areas we focus on. Innovation of new or improved therapies is the foundation for the future of the pharmaceutical industry. In 2007, we invested more than ever in research and development, and we saw progress in a number of areas which are crucial to the future of our company. Throughout the world we have increasedour presence and thereby our ‘share of voice’ in an increasingly competitive business environment and with that we have achieved greater acceptance of our products. Our manufacturing operations
continue to improve productivity, allowing us to invest more in sales and marketing for the short term – and in research and development for the long term. And, most importantly, people at Novo Nordisk demonstrate that we’ve got what it takes to win: accountability, ambition, responsibility, engagement, openness and readiness for change.
Three themes have been the key drivers of success and will remain on our agenda: globalisation, innovation and leadership.
Globalisation
Demands for proper healthcare are on the rise throughout the world, and we must strengthen our global presence to stay competitive and expand the market for our products and services. Today, the number of Novo Nordisk employees outside Denmark exceeds that of our Danish organisation.
The expansion of our global supply chain continued to accelerate. In 2007, with the largest investment of any pharmaceutical company in Latin America, we inaugurated our insulin filling plant in Montes Claros, Brazil. We also doubled the insulin filling capacity of our manufacturing facility in Clayton, North Carolina, to meet the growing demand for our products in the US.
A significant expansion of our US sales and marketing organisation was completed in the first half of the year, aimed at supporting the continued roll-out of Levemir® and the rest of our portfolio of modern insulins.
In China we entered into a long-term strategic collaboration with the Chinese Academy of Sciences, which significantly expands our network of contacts with far-reaching implications for our research and development activities there.
Sourcing of talent and of services are key engines of globalisation. In addition to the traditional internationalisation of research and development as well as manufacturing we are now also seeing encouraging results from sourcing services.
Innovation
Driving organisational development and optimisation of cross-organisational interfaces is critical to ensuring the successful execution of global clinical trial programmes such as the suite of phase 3 studies of liraglutide, Novo Nordisk’s furthest advanced new product candidate in the diabetes care business. The successful completion of the studies gives us reason to believe that this new class of diabetes therapy represents a potential, valuable treatment option for people with type 2 diabetes, and perhaps even prevention if applied for obesity-related health risks. This would represent a significant advance for diabetes care – and the future of Novo Nordisk.
We saw unprecedented progress in our pipeline in 2007: next generation modern insulin and NovoSeven® analogues, new indications for Norditropin®, lower-dose hormone replacement therapies as well as our portfolio of early-stage candidates for treatment of inflammation.
Some of this progress can be ascribed to the fact that we have strengthened the project-centric organisation in our clinical development. We have improved cross-project alignment, systems of performance management, compensation packages and talent development programmes for all groups of employees.
Regrettably, Novo Nordisk also experienced some setbacks in research and development in 2007. We began the year with a great disappointment when our final studies investigating rFVIIa for the treatment of intracerebral haemorrhage failed to show sufficient benefits for the patients. This was despite the fact that the trials were conducted at impressive speed, and with the highest level of professionalism. A hope for stroke patients faded away.
We also decided to stop our research and development efforts to develop small-molecule oral therapies for type 2 diabetes – after many years of concerted efforts.
And finally, in January 2008, we decided to discontinue the development of the AERx® inhaled insulin system and focus our research and development on a new generation of systems for administering long acting insulin and GLP-1 via inhalation.
Discontinuing a research programme does not mean giving up hope that improved product offerings can be achieved. But if ambitions are high you have to accept that not all objectives will be met – that is how it is when trying to accomplish difficult tasks. And we will continue to invest in pursuing every viable route to offer improved benefits for the people whose healthcare needs we serve.
Leadership
With aspiration of leadership follows the obligation to speak out on behalf of your constituencies and seek influence on the global agenda. In the spring, Novo Nordisk hosted the first Global Changing Diabetes Leadership Forum in New York. This event kicked off a range of activities, and we are pleased to see that our initiative has resonated well with health policy-makers and others with the power to influence the
agenda towards a more sustainable future.
In parallel, we advanced our initiatives to face up to the climate change challenge and pursue our ambitious strategy to reduce the company’s CO2 emissions over a 10-year period. Here, a milestone was a unique partnership with our energy supplier in Denmark, where 85% of our CO2 emissions occur, to convert energy savings to increased supplies of renewable energy. It is our ambition that this too may serve as inspiration for others. We have been active advocates on the international scene, sharing our experience and supporting coalitions urging immediate and concerted action.
2007 was also the fifth anniversary of the World Diabetes Foundation, an initiative founded and funded by Novo Nordisk to improve access to and knowledge about diabetes care in the developing countries. Already now the Foundation is supporting 138 projects across all continents with encouraging results. We are humbled by its potential impact, and are hence seeking extension of funding from our shareholders for a new, 10-year period.
Challenges
At the beginning of 2008, we can confidently say that Novo Nordisk is well-positioned to meet the challenges posed by our competitive environment and societal developments. Diabetes care is one of the segments of the pharmaceutical industry with the highest expected future growth rates. This makes it attractive to continue to invest in staying ahead in this market.
It is critical that Novo Nordisk continues to deliver on promises and that we are successful in our must-win battles: First, to maintain leadership in diabetes care by expanding the use of our modern insulins, ensuring leadership within GLP-1 and progressing the next generation of modern insulins through development. Second, expanding our offerings in biopharmaceuticals by developing the next-generation successors to NovoSeven® and creating possibilities for change in treating haemophilia, growth deficiency, hormone replacement and inflammation.
Thanks
We are set on one goal: improving value for patients. Looking back at our achievements in 2007, we believe that we are on the right track. We thank our customers, shareholders and partners for their loyalty and support throughout the year. We also believe that our customers, shareholders and partners share with us a great thanks to our employees for their efforts, their creativity and their dedication that makes Novo Nordisk a very special company.
