(Reuters) - Danish drugmaker Novo Nordisk, the world's biggest insulin maker, expects to more than double its annual
revenue within a decade, its deputy chief executive Kaare Schultz told Reuters.
More than half a billion
people are expected to be living with diabetes by 2035, up from 382 million
now, according to the International Diabetes Federation. Most sufferers have
type 2 diabetes - linked to obesity and lack of exercise - and the epidemic is
spreading as more people in the developing world adopt Western, urban
lifestyles.
Schultz, 53, was promoted to Novo Nordisk deputy chief executive in January from his previous role as head of sales
and production. He is in the running to succeed 59-year-old Chief Executive
Lars Rebien Sorensen, whose contract ends in 2019.
"Today we handle more
than 20 million patients. In 10 years, hopefully will treat about 40 million
patients," Schultz said in an interview at the firm's new 1 billion crown
($182 million) headquarters in Bagsvaerd on the outskirts of Copenhagen, a
spiral complex inspired by the shape of an insulin molecule.
"We expect to continue to
increase (revenue) by around 10 percent per year over the next 10 to 20
years," he said.
If Schultz is right then 2014,
which could be a weak year for Novo Nordisk after it lost two contracts to
supply a U.S. pharmacy group, would only be a blip. Its sales growth of 7
percent year-on-year in local currency terms in the first quarter marked the
first time the company had failed to post double-digit growth in 48 quarters.
Schultz said Novo Nordisk's
revenue could grow even faster than 10 percent a year if it won U.S. approval
of its long-lasting insulin drug Tresiba and liraglutide for the treatment of
obesity.
"If we get both
approvals, we will be able to increase our global share of the diabetes
market," he said.
A U.S. Food and Drug
Administration advisory panel is due to give a preliminary recommendation on
liraglutide in September, while Novo Nordisk is still carrying out studies on
Tresiba.
With an annual growth rate of
10 percent, the company, which had a turnover last year of 83.6 billion crowns
compared with 78 billion crowns in 2012, would post revenue of well above 200
billion crowns in 2024.
Analyst Soren Lontoft from
Sydbank said Novo Nordisk's forecast was realistic.
"It is difficult to
predict the future, but the foundation for 10 percent growth per year is
actually there. In markets where Novo has a good position, such as China, India
and Mexico, the number of diabetics is set to explode in the coming years, and
more will be able to afford treatment," he said.
Schultz, who joined Novo
Nordisk in 1989 as an economist, said he believed diabetes would continue to be
the firm's main area of business and account for around 80 percent of revenue.
"No matter how well we do
in other areas, it's hard to imagine new areas achieving the same growth rate
as the diabetes care market," said the deputy CEO, sporting a blue shirt,
without a tie, and cufflinks bearing Novo Nordisk's Apis bull logo.
DIABETES PILL
Novo Nordisk faces growing competition
in the non-insulin diabetes market but Schultz said its popular so-called GLP-1
product Victoza, which has about 71 percent of the global market for such
drugs, remained the "gold standard".
GLP-1 (Glucagon-like
peptide-1) drugs work by stimulating the release of insulin when blood-sugar
levels become too low.
Schultz played down the threat
from GlaxoSmithKline's newly launched once weekly GLP-1 drug Tanzeum, which is
40 percent cheaper than high-dose Victoza in the United States but does not lower
blood-sugar levels as much, although he viewed Eli Lilly's dulaglutide as a
more serious competitor.
Novo hopes to consolidate its
position by developing a tablet version of such medicines, which are currently
given by injection.
An oral pill version would
mark a step change in therapy by making treatment far more convenient, opening
a major new market. If a GLP-1 pill is to make it to the market in the
current decade, the odds are it will be owned by Novo Nordisk.
Lilly has recently also
expressed interest in oral GLP-1s but Schultz said rivals would struggle to
catch up with Novo which already has a drug, NN9924, in mid-stage trials.
"I think it will be very
difficult for competitors to catch up with us in this regard (oral GLPs),"
said Schultz, who is also a member of the board of famous toymaker LEGO.
Making an oral form of such
drugs is far from simple and a key hurdle is to ensure that the medicine is
adequately absorbed in the body.
Novo is also working on an
oral version of insulin but that is at an earlier stage, with a decision about
progressing into Phase II testing to be made in 2015.