Novo Nordisk forecast 5%-9% 2021 sales growth; research head to retire

After 30 years at Novo Nordisk A/S and 20 years as chief scientific officer, Mads Krogsgaard Thomsen is to retire and take the helm at the Danish pharmaceutical group's parent company, the Novo Nordisk Foundation.

The company broke the news of Thomsen's departure as it reported fourth-quarter 2020 results, with sales of 32.14 billion Danish kroner beating Jefferies' estimates at 31.62 billion kroner and consensus estimates of 32.05 billion kroner. Novo Nordisk's 2021 outlook of 5% to 9% sales growth at constant exchange rates was better than feared, according to Jefferies analyst Peter Welford.

Under Thomsen's guidance, the world's oldest maker of insulin pursued research and development into its traditional areas of strength — diabetes, growth hormones and hemophilia — as well as expanding more recently into diseases adjacent to diabetes, notably obesity and cardiovascular disease. With competition intensifying in the U.S. diabetes market and the $10 billion hemophilia market, Bagsværd, Denmark-based Novo Nordisk deployed a range of approaches, from stem cells to novel technologies, in a bid to advance its research. Its most recent move was the $1.35 billion acquisition of Emisphere Technologies Inc. in November 2020, in which it gained technology for an oral formulation of semaglutide.

The 2018 U.S. approval of Roche Holding AG's blockbuster hemophilia treatment Hemlibra, the first new treatment option for the hereditary disease in decades — along with the prospect of pioneering gene therapies — helped to spur Novo Nordisk's diversification into diseases such as sickle cell anemia and non-alcoholic fatty liver disease, or NASH. Still, the development of concizumab — which Thomsen told S&P Global Market Intelligence in a 2017 interview was Novo Nordisk's answer to Hemlibra — continues since a phase 3 trial resumed following a clinical hold. The Danish company has one other hemophilia asset in early-stage development, called Mim8, in addition to six experimental compounds in diabetes; five in obesity; three in growth disorders; and one each in NASH, sickle cell disease and cardiovascular disease.

Analysts also believe neurodegenerative disease may play a greater role in Novo Nordisk's future. The company announced a phase 3a trial of semaglutide on 3,700 people with Alzheimer's disease will start the first half of this year to explore the safety and efficacy of a once-daily oral formulation.

Thomsen's role will be split into two, with Marcus Schindler promoted to chief scientific officer and head of research & early development, while Martin Holst Lange becomes head of development.

"It's his lieutenants moving up," Novo Nordisk CEO Lars Fruergaard Jørgensen told reporters on a conference call. "So there's no change in research strategy, there's no change in M&A strategy because it's really the same people who were doing work."

Thomsen's new role will put him in charge of the $60 billion Novo Nordisk Foundation — the largest endowment fund in the world and the majority owner of Novozymes A/S and Novo Nordisk. It funds medical research and the development of new medicines and is a major shareholder in over 75 companies, spearheading the development of new antibiotics to combat the rise of superbugs, among other therapeutic areas.

As of Feb. 2, US$1 was equivalent to 6.18 Danish kroner.