Boringly Predictable
Having listened to conference calls and earnings announcement for almost 20 years, Diabetic Investor has become accustomed to the boring nature of these events. While there is a rare occasion when a call is actually newsworthy or fun to listen too, these events typically are about as exciting as watching the snow fall. Today’s call by Novo Nordisk (NYSE:NVO) definitely followed this pattern as try as they might to be exciting; exciting is not part of Novo’s DNA.
The company which continues to hold onto its dominance in the insulin market and is gaining traction in the expanding GLP-1 market, continues to believe its pipeline will is so good that it will magically help all the other issues facing the company disappear. That generic insulin will not impact the market or that payors will once again pay premium prices. Diabetic Investor isn’t sure what their drinking at the company headquarters in Denmark but if Novo was headquartered in the US we’d be inclined to say they are drinking the corporate kool aid.
Now don’t get us wrong given the way things are today Diabetic Investor isn’t upset that Novo’s results have become incredibly predictable. Frankly we’d even go as far and state that this boring predictability is also quite comforting as it shows not every company in the wacky world of diabetes is intent on screwing things up. This is not to say that Novo does not have issues rather that they less issues than almost everyone else.
Looking at the results as a whole it’s hard to find any serious causes for concern. The company still owns the market for modern insulin’s, Victoza® is growing nicely and the pipeline while not as exciting as the company thinks it is, isn’t all that bad either. The problem for Novo is not what they have it’s the markets they play in. As we have noted repeatedly Novo is a company who is used to getting premium prices for their product line, this situation no longer exists. The key for the company is how they deal with this new pricing environment, the coming threat of generic insulin and the impact Bydureon will have in the expanding GLP-1 market.
Oscar Wilde may have said; “Consistency is the last refuge of the unimaginative” but he never experienced the wacky world of diabetes. Novo’s may not be the most exciting company in the business but they do know diabetes and right now that’s not a bad thing.
