Novo Powers Ahead
This morning Novo Nordisk (NYSE:NVO) announced results for the first-half of 2007 and the results reinforced Novo’s position as a leader in diabetes care. In the North America sales increased 31% with the company now holding 42% of the total insulin market and 29% of the modern insulin market, both measured by volume. With the sales force expansion from 1,200 to 1,900 people now complete the company is well positioned to extend their leadership position.
About the only negative was the progress of Liraglutide, the company’s GLP-1 analogue, which in typical Novo fashion is taking forever to get to the FDA. Although study data for the drug looks promising the company is in danger of launching of the product just as the long-acting version of Byetta is coming to market. This situation reminds Diabetic Investor of how Novo let Sanofi-Aventis (NYSE:SNY) gain the upper-hand in the long-acting insulin market while they took their time getting Levemir® on the market.
Still it’s difficult to find fault with the company’s strategy overall. Novo may not be the quickest company to bring new products to market and this go slow approach has not yet hurt the company. Diabetic Investor also sees the recent introduction of new insulin pens by competitors benefiting the company as it is widely acknowledged Novo has the best insulin delivery systems on the market. As more physicians become comfortable with insulin therapy and the use of pens to deliver the insulin, its likely Novo will garner a high percentage of prescriptions.
Novo also has another strategic advantage as they are truly a global diabetes company and will surly benefit from the worldwide diabetes epidemic. Markets outside the US may not carry the same margins however these markets are growing as fast, if not faster, than the US. This global reach and experience gives the company an edge.
All in all Novo is one fine company worthy of investor’s interest.