Novo reported strong Q2 results on the back of robust momentum in the GLP-1 portfolio, including the successful launch of obesity drug (Wegovy). Importantly, the group again upgraded its 2021 guidance. While the progress of its initiatives in diabetes and related areas is proceeding as planned, the quest for growth drivers beyond diabetes is still on. Hence, despite all the good work, our recommendation is likely to remain cautious, especially given the Danish giant’s expensive valuation.
Companies: Novo Nordisk (NOVO-B:CPH)Novo Nordisk A/S Class B (NOVO.B:CSE)
2021 started on a high as Novo reported robust growth, despite ‘tough comps’, i.e. forward buying-driven Q1 20. Moreover, as management expects this momentum to be maintained, the 2021 outlook has been revised upwards. While diabetes-heavy Novo is doing well via newer innovations in the GLP-1 area and also targeting diabetes-related areas, it lacks major growth catalysts. Hence, even after estimates being revised upwards, the upside is likely to be limited.
Despite the pandemic, Novo Nordisk finished 2020 on a high and reported a healthy operating performance. This was a function of the sustained uptake for GLP-1, despite varying (and persistent) issues elsewhere. Management stuck to its extravagant shareholder reward programme.
However, it is high time that newer non-diabetes growth drivers are identified and pursued. Luckily, the group has the balance-sheet cushion to pursue big growth ambitions. Until new growth avenues are identified, sadly, t
Companies: Novo Nordisk A/S Class B
Unlike the Swiss peers, Novo Nordisk reported healthy Q3 sales and operating profit growth, which also resulted in a 2020 guidance upgrade. Product-wise, this outperformance was driven by GLP-1, which more than offset the sustained erosion in insulins. Geographically, IO led from the front (across various categories) and helped compensate for sluggishness in the all-important US market. Overall, while business-performance-wise, Novo continues to do well, a further re-rating will have to await ma
Novo Nordisk has upgraded is 2020 performance guidance on the back of less severe-than-expected de-stocking. Other than diabetic patients’ high vulnerability to COVID-19 warranting maintained stocking, the re-emerging threat of a second-wave of infections (especially in the US) could have been another contributing factor.
However, given that diabetes pricing is expected to remain a tricky matter, we believe that any re-rating for Novo is dependent on its ability to reduce dependence on the lega
After an impressive Q1, driven by COVID-19-induced stocking, growth fizzled out in Q2. GLP-1 offerings continue to do well, but headwinds in insulins and the lack of major non-diabetes growth drivers have again emerged as major roadblocks. Despite industry-leading return metrics, the group lacks major growth assets/catalysts and, hence, our cautious recommendation should be maintained.
Novo started 2020 on an excellent note, with Q1 CER sales growth of 14%. This was a function of the sustained uptick of GLP-1 and COVID-19-induced panic buying across segments. So far there have been no major manufacturing and/or supply chain effects of COVID-19, but management guides for delays in early-stage trials. While GLP-1 remains Novo’s key value proposition, lack of medium-term growth drivers should result in the limited upside being maintained.
2019 ended on a steady note for Novo Nordisk. While Ozempic continues to do well, the addition of Rybelsus should further solidify the group’s non-insulin offerings. However, insulins – still c.46% of sales – continue to be a pain-point, especially in the US. Overall, there are no major growth drivers in the non-diabetes areas, which could limit the group’s ability to withstand another round of pricing-related uncertainty with US elections due later this year.
With the ongoing price erosion of its older generation insulin portfolio (in the US), Novo Nordisk sees new growth avenues in GLP-1 products, new generation insulins, and new, but, diabetes-related therapeutic areas – cardiovascular, kidney, obesity and retinopathy. Moreover, International Operations are guided to be a major fulcrum of growth. While strategically these targets have been set in the right direction, realisation of these targets may test the market’s patience.
The Danish diabetes giant had a good Q3 – witnessing 6% CER sales growth. Ozempic attained blockbuster status, while Novo Nordisk’s much-awaited oral semaglutide (Rybelsus) successfully secured an approval. Although (pricing) erosion of the group’s insulin portfolio has continued.
Novo Nordisk’s Rybelsus becomes the first oral Semaglutide (GLP-1) drug to enter the non-insulin diabetes drug market. With three different technologies and close to 15 drugs in the market, the competition is fierce. Fortunately, Rybelsus steers past competitors in many key parameters.
Solid momentum of the new drugs, Ozempic and Saxenda, helped Novo Nordisk achieve another healthy quarterly performance, while the insulin woes only furthered. The Biopharmaceuticals clocked growth too, but more due to one-time benefits. Guidance for the year, in effect, was upgraded. Approval of oral semaglutide remains the next biggest catalyst, in addition to any corporate action that the company has been considering for a long time.
Novo Nordisk delivered better-than-expected results in Q1 19, both at the top-line as well as bottom-line. However, some one-offs had a role to play in this. The profit beat was, to a large extent, driven by a reversal of inventory write-down, although completion of some key trials also boosted the margins. We continue to expect the diabetes market to get tougher to operate in and the FDA verdict on oral Semaglutide to be the next big trigger for Novo Nordisk.
Novo Nordisk’s Q3 top-line numbers are healthy and met expectations but profitability fell short. With a local currency (LC) growth of 5% and a negative FX impact of 1%, sales came in at DKK27.76bn. NB All sales growth numbers in LC unless specified otherwise. Growth was solely driven by diabetes and obesity (+6%) sales of DKK23.37bn, making up for the flat performance of the biopharma business to DKK4.40bn. There was no respite for insulins (-2%) during the quarter, with the pressure in the US
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Yourgene has experienced strong demand for its Covid-19 tests, which propelled H1’22 revenues to £17.5m, ahead of the >£15.0m indicated at the AGM last month. This is more than double the revenues booked in H1’21 and close to the whole of FY21. Both Genomic Services and Genomic Technologies grew strongly in the period, with Covid-related revenues now acting as much more than a natural hedge in both segments. Despite the ongoing uncertainties and lack of forward visibility around Covid-testing vo
Companies: Yourgene Health Plc
Recruitment resumed the Phase 2a trial of the lead programme hRPC in retinitis pigmentosa (RP) with the treatment of the first UK-patient in Oxford. The protocol gives greater infection control after the safety issue (a possible infection) in June. Five patients were treated up to mid-October and the remaining four could be treated by December 2021. By late March 2022, ReNeuron expects to give an interim update. The full data set should be available around mid-2022. This will enable regulatory d
Companies: ReNeuron Group plc
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
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SkinBioTherapeutics has made significant progress through 2021, and ahead of the launch of its first product, AxisBiotix-Ps on World Psoriasis Day, we provide an overview of the company, its commercial channels and its progress. With the imminent launch of AxisBiotix-Ps, the company is at a significant inflection point, transitioning from a development organisation to a commercial operation. Importantly SkinBioTherapeutics has four further commercial channels in progress behind this lead opportu
Companies: SkinBioTherapeutics Plc
Softline, the global solutions and services provider in digital transformation and cybersecurity, with its headquarters in London, has issued GDRs to the Standard Listing Segment of the Official List, and on the Moscow Exchange. The Group had a turnover of US$1.8bn for the year ended 31 March 2021, employs c.6,000 people globally, and operates in more than 50 countries across emerging markets. Primary proceeds from the Offer are expected to be around US$400m. At the $7.5 offer price. Mkt
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IXICO has announced that one of its clients has put an indefinite halt on a clinical trial for which the company was providing its artificial intelligence medical image analysis. The halt is the result of unexpected preclinical data. IXICO had expected the contract to deliver £0.8m of revenues in FY22E and it represented £3.3m of the £18.8m order book as of the close September 2021. While this news is disappointing, clearly the trial halt has no reflection on the capability of IXICO's technology
Companies: IXICO Plc
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
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H1 EBITDA declined by 45% YoY, albeit this was slightly better than we had anticipated after the pre-close update in August. The beat was cost related (efficiencies/savings). There was a significant gross margin drag though and, while transitory in nature and diminishing in H2, this means further savings need to be realised to hit full year forecasts. This is our view and we retain a good level of confidence in next year’s forecasts. Having de-rated, valuation looks very undemanding now on just
Companies: Venture Life Group Plc
Venture Life has announced its interim results for the six months to June 2021. As previously announced in the August trading statement, revenues were down YoY due to lower HSG sales and sales to the Chinese partner, though revenues are expected to grow subsequently, benefiting from the two recent acquisitions. H1/21 gross margin was impacted by a number of factors including supply chain costs and stockholding costs; however, the company expect margins to improve in H2/21E. Despite the set-backs
CareTech is a specialist social care and educational services provider. This morning, the group has announced an update for the year to 30 September pointing to the fact that results will be in line with market expectations. The net debt position of £259m illustrates a further reduction since the end of H1 (31 March £263.1m) and implying a reduction to 2.7x adjusted EBITDA. During the year, seven new developments have opened, with a further eight properties purchased in H2. The group's freehold
Companies: CareTech Holdings PLC
Positive headline results announcement, showing a statistically significant and clinically meaningful difference between Grass MATA MPL and placebo in hayfever patients in the exploratory field study (G309), is considered a major de-risking event. Not only does it increase the probability of successfully completing the pivotal Phase III study (G306) in the US and EU, but it underpins the broader MATA MPL platform, which includes tree and ragweed pollen, and increases the likelihood of completing
Companies: Allergy Therapeutics plc
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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NetScientific plc (NSCI) an active transatlantic life sciences/healthcare, sustainability and technology investment and commercialisation group announces that its corporate finance and venture capital division EMV Capital Ltd (EMVC) has advised on a £843k fundraise, into Sofant Technologies, the leading 5G and Satcom antenna developer based in Edinburgh. The fundraise consists of £300k direct investment from NetScientific, £343k from private clients and £200k matched funding from the British Bus
Companies: NetScientific plc
Hikma’s H1 20 top-line acceleration was driven by COVID-19-related demand in Injectables and Generics and the economic recovery in Algeria propelled growth in the Branded segment. Combined with a favourable product-mix, the operating margin was up 1.5ppt. In the near term, new launches across segments should provide some respite against the ongoing pricing pressure. Given the company’s thin R&D pipeline and a robust balance sheet, M&A (probably in the biosimilars space) seems on the cards.
Companies: Hikma Pharmaceuticals Plc