NVO - Novo Nordisk

[John Hjorth]

I'm mentally giving in - flat down, on the floor - chicken, as I am [for now how many years, after averaging down aggressively in the late part of 2016?]. No way, I'm going to reinvest the NVO dividend - to receive within a few days, in NVO, based on recent US pharma circumstances.

[Cigarbutt]

NVO continues to have long-term economic moat, will continue to adapt to an evolving regulatory landscape and continues to score occasional marginal wins against competitors, including a recent borderline advantage announcement against Januvia from Merck:

https://www.novonordisk.com/content/Denmark/HQ/www-novonordisk-com/en_gb/home/media/news-details.2239423.html

If that's sufficient, just skip the next section which deals with reversion to the mean forces and potential pricing pressures in the US.

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Here's a link which is a discussion bringing little granular or factual analysis but which shows the perverse effects of the PBMs and how those effects are integrated in a failed model:

https://lt3000.blogspot.com/2019/03/the-great-bribe-distributor-us-drug.html

 

Here's a link which, if time is available, refers to many other interesting publications (with some info on NVO) supporting the author's underlying assumptions:

https://www.theatlantic.com/health/archive/2019/03/drug-prices-high-cost-research-and-development/585253/

 

A few comments:

-The author, Ezekiel J. Emanuel, was the architect behind the ACA and the publisher is not exactly conservative but IMO the data and analysis contained help to gauge the pricing pressures that will occur, pressures of which the speed of application will vary depending on the extent of the movement of the political pendulum that may occur from time to time.

-There are various assumptions that can be criticized (timing of R&D versus actual time when drugs reach market,  a lot of R&D failing to result in a marketable product, conservative cost of capital assumptions) but many assumptions are actually conservative and concur with what I've seen in the pharma sector in the last 25 years: growing "abnormal" profits with growing marketing budgets in a decreasingly competitive and non-transparent market and, especially, an overall decreasing marginal true health value return on R&D investments (this is a topic for another discussion and this will eventually change but we've been on this plateau for quite a while now).

-Personal opinion: the industry is run by very intelligent people and this process has been going on for such a long time but it seems to me that many ingredients are being assembled (convincing data, intelligent analysis, awareness that there is a problem, true sustainability issues with healthcare costs) that could result in significant actions in the next few years that could hurt profitability of players like NVO. Of course, they could come out of the restructuring process even stronger.

 

 

[DooDiligence]

NASH collaboration.

 

Pretty big addressable market.

 

https://www.businesswire.com/news/home/20190412005104/en/Gilead-Sciences-Novo-Nordisk-Announce-Intent-Initiate

[Spekulatius]

NASH collaboration.

 

Pretty big addressable market.

 

https://www.businesswire.com/news/home/20190412005104/en/Gilead-Sciences-Novo-Nordisk-Announce-Intent-Initiate

Doesn‘t matter. Health care and Pharma is getting Trump‘ed and Demo‘lished right now.

[Cigarbutt]

^The 4 pathways where drugs are targeted to work:

-oxidative "stress"

-inflammation

-scar tissue

-the gut

 

I think the real breakthrough though will come from pills that inhibit the biceps muscle (muscle responsible for hand to mouth movement) but results at this level have, so far, been disappointing:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4266620/

 

If evolutionary forces continue to go unchecked, the market will be HUGE.

 

[DooDiligence]

^The 4 pathways where drugs are targeted to work:

-oxidative "stress"

-inflammation

-scar tissue

-the gut

 

I think the real breakthrough though will come from pills that inhibit the biceps muscle (muscle responsible for hand to mouth movement) but results at this level have, so far, been disappointing:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4266620/

 

If evolutionary forces continue to go unchecked, the market will be HUGE.

 

Although I am patient, I am thankfully not a patient.

[DooDiligence]

Yay!

 

https://www.globenewswire.com/news-release/2019/04/24/1809011/0/en/Novo-Nordisk-A-S-Reduction-of-the-share-capital.html

[John Hjorth]

Jeff,

 

Somehow, - I suppose - this is [perhaps] a "Danish thingy".

 

Here in Denmark, shares bought back are not by some [more or less] automatic mechanism, also retired. [Meaning : The company can at any time sell them in the market again, if it wants to, unless the shares are retired by a decision.]

 

It's so cumbersome here in Denmark, that a listed company has to do changes in share capital by EGMs or AGMs [depending on the specific phrasing of the Articles of Association for each company] as a change to the Articles of Association.

 

So, I suppose, Novo Nordisk buys back B-shares like crazy just about every day the market is open, and typically a few times a year [typically a couple] it retires A shares [after buyback of A shares from Novo Holdings A/S] and B-shares in connection with the AGM. Changes to the Articles of Association requires a shareholders meeting.

 

Here is a link to the Articles of Association for Novo Nordisk A/S.

[DooDiligence]

Jeff,

 

Somehow, - I suppose - this is [perhaps] a "Danish thingy".

 

Here in Denmark, shares bought back are not by some [more or less] automatic mechanism, also retired. [Meaning : The company can at any time sell them in the market again, if it wants to, unless the shares are retired by a decision.]

 

It's so cumbersome here in Denmark, that a listed company has to do changes in share capital by EGMs or AGMs [depending on the specific phrasing of the Articles of Association for each company] as a change to the Articles of Association.

 

So, I suppose, Novo Nordisk buys back B-shares like crazy just about every day the market is open, and typically a few times a year [typically a couple] it retires A shares [after buyback of A shares from Novo Holdings A/S] and B-shares in connection with the AGM. Changes to the Articles of Association requires a shareholders meeting.

 

Here is a link to the Articles of Association for Novo Nordisk A/S.

 

Thanks.

 

A bit confusing but I get it.

 

If history is any guide, these shares will never be returned to the market.

 

I'm hoping that in another 10 years they'll have bought back another 500m shares.

 

Danes are wonderful managers / innovators  :)

[John Hjorth]

Yes, Jeff,

 

You can get a firm perception of the whole thing by reading the Resolutions from the Annual General Meeting of Novo Nordisk A/S, p. 1, lower part & p. 2, upper part.

 

Basically, this is the running administration of the take-over shield of Novo Nordisk A/S related to the buybacks.

[DooDiligence]

Yes, Jeff,

 

You can get a firm perception of the whole thing by reading the Resolutions from the Annual General Meeting of Novo Nordisk A/S, p. 1, lower part & p. 2, upper part.

 

Basically, this is the running administration of the take-over shield of Novo Nordisk A/S related to the buybacks.

 

Thanks, now I grok it in fullness. (See Heinleins "Stranger in a Strange Land" if you don't grok grokking.)

 

This program is a good thing since I'd rather not see them bought out by anyone.

 

I love owning a business with niche focus & a disciplined willingness to shrink equity.

[John Hjorth]

Novo Nordisk A/S - Company Announcement [september 20^th 2019] : Rybelsus® (semaglutide tablets), the first GLP-1 in a tablet approved in the US.

 

To me, this is the most important news from Novo Nordisk A/S for years. This must be great news for the US patients going forward - I simply can't imagine otherwise.

 

- - - o 0 o - - -

 

For the shareholders, perhaps we'll now see another - more positive - growth trajectory for the company going forward the years to come, compared to what has happened the last three years or so.

[Sharad]

Novo Nordisk A/S - Company Announcement [september 20^th 2019] : Rybelsus® (semaglutide tablets), the first GLP-1 in a tablet approved in the US.

 

To me, this is the most important news from Novo Nordisk A/S for years. This must be great news for the US patients going forward - I simply can't imagine otherwise.

 

- - - o 0 o - - -

 

For the shareholders, perhaps we'll now see another - more positive - growth trajectory for the company going forward the years to come, compared to what has happened the last three years or so.

 

 

I agree, John, however, I haven't had an opportunity to read everything on the approval. The muted reaction is a little confusing, so I'd like to understand things further, but I remain a shareholder. In the end, I remain of the belief that the company should find a way to get semaglutide accepted for weight loss, and, if there are no major side effects, work to get FDA approval on an OTC variant of the oral medication.

[Sharad]

An interesting development in the delivery of insulin via the intestine:

 

http://news.mit.edu/2019/orally-deliver-drugs-injected-1007

 

Amazing breakthrough technology that allows oral pills to pass through the stomach unscathed, and then injected via microneedles through the lining of the small intestine without blockage of the GI tract and safe evacuation of the microneedles.

 

"The new capsule represents an important step toward achieving oral delivery of protein drugs, which has been very difficult to do, says David Putnam, a professor of biomedical engineering and chemical and biomolecular engineering at Cornell University.

 

“It’s a compelling paper,” says Putnam, who was not involved in the study. “Delivering proteins is the holy grail of drug delivery. People have been trying to do it for decades.”"

 

This likely brings the world closer to universal delivery of insulin and other active ingredient bio-pharmaceuticals via oral pills.

 

[DooDiligence]

An interesting development in the delivery of insulin via the intestine:

 

http://news.mit.edu/2019/orally-deliver-drugs-injected-1007

 

Amazing breakthrough technology that allows oral pills to pass through the stomach unscathed, and then injected via microneedles through the lining of the small intestine without blockage of the GI tract and safe evacuation of the microneedles.

 

"The new capsule represents an important step toward achieving oral delivery of protein drugs, which has been very difficult to do, says David Putnam, a professor of biomedical engineering and chemical and biomolecular engineering at Cornell University.

 

“It’s a compelling paper,” says Putnam, who was not involved in the study. “Delivering proteins is the holy grail of drug delivery. People have been trying to do it for decades.”"

 

This likely brings the world closer to universal delivery of insulin and other active ingredient bio-pharmaceuticals via oral pills.

 

Nice find, thanks.

[John Hjorth]

Morningstar - Global News Select - Provided by Dow Jones  [October 1^st 2019] : New Sanofi CEO Aims to Prioritize Investment on Winnable Areas.

 

Personally, I speculate this is about a new strategy for capital allocation at Sanofi, which here involves exactly diabetes, while that is not mentioned specifically. I took a look at Sanofi a few years ago [2015 or 2016, I think], and I have never looked back again. Lantus was Sanofi's blockbuster in diabetes, competing with Ozempic.

 

There is no way to compete with Eli Lilly & Co. and Novo Nordisk A/S, if you don't hose a material part of the cash flow from your actual commercialized diabetes products back into your diabetes R&D pipeline. Not doing so is to me a preset & slow suicide in this space. It's not like getting hit by a bus, more like getting run over by a slow - very slow - steamroller.

 

Back when I took that look at Sanofi I was also thinking about why Mr. Buffett ditched Berkshire's Sanofi position. Perhaps this [bloat] is the explanation, or a part of it.

[DooDiligence]

Sanofi is officially abandoning diabetes research.

 

https://www.fiercebiotech.com/medtech/sanofi-to-restructure-its-onduo-verily-partnership-alongside-exit-from-diabetes-r-d

 

—-

 

“There can be only two.”

Spoken in the voice of Sean Connery

[Cigarbutt]

I've been reviewing biotechs in the early stages and, by chance today, came across the following:

https://thebullreport.com/this-bioelectric-breakthrough-could-disrupt-the-300-billion-diabetes-market/?utm_campaign=TI&utm_content=&utm_source=Yahoo&utm_medium=CPC&utm_term=

 

Take it from a humble perspective but holders of one of the bipolars (member of the duopoly) can continue to sleep soundly.

 

Recipe: Take a large market, make a story, use complicated terms and affix to -Medx and make the rounds in venture capital circles as money has never flowed so easily. My children sometimes say to me: "OK boomer" even if I'm too young for that and maybe I'm missing the boat here but the early stage biotech world has become... IMHO. Historically, people have never been short on ideas and schemes; what appears to be different this time is the ease with which 'investors' jump on this train.

 

'Mental wounds stop healing

Who and what's to blame

I'm going off the rails on a crazy train'

[DooDiligence]

A not so acquisitive company tucks one in.

 

"Corvidia’s lead drug candidate, ziltivekimab, is being developed as a therapy for reducing the risk of cardiovascular problems in chronic kidney disease patients who have atherosclerotic cardiovascular disease (narrowing of the arteries) and inflammation. The Corvidia drug is an antibody that targets interleukin-6 (IL-6), a protein linked to the cholesterol plaque build-up on the inner walls of the arteries that causes this narrowing. Atherosclerosis patients face a higher risk of a heart attack or other serious problems. Waltham, MA-based Corvidia is currently testing the once-a-month injection in a Phase 2b clinical trial designed to find the best dose to test in Phase 3."

 

https://xconomy.com/boston/2020/06/11/novo-nordisk-strikes-a-725m-deal-for-astrazeneca-spinout-corvidia/

 

Anecdotal: My Mom has been doing dialysis at Fresenius for about 6 months now & has been feeling tons better since starting. No cardiac complications. She has the heart of a lion but no guts, literally (short bowel syndrome after removal due to ulcerative colitis).

 

I'm not intelligent enough to know if this is a good acquisition or not.

I'm simply trusting Mr. Thomsen knows what he's doing.

 

---

 

List of past acquisitions:

 

www.crunchbase.com/search/acquisitions/field/organizations/num_acquisitions/novonordisk

[DooDiligence]

This doesn't seem relevant to Novos' business.

 

www.fiercebiotech.com/biotech/novo-sanofi-vc-units-lead-lava-s-83m-series-c-to-fund-gamma-delta-t-cell-trials

 

Is it just a potential bargaining chip for a piece of Sanofis' diabetes business?

 

Seems like they'd have to fight too many others like JNJ & Sanofi unless the resulting technology would be shared.

 

Or is it just a deal that Novos' VC arm intends to profit from financially without an end use for the product?

[John Hjorth]

Yes, Jeff,

 

It's an investment made by the intermediate holding company situated in the group chart between Novo Nordisk A/S and the Novo Nordisk Foundation called Novo Holdings A/S.

 

Novo Holdings Press Release [september 17^th 2020] : Novo Ventures co-leads USD 83m Series C financing in LAVA Therapeutics. ["Novo Ventures" is the VC arm of Novo Holdings.]

 

Novo Holdings A/S's main & core assets are the shareholdings in Novo Nordisk A/S, Novozymes A/S & Chr. Hansen Holding A/S, where the shareholding in Novo Nordisk A/S by value and cash flow generation [dividends from Novo Nordisk A/S and sales proceeds from sales of A-shares in Novo Nordisk A/S to Novo Nordisk A/S, in sync with B-share buybacks in the market] dwarfs the rest.

 

So, Mr. Thomsen is not involved here. [ : - ) ]

[DooDiligence]

www.fiercepharma.com/drug-delivery/novo-nordisk-tees-up-1-8b-emisphere-purchase-to-snare-oral-drug-delivery-tech

[DooDiligence]

www.princewilliamtimes.com/news/new-virginia-law-capping-insulin-prices-at-50-a-month-goes-into-effect-friday/article_cc1ea210-4a26-11eb-9ca2-dbcea0627c72.html

 

and an interesting follow-on re: drug price negotiations in general,

 

www.specialtypharmacycontinuum.com/Policy/Article/12-20/Medicaid-Moves-To-Gain-Control-Over-Drug-Prices/61173

[Sharad]

Big developments on semaglutide: 15% weight loss compared to 2.4% from a placebo.

 

https://www.nejm.org/doi/full/10.1056/NEJMoa2032183

 

https://www.nytimes.com/2021/02/10/health/obesity-weight-loss-drug-semaglutide.html

[jefke]

Big developments on semaglutide: 15% weight loss compared to 2.4% from a placebo.

 

https://www.nejm.org/doi/full/10.1056/NEJMoa2032183

 

https://www.nytimes.com/2021/02/10/health/obesity-weight-loss-drug-semaglutide.html

 

Good business model

 

But when the trial ended and she no longer received the drug, the weight started coming back. “I was so sad,” she said. She is eager to resume taking the drug once it’s available.