NVO - Novo Nordisk

[bergman104]

DooDiligence,

 

I have a background in clinical research and medicine, so I'd be happy to try and answer any medical questions related to NVO

 

This is such a complex subject (can you comment on the research by Harvard Stem Cell Institute?)

 

http://hsci.harvard.edu/diabetes-0

 

Novo has stated they MAY begin clinical trials within 5 years

 

https://www.bloomberg.com/news/articles/2016-12-15/stem-cells-may-be-next-frontier-for-diabetes-drugmaker-novo

 

also can you comment on oral insulin

 

http://www.novonordisk.com/about-novo-nordisk/novo-nordisk-in-brief/stories/innovation/insulin-in-a-tablet.html

 

Oral insulin & Novo Nordisk (for the conspiracy theorists)

 

http://www.gurufocus.com/news/466926/something-strange-is-going-on-with-oral-insulin

 

Developing therapies which improve patient adherence through ease of use (less injections & oral insulin) & research into cures are both monumental tasks & predicting who will be the first to market is equally difficult (for me at least.)

 

Political rumblings regarding pricing are presenting buying opportunities & my choice of Novo Nordisk as a winner is largely based on the belief that their focus on metabolic research (I've always liked companies with focus) & their ability to commercialize the results, will make them a winner (whether they're a first mover or not...)

 

Any intelligent thought you can provide either for or against Novo would be greatly appreciated!

 

Couple of impressions on the Harvard website. First let me explain what animal models are and why they are useful.

 

An animal model is exactly what it sounds like. We take an animal and try to mimic human disease in them so that we can study it more easily. Animal models are useful in science because it allows us to do research that would otherwise be unethical on humans. For instance, deleting genes, harmful surgeries, drugs with unknown side effects, or no treatment at all (which would be unethical in a cancer pt for instance). So the fact that there are no animal models of human diabetes makes it more difficult to study because that only leaves human subjects. Figuring out what genes may be involved or what adverse side effects medications can have is much more difficult without first going through an animal model. For example, much of our knowledge on cancer comes from making mice that have specific genes taken out or added in (BRCA, p53, APC, RET, n-MYC etc). Developing animal models takes time. A long time. I was in a lab where they were breeding mice for 3 years to get the ones we wanted. That is just breeding, not studying or doing research on.

 

Stem cells are a slightly different matter. We can study them in a lab but how they will react once they are in a human is another matter entirely. Stem cells by definition can turn into any functional cell in the body. Heart, eye, liver, spleen, bone marrow, etc. The other aspect of stem cells is that they divide into new cells. 1 cell becomes 2 which becomes 4, 8, 16 etc. We need that aspect of them because we constantly need new skin, hair, red blood cells, and many others. The problem comes from 1) figuring out how to make pancreas beta cells (insulin producing cells) and 2) making them stay beta cells without growing too much or into other things for a long period of time. In a lab we can control these cell's environments very closely to make sure they are receiving all the correct signals, but in the human body is another matter entirely. Hormones, chemicals, and other cells are constantly sending new signals to cells in our body causing them to react in different ways. Think of puberty, infections, your heart racing during scary movies. It is difficult to figure out exactly what signals will be sent when. Even worse, over time they can start to divide again become cancer cells that just grow, grow, grow.

 

All of the above is to say that there is some very promising research and medicine being done on diabetes but it is a ways off yet. At least 10-15 years from what professors have mentioned in class, and even that is generous. That doesn't take into account mass usage or governmental regulations or any additional obstacles we could face. Did I answer your question?

 

I will have to get back to you on oral insulin as I am not as versed in that.

[DooDiligence]

DooDiligence,

 

I have a background in clinical research and medicine, so I'd be happy to try and answer any medical questions related to NVO

 

This is such a complex subject (can you comment on the research by Harvard Stem Cell Institute?)

 

http://hsci.harvard.edu/diabetes-0

 

Novo has stated they MAY begin clinical trials within 5 years

 

https://www.bloomberg.com/news/articles/2016-12-15/stem-cells-may-be-next-frontier-for-diabetes-drugmaker-novo

 

also can you comment on oral insulin

 

http://www.novonordisk.com/about-novo-nordisk/novo-nordisk-in-brief/stories/innovation/insulin-in-a-tablet.html

 

Oral insulin & Novo Nordisk (for the conspiracy theorists)

 

http://www.gurufocus.com/news/466926/something-strange-is-going-on-with-oral-insulin

 

Developing therapies which improve patient adherence through ease of use (less injections & oral insulin) & research into cures are both monumental tasks & predicting who will be the first to market is equally difficult (for me at least.)

 

Political rumblings regarding pricing are presenting buying opportunities & my choice of Novo Nordisk as a winner is largely based on the belief that their focus on metabolic research (I've always liked companies with focus) & their ability to commercialize the results, will make them a winner (whether they're a first mover or not...)

 

Any intelligent thought you can provide either for or against Novo would be greatly appreciated!

 

Couple of impressions on the Harvard website. First let me explain what animal models are and why they are useful.

 

An animal model is exactly what it sounds like. We take an animal and try to mimic human disease in them so that we can study it more easily. Animal models are useful in science because it allows us to do research that would otherwise be unethical on humans. For instance, deleting genes, harmful surgeries, drugs with unknown side effects, or no treatment at all (which would be unethical in a cancer pt for instance). So the fact that there are no animal models of human diabetes makes it more difficult to study because that only leaves human subjects. Figuring out what genes may be involved or what adverse side effects medications can have is much more difficult without first going through an animal model. For example, much of our knowledge on cancer comes from making mice that have specific genes taken out or added in (BRCA, p53, APC, RET, n-MYC etc). Developing animal models takes time. A long time. I was in a lab where they were breeding mice for 3 years to get the ones we wanted. That is just breeding, not studying or doing research on.

 

Stem cells are a slightly different matter. We can study them in a lab but how they will react once they are in a human is another matter entirely. Stem cells by definition can turn into any functional cell in the body. Heart, eye, liver, spleen, bone marrow, etc. The other aspect of stem cells is that they divide into new cells. 1 cell becomes 2 which becomes 4, 8, 16 etc. We need that aspect of them because we constantly need new skin, hair, red blood cells, and many others. The problem comes from 1) figuring out how to make pancreas beta cells (insulin producing cells) and 2) making them stay beta cells without growing too much or into other things for a long period of time. In a lab we can control these cell's environments very closely to make sure they are receiving all the correct signals, but in the human body is another matter entirely. Hormones, chemicals, and other cells are constantly sending new signals to cells in our body causing them to react in different ways. Think of puberty, infections, your heart racing during scary movies. It is difficult to figure out exactly what signals will be sent when. Even worse, over time they can start to divide again become cancer cells that just grow, grow, grow.

 

All of the above is to say that there is some very promising research and medicine being done on diabetes but it is a ways off yet. At least 10-15 years from what professors have mentioned in class, and even that is generous. That doesn't take into account mass usage or governmental regulations or any additional obstacles we could face. Did I answer your question?

 

I will have to get back to you on oral insulin as I am not as versed in that.

 

Awesome - thanks!

[John Hjorth]

Thanks alot for sharing your insights with us, Bergman104,

 

Novo Nordisk enters collaboration with University of Oxford on type 2 diabetes and invests GBP 115m in new research centre, ref. what Bergman104 posted about.

 

The full Annual Report 2016 will be out Wednesday. I look forward to it.

[bergman104]

So I did a little research on oral insulin and I understand a bit better now why it is so difficult. Honestly, the website that DooDiligence listed is great. The major difference between insulin and most other medications is that insulin is a protein. This matters in a few different ways. First off, protein hormones are much larger than most medications. Insulin is 32x larger than aspirin for example. This makes it much more difficult to absorb in your gut because it is so large. Secondly, your GI system is designed to digest protein with acid and enzymes. That's basically the job of your stomach and small intestine. I mean when is the last time you've eaten a steak and seen pieces of steak in the toilet the next day (I hope never). In full transparency, I have no idea how you bypass these obstacles, but clearly NVO and others have made some progress.

 

However, the one article I strongly disagree with is "Something strange is going on with oral insulin". There is no way that a company with an oral insulin would pull the plug. The cost of diabetes to our healthcare system is staggering, roughly $825 billion worldwide in 2016. The major problem in treating insulin is that educating patients how much, when and how to give insulin injections is difficult. It hurts, you need to give different amounts to each patient, timing is extremely important, etc. You would be able to command a fortune for an oral insulin product because it is so much easier to take. Further, as diabetes gets worse it causes severe complications like kidney failure, limb amputations, heart problems, and blindness. If you have uncontrolled diabetes you will develop one or more of these. So anything that could make treating these patients and limiting these severe, costly outcomes would be able to command a high price. "Why did Novo kill its oral insulin project despite positive results? Possible answer: Because oral insulin would encourage early insulin adoption even among prediabetics, which would lower the demand for more diabetes medications as the disease worsens." This comment is insane. You would be able to command such a high % of the market and insurance companies would have to pay because it would cost way more money if diabetes progressed. Plus a large majority of patients would probably be on the medication for life.

 

I like NVO because they are focused. I can't tell you how much better their products are from competitors, but I can tell you that diabetes is not going away. Like others, I'd guess that it will probably grow 3-4% worldwide annually. It is just too easy for people to live unhealthily. It seems that without NVO a lot of people would go untreated, which the healthcare system cannot afford. Anyone else have thoughts on how much better NVO is vs competitors?

[DooDiligence]

Interesting writeup...

 

Novo Nordisk: Key Threats In 2017 And Beyond $NVO

 

http://www.seekingalpha.com/article/4038078

 

The author seems credible to me (thorough & although negative, not alarmist.)

 

I aint scared...

 

[John Hjorth]

... Anyone else have thoughts on how much better NVO is vs competitors?

 

bergman104,

 

A few days ago I did spend some time to look into Sanofi and Eli Lilly.

 

Sanofi is a behemoth, also engaged in Diabetes, among a lot of other things. The product pallette with regard to Diabetes seems to be the blockbuster Lantus only, and several other products, with much smaller footprints, separately.

 

So to me, it's to an extent like Diabetes development projects in Sanofi are competing with others not related to Diabetes, based on the total amount of free cash flow available for R&D going forward [the management deciding], in stead of just letting the laws of capital allocation do their work.

 

With regard to Eli Lilly, it is to a degree the same, but Diabetes is larger part of the total business than at Sanofi.  Eli Lilly has an impressive track record, looking in the rear mirror, it has actually achieved to get over the finish line with some very impressive goals, thereby making life better for mankind [, and making a lot of money on that, by the way]. Personally I think it would be unwise to underestimate this player in the market, going forward, despite it has been  smoked by Novo Nordisk in recent years. 

 

Eli Lilly is a wonderful company, from what I have seen.

[John Hjorth]

The new Lars.

[John Hjorth]

Denmarks Radio - 21 Sunday: Autism and Novo Nordisk: an example. Pick it up at 29:44. [unfortunately only in Danish].

[bergman104]

Denmarks Radio - 21 Sunday: Autism and Novo Nordisk: an example. Pick it up at 29:44. [unfortunately only in Danish].

 

Any way to get this translated? or the other link you posted? If not can you give a short summary. Thanks!

[DooDiligence]

https://www.bloomberg.com/news/articles/2017-02-01/lilly-ceo-encouraged-by-trump-meeting-concerned-about-obamacare

 

-----

 

https://www.bloomberg.com/news/videos/2017-02-02/novo-nordisk-ceo-have-strong-growth-ahead-in-diabetes

[John Hjorth]

Denmarks Radio - 21 Sunday: Autism and Novo Nordisk: an example. Pick it up at 29:44. [unfortunately only in Danish].

 

Any way to get this translated? or the other link you posted? If not can you give a short summary. Thanks!

 

bergman104,

 

The article you can read by enabling the translation feature in Chrome, asking for translation from Danish to your mother tounge. It's far from perfect, but it works fairly good with translation to English, from what I can see by using it.

 

I will write briefs later on the video clips for you and others. I very much appreciate the comments and explanations in this topic from you. Thank you for taking the time to do so.

[John Hjorth]

As already mentioned earlier in this topic, The 2016 Novo Nordisk Annual Report [English & Danish] is out today.

 

For those fellow board members interested in this thing - I haven't had the time to read it in full yet:

 

1. There is a separate section in the Annual Report 2016 about the whole situation with regard to the US Diabetes market.

2. At least to me, the shareholder letters from Göran Aldo, Lars Rebien Sørensen and Lars Fruergaard Jørgensen are definitely worth the time reading.

3. The risk section written by Jesper Brandgaard I consider educational.

 

- - - o 0 o - - -

 

4. The rebates, discounts etc. in the US Diabetes market continue to sky rocket! [p. 66]

[John Hjorth]

Denmarks Radio - 21 Sunday: Autism and Novo Nordisk: an example. Pick it up at 29:44. [unfortunately only in Danish].

 

Brief:

 

This young woman is born autist, and with regard to the labor market she has been marginalized her whole life. She has never had "a real job". Living a life like that here in Denmark under the condions offered by the social system in place here is not in any aspect fun, I can assure you. If you can't stand up for your self in that situation, you just get squeezed by the system as such. [Here in Denmark, the term for that is "Cash thinking"].

 

Appearantly some social worker has used some ressources on her situation and tried to do some alternative - out of the box - thinking about her case. The case here was - that she is really exceptional with numbers - many autists are also savant with regard to something. In short: She is a female version of "Mr. Rainman". The social worker had somehow understood her unreleased potential, and got in contact with Novo Nordisk, if the company in some way could see an advantage for both her and the company, based on her extraordininary skills with numbers.

 

Somebody in the Novo Nordisk HR department saw the opportunity in the situation, and she was put on a short term contract between the company and the municipality or state, financed by society, free for the company, to try her out in a period, and then review the outcome after that period.

 

What was required was that somebody had to micro-manage her - and would allocate the needed time to do that. At the start with a lot of support to get her up running. With an autist like she is, you can't provide an ativity wheel, daily, weekly, monthly, yearly just to follow going forward, because if there are deviations from that, everything tilts in her head. You have to micro-manage her activities in a rolling way in very short cycles - two - three days per cycle, and do it in her Outlook calendar, task module - for her, and with her. In short: She is an eternal self-un-unpropelled worker, for who every day at work is the same - like the first day at a fairly large workplace, for everyone among us.

 

The worst part of every working day is her lunchbreak. She really has trouble in the canteen with all this noise from people just diffusing around to grab food and socializing and moving around in some stocastic pattern and at the same time making noise.

 

She got attached to an employee working on quality control on data, and he uses her exceptional skills with numbers to manually weed out errors in large spread sheets with data.

 

After the "test period" the company offers her a steady job, and a bonus, to get paid out with her first real salary in her whole life, for picking up the glove on this real challenge for her to get up running, by her means.

[John Hjorth]

Just a short practical advice here for fellow board members interested in NVO about what's going on - on a running basis.

 

There is at the company website the option to subscribe to all - or some - news releases. It works great for me, and I like it that way.

 

No need to visit Edgar or something else. It all comes to me, instead of me searching it all up.

[bergman104]

Thanks for the tip. I'm slowly working through the annual report. There is a lot to digest...

[John Hjorth]

You are welcome, bergman104 - yes, there is a lot to digest.

 

I actually feel a bit frayed at the edges now from all this reading, and I think I will call it it a day for now, for my part.

 

- - - o 0 o - - -

 

Here are some comments about what I have read in Annual Report 2016 so far, and some reflections on it:

 

The US rebate & discount situation is actually getting totally out of hand [Please see attached, p. 66 in the 2016 Annual Report]. The total US rebates and discounts figure for the US market is now DKK 82.299 B! [59% of US gross sales] - Up from DKK 69.788 B [56% of US gross sales] in 2015.

 

I actually think it will be impossible for me to find 10 Danish companies - listed or unlisted - that are actually running at a clip right now of a net turnover of DKK 82.229 B! - It's actually mind boggling.

 

Novo Nordisk 2017 Outlook also attached here. [p. 8 in the 2016 Annual Report].

 

Some dirty and rough back-on-the envelope calculations here:

 

Expected 2017 operating profit:

 

Realized operating profit for 2016: DKK 48.432 B

 

Lower level estimate range Outlook 2017 [0%] ~DKK 48.432 B

Higher level estimate range Outlook 2017 [+5%] ~DKK 50.854 B

Mid range estimate Outlook 2017: DKK 49.643 B

 

Net financials:

 

Around DKK 2.400 B.

 

Meaning:

 

Expected 2017 profit before income taxes:

 

Lower level estimate range Outlook 2017 ~DKK 46.032 B

Higher level estimate range Outlook 2017 ~DKK 48.454 B

Mid range estimate Outlook 2017: DKK 47.243 B

 

Effective tax rate Outlook 2017:

 

21 - 23%,

 

Meaning:

 

Expected 2017 net profit :

 

Lower level estimate range Outlook 2017 [DKK 46.032 B * [1,00-0,23]] ~DKK 35.444 B [Realized 2016: 37.925 B]

Higher level estimate range Outlook 2017 [DKK 48.454 B * [1,00-0,21]] ~DKK 38.279 B

Mid range estimate Outlook 2017: [DKK 47.243 B * [1.00-0.22]] ~ DKK 36.849 B.

[John Hjorth]

Only slightly related to Novo Nordisk, but I think I'll post it here anyway:

 

Denmark Announces its candidacy for hosting the European Medical Agency.

 

Lars Rebien Sørensen is appointed by the Danish Government to assist:

 

...Denmark has one of the world’s leading pharmaceutical industries, we already host the WHO’s Regional Office for Europe, and Copenhagen is a centrally located and dynamic bridge to the rest of Europe. That is why I, together with the rest of the government and the new special envoy, Lars Rebien Sørensen, in the coming months will work hard to gain support for Denmark’s candidacy.

[John Hjorth]

MedWatch.dk: Novo Nordisk Gains Market Shares in USA.

 

This article is based on a subscription protected article on Boersen.dk.

[DooDiligence]

Regarding assistance programs for high deductible patients:

 

https://www.pparx.org/prescription_assistance_programs/patient_assistance_program_insulin_novo_nordisk

 

Tresiba & Xultophy (Tresiba Victoza combo) & Saxenda are not listed.

 

-----

 

Lilly has gotten out front quickly & more effectively & Novo needs to follow their model with a more transparent "in your face" marketing program hi-lighting discount programs in the US.

 

http://www.biopharmadive.com/news/lilly-insulin-discount-price-express-scripts/432267/

 

Jacob Ries (Novo's new head of NA ops) is quoted in the article below.

 

https://www.washingtonpost.com/news/wonk/wp/2016/12/13/after-years-of-price-hikes-eli-lilly-announces-a-discount-on-insulin/?utm_term=.da1976f73f70

 

-----

 

Click for a quick search of Google results for "insulin discounts"

 

http://lmgtfy.com/?q=Insulin+discounts

 

I can't remember who introduced LMGTFY on COBF (can't take credit myself) but it's a brilliant little idea...

 

-----

 

We need to see more than just Novolog in search results (I believe it will be an important indication for Novo shareholders & patients.)

 

I'm going to get in touch with Mr. Ries office to see what they're doing on this front...

[John Hjorth]

DooDiligence,

 

Thanks for all the stuff for reading in this topic some days ago. I'm now reading up on the PBMs and trying to get an understanding of the total landscape in the value chain, when I have time for it. Alone understanding how the PBMs actually functions is quite some work!

 

I will get back to it in this topic.

 

- - - o 0 o - -

 

Jakob Riis, Executive Vice President and Head of North America Operations, resigned yesterday.

 

He has got a CEO position at Falck A/S, a Danish security company with an international footprint, from 1^st May.

[DooDiligence]

DooDiligence,

 

Thanks for all the stuff for reading in this topic some days ago. I'm now reading up on the PBMs and trying to get an understanding of the total landscape in the value chain, when I have time for it. Alone understanding how the PBMs actually functions is quite some work!

 

I will get back to it in this topic.

 

- - - o 0 o - -

 

Jakob Riis, Executive Vice President and Head of North America Operations, resigned yesterday.

 

He has got a CEO position at Falck A/S, a Danish security company with an international footprint, from 1^st May.

 

Wow, that was fast! (he just left Asia/Pacific for NA.)

 

Sure would like to know the back story on his resignation...

[John Hjorth]

DooDiligence,

 

Some background information:

 

Danish TV2: Novo [Nordisk] Crown price resigns: "I'm tremendously disappointed".

Business.dk: Novo [Nordisk] passed crown prince Jakob Riis becomes CEO at Falck.

Finans.dk: Passed Novo [Nordisk] crown prince becomes CEO at Falck.

Boersen.dk: Novo [Nordisk] chairman about Jakob Riis resignation: "Not a big surprise".

Boersen.dk: Goodbye to six Novo [Nordisk] bosses and 150 years of seniority - the locomotives are gone.

 

Common denominator: Ego & ambitions.

 

- This is absolutely not good!

[John Hjorth]

Novo Nordisk enters into a historic agreement with powerful buyer [PBM] in USA.

 

To me, this is the right thing to do - for both NVO and CVS. An effort to make the whole US health care system sustainable by volunteer agreements based on cooperation, in stead of facing regulation, so that the drugs needed by the patients will actually become available for all in need of them.

 

Most likely the dollars involved in this aren't even material for NVO and CVS.

 

Edit:

 

Original source.

[John Hjorth]

Novo Nordisk Foundation: Novo Nordisk Foundation announces changes to the board - The Board of the Novo Nordisk Foundation has elected Lars Rebien Jørgensen as a new member - 16^th March 2017.

[John Hjorth]

Bloomberg Quint: Novo Settles U.S. Probe of Kickbacks, Disguised Salespeople.

 

I was shocked reading this. I had no idea Novo Nordisk had such a probe pending, allegating and implying non-compliance based internal defined Novo Nordisk compliance, called the Novo Nordisk Way.

 

To make sure, that is was not time to get in contact with GP doctor for an appointment for both Demensia eludication and Alzheimer test, I grabbed the Novo Nordisk financials, because I did not recall to read about this case. It appears this probe is actually in the notes for both 2015 and 2016, but the wording seems to me to be biased, so you get a biased impression of it with regard to severity.

 

Next, how can some US based Novo Nordisk spokesman  comment on anything Novo Nordisk related, other than "We have no comments" [ right now], when the company is in its silent period ? 2017Q1 it will be out Wednesday.

 

It does not matter here, that this information is already out in the air from another source. It's a confirmation of some information from an other source.

 

- - - o 0 o - - -

 

Edit & PS:

 

Any of my few fellow board members invested in NVO considering buying puts on this thing monday or tuesday to hedge the ride on this thing next week? - I would, if I could - but I can't - because of a Danish tax regime being in the Stone age.