By Dominic Chopping
Danish pharmaceutical company Novo Nordisk A/S on Friday posted a forecast-beating third-quarter net profit on strong growth for its diabetes and obesity treatments.
Net profit for the three months ended September 30 rose to 10.19 billion Danish kroner ($1.52 billion) from DKK9.04 billion a year earlier, beating the DKK9.86 billion forecast by analysts in a FactSet poll.
Sales rose 9.1% to DKK30.28 billion against analysts’ expectations of DKK30.39 billion.
Sales in the quarter were boosted by Novo Nordisk’s /zigman2/quotes/207193277/delayed DK:NOVO.B -0.79% diabetes and obesity treatments, but margins came under pressure due to lower margin insulin products and lower prices in the U.S.
The company reiterated intensifying global competition both within diabetes and biopharmaceuticals, especially the hemophilia-inhibitor segment. The company said it expects continued pricing pressure within diabetes, especially in the U.S.
For 2019, sales growth measured in local currencies is now seen at 5% to 6%, from an earlier estimate of 4% to 6%, but reported growth is still forecast to be around three percentage points higher.
Operating profit growth is still expected to be 4% to 6% in local currencies, with reported figures still expected to be around five percentage points higher.
However, the company said it now sees free cash flow this year at DKK31 billion to DKK35 billion, from DKK30 billion-DKK34 billion previously. Depreciation, amortization and impairment losses are seen DKK1 billion above its previous guidance at DKK5.5 billion, reflecting increased impairment of intangible assets.