Insulin leader Novo Nordisk profits spike, but outlook weaker

The world's largest insulin maker, Novo Nordisk of Denmark, posted today its highest ever annual profit but its stock plunged as the company slashed its long-term outlook.
Net profit for 2015 soared by 32 per cent to 34.8 billion kroner (4.67 billion euros, USD 5.0 billion).
The group said it expected its 2016 operating profit to rise by between five and nine percent, excluding currency effects and exceptional items, as it prepares to launch its ultraslow-acting insulin Tresiba in the United States in the first quarter, in what is expected to be its biggest launch to date.
But investors were disappointed by the company's long-term forecast for its operating profit, which it cut by half to 10 percent, from the 20 per cent it has maintained for the past two decades.

At 0345 IST, the share was down by 4.77 per cent, after shedding 7 per cent at opening, in an overall market down by 1.36 per cent. Over the past 12 months, the share had gained 29 per cent.
Sales surged by 22 per cent to 107.9 billion kroner.

Novo Nordisk posted record margins for a group its size: an operating margin of 45.8 per cent, up 7.0 percentage points from a year earlier, and a net margin of 32.3 per cent, up by 2.5 points.
But the group said it didn't expect to increase its operating margin, which it saw stable around 44 per cent in the medium-term. Between 2011 and 2014 it remained between 33 and 39 per cent.

The company, which holds 47 per cent of the world insulin market, has benefitted from the steady rise of diabetes around the world. Nine per cent of adults worldwide have been diagnosed with the disease that causes 1.5 million deaths per year, according to the World Health Organisation.
"We are very pleased with Novo Nordisk's performance in 2015 and the achievement of our four long-term financial targets. In 2016 we will continue to focus on the global launch of Tresiba," chief executive Lars Rebien Sorensen - named the best CEO in the world by the Harvard Business Review in October - said in a statement.

The company proposed a 28 per cent increase in the dividend paid out to shareholders.
Earnings in the fourth quarter alone were the weakest of the year, with a 26 per cent rise in net profit to 8.26 billion kroner.
Novo Nordisk also develops biopharmaceuticals, for hemophilia and growth hormones, a division which saw sales rise by 19 per cent.