After North America, the International Operations region is Novo Nordisk’s (NVO) next main growth contributor. International Operations encompasses 153 countries around the world, including Latin America, Africa, the Middle East, the Gulf, most of Asia, Australia, Oceania, and New Zealand.
International Operations includes some of the world’s richest and poorest countries. Several countries have private as well as public healthcare systems. Public healthcare systems generally offer reimbursement only for human insulin, while private healthcare systems reimburse for modern insulin therapies.
As the number of diabetes patients continues to grow in the International Operations region, this region can offer growth prospects for both the low-priced human insulin and high-priced modern insulin markets.
Diabetes care segment
Novo Nordisk’s growth in the diabetes care segment in the International Operations region is mainly driven by the company’s three modern insulin therapies. The company’s next-generation insulin therapy Tresiba (insulin degludec), already launched in ten countries in the region, has received positive response in these markets.
Novo Nordisk accounts for 55% of the total insulin volume in the International Operations region. About 62% of the company’s insulin volume used in the private healthcare system is administered through injectable pen devices.
The glucagon-like peptide-1 (or GLP-1) analog diabetes therapy market also continues to grow in the International Operations region. It currently accounts for 2.3% value of the total diabetes care market in the region.
Despite the launch of competing products such as AstraZeneca’s (AZN) Byetta and Bydureon, Sanofi’s (SNY) Lixumia, and Eli Lilly’s (LLY) Trulicity, the growth of the GLP-1 market is mainly driven by Novo Nordisk’s Victoza (liraglutide) sales.
Victoza is currently the market leader with 75% market share in the GLP-1 analog diabetes therapy market in the International Operations region.
Japan and Korea
Novo Nordisk accounts for 52% volume of the insulin used in Japan. The performance of the company’s insulin therapies, however, has been on a decline as patients have shifted to next-generation insulin therapy Tresiba. Approved by Japan’s Ministry of Health, Labour and Welfare on September 28, 2012, Tresiba has proved to be a commercial success in Japan.
You can get diversified exposure to Novo Nordisk’s strong presence in International Operations, Japan, and Korea and still control excessive risks by investing in the VanEck Vectors Pharmaceutical ETF (PPH). Novo Nordisk accounts for 5.05% of PPH’s total holdings.