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How Did Novo’s Victoza Become a Leading Diabetes Drug?

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Victoza, Novo’s drug for type 2 diabetes, reported soaring revenues

Novo’s (NVO) Victoza earned 18 billion kroner during fiscal 2015, up by 34% from the previous year. The growth was fueled by contributions from North America coupled with higher revenue from Europe, Japan and Korea. In terms of value, Victoza held a market share of 67% in November 2015. The graph below details the geography-wise revenue distribution for Victoza.

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Revenue distribution for Victoza

In North America, Victoza revenues during fiscal 2015 jumped to 13 billion kroner, up 43.9% from 9 billion kroner in 2014. In the quarterly comparison, the growth in North America was ~6%. For details on the significance of the North American market, please refer to North America Is Still Novo Nordisk’s Largest Market.

In Europe, the company’s drug sales grew by 8%. Victoza revenues in Japan and Korea swelled by 68%.

Competition for Victoza

To remain a market leader in the diabetes space, companies consistently have to come up with novel molecules offering advantages over existing therapies. Novo too had to come up with one such drug, Xultophy, which is a combination of Tresiba and Victoza. Victoza is already facing stiff competition from AstraZeneca’s (AZN) Byetta and Bydureon, Sanofi’s (SNY) Lyxumia, and Eli Lilly’s (LLY) Trulicity.

With changing market dynamics, the share price may fluctuate over a broader range. To avoid such direct risk of investing in equities, investors can look for options such as the Vanguard FTSE All-World ex-US ETF (VEU). The fund holds ~0.31% in Novo Nordisk.

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