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What Are the Prospects for Novo’s Biopharmaceuticals Segment?

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Biopharmaceuticals

Novo’s (NVO) biopharmaceuticals segment sales grew by 6% on a reported basis to amount to 11.8 billion Danish kroner during 1H16. The segment includes hemophilia drugs, Norditropin, and other biopharmaceuticals. For detailed information on the business, please refer to Analyzing Novo’s Haemophilia and Growth Hormone Portfolio.

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Hemophilia drugs

During the first half of 2016, the hemophilia drugs’ sales fell by 2% on a reported basis to amount to 5.4 billion Danish kroner. The portfolio includes NovoSeven, NovoEight, and NovoThirteen. NovoSeven is the largest contributor with a 91% share of the total hemophilia portfolio. Its lower sales in the US remained the major factor behind the sales decline. In May 2016, Novo filed a BLA (Biologics License Application) for Nonacog beta pegol for hemophilia B with the US Food and Drug Administration.

In the hemophilia space, Novo competes with Baxalta, Shire’s subsidiary (SHPG), Pfizer (PFE), and Biogen (BIIB). Although BioMarin (BMRN) doesn’t have any hemophilia drugs, it’s investigating gene therapy for hemophilia.

Norditropin

Norditropin’s sales rose by 17% on a reported basis to amount to 4.6 billion Danish kroner during the first half of 2016. The positive non-recurring rebate adjustments in the US were offset by decreased volume. For details on Norditropin, you can refer to Novo Nordisk Expands Leadership in Growth Disorders.

Other biopharmaceuticals

Other biopharmaceuticals include Vagifem and Activelle. The portfolio grew by 9% on a reported basis to amount to 1.9 million Danish kroner in 1H16. Vagifem’s positive pricing in the US supported the growth. With changing market dynamics, the share price may fluctuate on a broader range. To avoid such direct risks from investing in equities, investors can look for options such as the VanEck Vectors Pharmaceutical ETF (PPH). The fund holds 4.0% in Novo Nordisk.

Continue to the next part to understand Novo’s dominance in the diabetes space.

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