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How Novo Nordisk Performed in the 1st Half of 2017

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Novo Nordisk’s revenue trends

In the first half of 2017, Novo Nordisk (NVO) reported revenues of $8.3 billion compared to $8.2 billion in the first half of 2016. In 2Q17, Novo Nordisk generated revenues of $4.2 billion, which is a ~2.0% growth on a YoY (year-over-year) basis and a ~4.0% growth on a QoQ (quarter-over-quarter) basis.

In 2Q17, Novo Nordisk reported a gross profit of $3.6 billion, which represents 84.6% of its net revenues. In 2Q17, the company reported operating profits and net profits of $2.0 billion and $1.5 billion, respectively, compared to $1.9 billion and $1.5 billion, respectively, in 2Q16.

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Geographical revenue trends

In 2Q17 in the US market, Novo Nordisk generated revenues of ~$2.2 billion, which reflected a ~4.0% growth on a YoY basis. In 2Q17, outside the North American market, Novo Nordisk generated revenues of $2.0 billion compared to $1.9 billion in 2Q16.

In 2Q17 in Europe, China, Japan and Korea, and Latin America, Novo Nordisk generated revenues of $791.0 million, $386.0 million, $232.0 million, and $139.0 million, respectively, compared to $803.0 million, $382.0 million, $244.0 million, and $113.0 million, respectively, in 2Q16.

2Q17 expenses

In 2Q17, Novo Nordisk reported S&D (sales and distribution) costs of $999.0 million compared to $1.0 billion in 2Q16. In 2Q17, Novo Nordisk reported R&D (research and development) expenses and administrative expenses of $504.0 million and $126.0 million, respectively, compared to $505.0 million and $133.0 million, respectively, in 2Q16.

In the first half of 2017, Novo Nordisk reported S&D, R&D, and administrative expenses of $1.97 billion, $975.0 million, and $257.0 million, respectively, compared to $2.04 billion, $993.0 million, and $267.0 million, respectively, in the first half of 2016.

Novo Nordisk’s peers in the pharmaceuticals market include Merck & Co. (MRK), Sanofi (SNY), Eli Lilly (LLY), Johnson & Johnson, and AstraZeneca. Novo Nordisk’s revenue growth could boost the share prices of the Vanguard FTSE Developed Markets ETF (VEA). Novo Nordisk makes up ~0.41% of VEA’s total portfolio holdings.

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