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Bloomberg Audio Studios, podcasts, radio news.

Joining us now and please to say we have Lars Frogard Jorgensen. He is the CEO of Novo Nordisks out with earnings today and obviously a lot of questions, a lot of focus on production and on capacity. It seems like you still have the very happy problem of having more demand than you do supply, something that you expect to see gradual improvement over the next year or so. But if you can give us a little bit more color on when we're expected to see that improvement, expected to see more supply arrive in the US, that would be very helpful.

Joining us now and please to say we have Lars Frogard Jorgensen. He is the CEO of Novo Nordisks out with earnings today and obviously a lot of questions, a lot of focus on production and on capacity. It seems like you still have the very happy problem of having more demand than you do supply, something that you expect to see gradual improvement over the next year or so. But if you can give us a little bit more color on when we're expected to see that improvement, expected to see more supply arrive in the US, that would be very helpful.

Yeah, thanks for having me back, and you are right this is a key topic for us, and I would actually point to some clear evidence. We saw that when we started the quarter we were down to some five six thousand new patient start on a weekly basis.

Yeah, thanks for having me back, and you are right this is a key topic for us, and I would actually point to some clear evidence. We saw that when we started the quarter we were down to some five six thousand new patient start on a weekly basis.

That has now.

That has now.

Increased to some twenty seven thousand new starts on a weekly basis.

Increased to some twenty seven thousand new starts on a weekly basis.

So that's really the.

So that's really the.

Proof point that we are scaling up the number of products we bring to the market. And we have a policy of making sure that when we bring patients onto treatment they can also stay on treatment, so we can assume that we also have the higher doses available now, so we can actually tight trade patients up to that. And this is what has happened save through the first say four months of the year, so to say. And we will gradually be expanding manufacturing throughout the year and also into coming years. So we are committed to bring our innovation to more and more patients on a great basis.

Proof point that we are scaling up the number of products we bring to the market. And we have a policy of making sure that when we bring patients onto treatment they can also stay on treatment, so we can assume that we also have the higher doses available now, so we can actually tight trade patients up to that. And this is what has happened save through the first say four months of the year, so to say. And we will gradually be expanding manufacturing throughout the year and also into coming years. So we are committed to bring our innovation to more and more patients on a great basis.

Let's talk about manufacturing a little bit more. Obviously, earlier this year you purchased catally Net to help boost your efforts there. You also said that you're doubling your investment in manufacturing capacity this year to about six point four billion dollars. And I'm curious where that money will be spent. Whether we're talking about the final phil finished stage or actually boosting capacity manufacturing of your active ingredient. Where do you see the biggest constraints right now?

Let's talk about manufacturing a little bit more. Obviously, earlier this year you purchased catally Net to help boost your efforts there. You also said that you're doubling your investment in manufacturing capacity this year to about six point four billion dollars. And I'm curious where that money will be spent. Whether we're talking about the final phil finished stage or actually boosting capacity manufacturing of your active ingredient. Where do you see the biggest constraints right now?

We are doing both.

We are doing both.

So over the past few years we have made a couple of commitments to expand our API capacity. That's primarily done in our big sites here in Denmark. And then to complement that, we are adding bill finished capacity. We do that on all our existing sides, but we also do that will contract manufacturers and it's in this context our acquisition of three fill finished sides from new holdings who are then acquiring Catalant is an important transaction for us, and that's really part of this all ramp of capacity, and we really excited about what this brings of opportunity to treat millions and more patients in the coming years.

So over the past few years we have made a couple of commitments to expand our API capacity. That's primarily done in our big sites here in Denmark. And then to complement that, we are adding bill finished capacity. We do that on all our existing sides, but we also do that will contract manufacturers and it's in this context our acquisition of three fill finished sides from new holdings who are then acquiring Catalant is an important transaction for us, and that's really part of this all ramp of capacity, and we really excited about what this brings of opportunity to treat millions and more patients in the coming years.

With that ramp up in capacity, there's an added cost that comes with that, Lars, what's the balance between those added costs and your own pricing power longer term?

With that ramp up in capacity, there's an added cost that comes with that, Lars, what's the balance between those added costs and your own pricing power longer term?

Well, I see it like this that when we ramb up capacity, we actually bring scale into manufacturing. That's an opportunity to bring down a unit cost and also over time serve many more patients. And typically when you add more and more patients, you also add patients that come at a lower, say cost, because different channels have different price points. So I think it's a great opportunity of us to bring innovation to more and more patients, the benefit to the healthcare systems of treating those patients, but obviously also a continued growth opportunity for non natic and I think that's actually a wonderful model where we can benefit society then video patients, but also bring growth to our company.

Well, I see it like this that when we ramb up capacity, we actually bring scale into manufacturing. That's an opportunity to bring down a unit cost and also over time serve many more patients. And typically when you add more and more patients, you also add patients that come at a lower, say cost, because different channels have different price points. So I think it's a great opportunity of us to bring innovation to more and more patients, the benefit to the healthcare systems of treating those patients, but obviously also a continued growth opportunity for non natic and I think that's actually a wonderful model where we can benefit society then video patients, but also bring growth to our company.

What are your unit costs right now for Exampic and Mogovi.

What are your unit costs right now for Exampic and Mogovi.

Well, we don't disclose those.

Well, we don't disclose those.

You can see our say post of good sold in our accounts. There's been some talks in the market about what the cost of producing our products. I think those numbers are not correct. Those are paths reflecting some of the direct input costs, but they do not reflect the massive investments you need to do into both running quality systems and actually building these fatilities that's needed. So it's massive billions of dollars that we invest into capacity to bring our invasion to patients.

You can see our say post of good sold in our accounts. There's been some talks in the market about what the cost of producing our products. I think those numbers are not correct. Those are paths reflecting some of the direct input costs, but they do not reflect the massive investments you need to do into both running quality systems and actually building these fatilities that's needed. So it's massive billions of dollars that we invest into capacity to bring our invasion to patients.

I understand that.

I understand that.

I mean, I'm sure you're aware of that Yale study that seemed to suggest that you can produce this profitably profitably on a unit basis at around five dollars, which is still a pretty big differential elease for what those drugs cost here in the US upwards of a thousand dollars a month here, even if you take into account the billions and research that you had to do to get these drugs to market, is that gap maybe a little bit still too wide.

I mean, I'm sure you're aware of that Yale study that seemed to suggest that you can produce this profitably profitably on a unit basis at around five dollars, which is still a pretty big differential elease for what those drugs cost here in the US upwards of a thousand dollars a month here, even if you take into account the billions and research that you had to do to get these drugs to market, is that gap maybe a little bit still too wide.

I'm actually quite disturbed by a number like that because I don't think that's a true representation of what it costs to produce medicine. I think and thinks it brings false hopes to patients that anyone can produce at that price. And if the interesting I actually think is actually creating less intentives to actually start making production if that's what people believe it will cost. So it costs much more than that to produce products of say a high quality that's living up to the requirements from FDA and all regulators.

I'm actually quite disturbed by a number like that because I don't think that's a true representation of what it costs to produce medicine. I think and thinks it brings false hopes to patients that anyone can produce at that price. And if the interesting I actually think is actually creating less intentives to actually start making production if that's what people believe it will cost. So it costs much more than that to produce products of say a high quality that's living up to the requirements from FDA and all regulators.

So I don't really subscribe to that number, to be honest.

So I don't really subscribe to that number, to be honest.

So some quibbles, of course, with the Yale study. You also have the likes of US Senator Bernie Sanders opening an investigation into the pricing of ozembic and WAYGOV basically saying that insurres are going to have to double their premiums in order to cover these drugs. And let's talk a little bit more about pricing and your strategy here, given the debate the conversation that of course is going on around both ozembic and WAYGOVY, what are the steps, what are the decision points that you're making when it comes actually lowering the list price.

So some quibbles, of course, with the Yale study. You also have the likes of US Senator Bernie Sanders opening an investigation into the pricing of ozembic and WAYGOV basically saying that insurres are going to have to double their premiums in order to cover these drugs. And let's talk a little bit more about pricing and your strategy here, given the debate the conversation that of course is going on around both ozembic and WAYGOVY, what are the steps, what are the decision points that you're making when it comes actually lowering the list price.

So let's be honest and talk about what is the real price, and you can see in our owning release for this quarter that we are actually seeing lower realized price and coming to no Nordice. And if you look over the purit since we launched Osimpic, we actually have a price point to no Noidice that some forty percent lower than when we launched the product. So that a lot of talk about the list price in the yeers, but the way the mark works is that there's a gross to net model. You launch at a list price, you give some rebates, typically enhance those rebates over the years. So it's a bit again misunderstood to just talk about price of medicine looking at the list price. And if we as a company just reduce the list price, that would actually not benefit patients because in many cases that would lead to us having less access on the formularies and our product would be available for fewer patients. So it's a net price we compete on. And if you look at our price over the years we've been on the market in the US since twenty eighteen, that's actually gone down by some forty percent.

So let's be honest and talk about what is the real price, and you can see in our owning release for this quarter that we are actually seeing lower realized price and coming to no Nordice. And if you look over the purit since we launched Osimpic, we actually have a price point to no Noidice that some forty percent lower than when we launched the product. So that a lot of talk about the list price in the yeers, but the way the mark works is that there's a gross to net model. You launch at a list price, you give some rebates, typically enhance those rebates over the years. So it's a bit again misunderstood to just talk about price of medicine looking at the list price. And if we as a company just reduce the list price, that would actually not benefit patients because in many cases that would lead to us having less access on the formularies and our product would be available for fewer patients. So it's a net price we compete on. And if you look at our price over the years we've been on the market in the US since twenty eighteen, that's actually gone down by some forty percent.

So okay, So you've also said, of course, that WAYGOV when it comes to the lower realized price. It's expected to persist throughout the year. Those prices coming down, and I want to talk a little bit about the forces behind that driving those prices down. Is that going to be due to competitive pressure in your view, or just expanding access more supply.

So okay, So you've also said, of course, that WAYGOV when it comes to the lower realized price. It's expected to persist throughout the year. Those prices coming down, and I want to talk a little bit about the forces behind that driving those prices down. Is that going to be due to competitive pressure in your view, or just expanding access more supply.

I think it's a combination.

I think it's a combination.

We typically see that when you launch in the US, you realize the highest price year or year you give rebate concessions, and of course that rebate concession is also a function of competition. And now we're seeing more competition than the one space, and that that also has an impact on price. So I actually think this is a good development because there's a big need for our innovation. We see more and more patients and prescribers wanted to use our products. Enhance rebates, we realize a lower knit price, and I actually think that's a model that works both for the payer and for us because the volume drives our volume.

We typically see that when you launch in the US, you realize the highest price year or year you give rebate concessions, and of course that rebate concession is also a function of competition. And now we're seeing more competition than the one space, and that that also has an impact on price. So I actually think this is a good development because there's a big need for our innovation. We see more and more patients and prescribers wanted to use our products. Enhance rebates, we realize a lower knit price, and I actually think that's a model that works both for the payer and for us because the volume drives our volume.

Growth or our revenue growth.

Growth or our revenue growth.

Despite the fact that we could listen less far medicines on a produce and per patient unit measurement.

Despite the fact that we could listen less far medicines on a produce and per patient unit measurement.

Lauris I am curious here if we look a little bit more long term and based on what we know about the science of these glp ones. There's been a lot of discussion as to whether these are kind of quote unquote forever drugs that once you start taking them, you're basically going to need to stay on them for life in order to realize and maintain the benefits. Has there been much discussion within NOVO about whether this is indeed a forever drug or whether there is an off ramp for those folks who lose the weight, who improve their health and effectively want to cease taking the drug.

Lauris I am curious here if we look a little bit more long term and based on what we know about the science of these glp ones. There's been a lot of discussion as to whether these are kind of quote unquote forever drugs that once you start taking them, you're basically going to need to stay on them for life in order to realize and maintain the benefits. Has there been much discussion within NOVO about whether this is indeed a forever drug or whether there is an off ramp for those folks who lose the weight, who improve their health and effectively want to cease taking the drug.

Yeah, I believe these are early days. Globally, there's more more than a billion patients who live with obesity, and I think we'll come to realize that they are quite a difference among these patients. Some will have a very say, progressive disease, be that type total leaders obesity, and will continuously need more and more eificacious medicine, so they'll stay on innovative medicine and probably higher price medicines.

Yeah, I believe these are early days. Globally, there's more more than a billion patients who live with obesity, and I think we'll come to realize that they are quite a difference among these patients. Some will have a very say, progressive disease, be that type total leaders obesity, and will continuously need more and more eificacious medicine, so they'll stay on innovative medicine and probably higher price medicines.

But you will also.

But you will also.

Find the patients who perhaps can you know, manage the disease by being on medicine for a shorter period of time and maybe can move to say a first generation, a generic, a cheaper price medicine. And some might even be able to do without medicine. It's simply too early to say, so we'll have to starty that more and and look at at the individual patient journeys and all of that. I think there's a fantastic opportunity from a commercial point of view, but also in terms of lasting health benefit for individual patients. And that's really what the healthcare systems are after. And we know that some of these conditions we talk about is actually what is driving a significant part of the healthcare system cost, so different patient journeys to get through a lasting health benefit for the individual and the healthcare system, and I think that's what interdaty is going to justify also paying for these innovations.

Find the patients who perhaps can you know, manage the disease by being on medicine for a shorter period of time and maybe can move to say a first generation, a generic, a cheaper price medicine. And some might even be able to do without medicine. It's simply too early to say, so we'll have to starty that more and and look at at the individual patient journeys and all of that. I think there's a fantastic opportunity from a commercial point of view, but also in terms of lasting health benefit for individual patients. And that's really what the healthcare systems are after. And we know that some of these conditions we talk about is actually what is driving a significant part of the healthcare system cost, so different patient journeys to get through a lasting health benefit for the individual and the healthcare system, and I think that's what interdaty is going to justify also paying for these innovations.

I'm also curious to talk about forms here. Obviously the current form is injectibles. There's a lot of interest though and when this will be available in a pill form. So if I take a look at oral Sema glue Tide, it's in phase three trials, I believe. Looking further into the future, when of course that is up and running and available to the public, how do you see that shaping up. Do you think that pills could possibly overtake the injectibles?

I'm also curious to talk about forms here. Obviously the current form is injectibles. There's a lot of interest though and when this will be available in a pill form. So if I take a look at oral Sema glue Tide, it's in phase three trials, I believe. Looking further into the future, when of course that is up and running and available to the public, how do you see that shaping up. Do you think that pills could possibly overtake the injectibles?

We see the data we head today maybe as the best proxy in type two diabetes, where we have the same active ingredients, the same molecule available both as a weakly injection and as a daily tablet, and there we actually see that when both are available, many will actually believe that weakly injection is a very convenient way of dealing with your disease, to take one shorter week and you don't need to worry about it. But there are also patients who prefer an all treatment.

We see the data we head today maybe as the best proxy in type two diabetes, where we have the same active ingredients, the same molecule available both as a weakly injection and as a daily tablet, and there we actually see that when both are available, many will actually believe that weakly injection is a very convenient way of dealing with your disease, to take one shorter week and you don't need to worry about it. But there are also patients who prefer an all treatment.

So I think these.

So I think these.

Administration routes will co exist in the market and it'll be down to individual patient preference. And then, of course, back to our prior discussion it figency matters. So if you have a progressive state of your disease where you really need to have the highesticacy possible, you most likely need to be unejectable treatment because that's the easiest way to get into, say, the benefit of the molecule by injecting. And then you might have patients who needs say less if the case is treatment, who can get away with using a tablet if they actually for

Administration routes will co exist in the market and it'll be down to individual patient preference. And then, of course, back to our prior discussion it figency matters. So if you have a progressive state of your disease where you really need to have the highesticacy possible, you most likely need to be unejectable treatment because that's the easiest way to get into, say, the benefit of the molecule by injecting. And then you might have patients who needs say less if the case is treatment, who can get away with using a tablet if they actually for

Daily tap the base treatment mm HM

Daily tap the base treatment mm HM