Novo Nordisk Loses Schultz as Rebien Sorensen Stays in CEO Post

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Novo Nordisk A/S said President Kaare Schultz, who had aspired to become chief executive, is leaving the world’s largest insulin maker after the board asked Lars Rebien Sorensen to remain at the helm.

Rebien Sorensen will be CEO until his contract expires in 2019, Novo said in a statement Thursday. The company reorganized its executive management team. The move came as Novo raised its operating profit forecast for 2015 following an initial public offering of its NNIT unit in Copenhagen, and posted first-quarter net income that beat analysts’ estimates.

Schultz, 53, “made no secret of looking forward to assuming my position,” Rebien Sorensen said during a conference call with reporters. He decided to leave immediately as a consequence of the reshuffle, which eliminated Schultz’s role as chief operating officer, the CEO said.

Novo Nordisk shares have returned 56 percent over the past year including reinvested dividends, giving the Danish drugmaker a market value of 970 billion kroner ($145 billion). The Bloomberg Europe Pharmaceutical Index returned 34 percent in the period.

The profit gains are in part because Novo Nordisk’s U.S. sales of Victoza and the insulin Levemir have been holding up even as the country’s payers of prescription bills seek to wring discounts from drugmakers. The company’s biggest growth engine is Victoza, which stimulates natural insulin production.

“We see little reason to doubt Novo’s growth potential,” Michael Leuchten, an analyst at Barclays Plc in London, wrote in an April 27 note to clients. “Despite the arrival of competitors, Victoza continues to grow.”

Raises Forecast

Operating profit in local currencies may climb by about 17 percent, and sales growth on the same basis will probably range from 7 percent to 9 percent, the Bagsvaerd, Denmark-based company said in a statement on Thursday. The company had previously said 2015 operating profit would climb 10 percent and revenue was expected to grow in a range of 6 percent to 9 percent, excluding currency shifts.

Net income for the first quarter climbed 53 percent to 9.88 billion kroner from 6.46 billion kroner, Novo said. That beat the 9.27 billion-krone average estimate of analysts surveyed by Bloomberg. The profit was boosted by a one-time gain of 2.4 billion kroner as Novo divested a 74.5 percent stake in information-technology unit NNIT during its March IPO.

Novo in March also resubmitted its application for Tresiba insulin, already sold in 27 countries, to U.S. regulators, taking the company one step closer to getting access to the world’s biggest pharmaceutical market for its medicine.

Drug Sales

First-quarter sales of Victoza advanced to 3.96 billion kroner, beating the average analyst estimate of 3.82 billion kroner. Sales of Levemir climbed to 4.07 billion kroner in the three months, a 13 percent increase in local currencies.

Drugmakers are rushing to develop new treatments for diabetes, a market that may be worth more than $58 billion by 2018, according to a Standard & Poor’s estimate. Sedentary lifestyles and obesity are swelling the ranks of patients with type 2 diabetes, a chronic form of the disease in which the body becomes resistant to insulin or doesn’t make enough of the hormone to manage the level of sugar in the blood.

Novo Nordisk won U.S. regulator approval on Dec. 23 to market a weight-loss injection. The treatment, Saxenda, was cleared for adults who are obese or overweight and have a related condition, such as high blood pressure. Novo introduced the treatment in the U.S. this month.

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