SOURCE: Novo Nordisk A/S

August 07, 2008 02:15 ET

Half-yearly report

BAGSVAERD, DENMARK--(Marketwire - August 7, 2008) - Financial statement for the period 1 January 2008 to 30 June 2008


Novo Nordisk increased first half-year sales by 13% in local currencies and improved underlying operating profit by around 25%

*          Novo Nordisk increased sales by 13% in local currencies
  and by 7% in Danish kroner due to a significant negative currency
  development.
o        Sales of modern insulins increased by 30% (21% in Danish
kroner).
o        Sales of NovoSeven® increased by 14% (6% in Danish kroner).
o        Sales of Norditropin® increased by 15% (9% in Danish
kroner).
o        Sales in North America increased by 19% (4% in Danish
kroner).
o        Sales in International Operations increased by 23% (14% in
Danish kroner).

*          Gross margin improved by 1.3 percentage points in local
  currencies and by 0.1 percentage point in Danish kroner to 77.1% in
  the first six months of 2008, reflecting continued productivity
  improvements and a negative currency impact of around 1.2
  percentage points.

*          Operating profit increased by 11% to DKK 5,675 million.
  Adjusted for the approximately 14% impact from currencies,
  underlying operating profit increased by around 25%.

*          Net profit decreased by 13% to DKK 4,651 million due to
  the non-recurring income of DKK 1.4 billion booked in the second
  quarter of 2007 from Novo Nordisk's divestment of Dako's business
  activities. Excluding the effect from the non-recurring income of
  DKK 1.4 billion, net profit increased by 15%.

*          Liraglutide, the once-daily human GLP-1 analogue, has been
  filed for regulatory approval in the US, Europe and Japan. The
  competitive profile of liraglutide was reinforced with headline
  results from a phase 3b clinical study communicated in June in
  which liraglutide provided statistically significantly better blood
  glucose control for people with type 2 diabetes compared to the
  currently marketed GLP-1 product, exenatide.

*          For 2008, the expectation for reported operating profit
  growth is increased to 22-25%, and the expectations for growth in
  underlying operating profit, ie adjusted for the impact from
  currencies and non-recurring items, is likewise increased to around
  25%.

Lars Rebien Sørensen, president and CEO, said: "We are very pleased with the performance in the first half of 2008 with robust sales growth for modern insulins, NovoSeven® and Norditropin®. The submissions for regulatory approval of liraglutide in the US, Europe and Japan are major achievements and we are enthusiastic about the prospect of bringing liraglutide to market in all three regions."

Financial statement for the first six months of 2008

This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies used in the interim report are consistent with those used in the Annual Report 2007. The interim report has not been audited.

Amounts in DKK million, except average number of shares outstanding, earnings per share and full-time employees.


                                                 % change          6M
                                             2007              to  6M
Income statement             6M 2008 6M 2007                     2008

Sales                         21,724  20,381                       7%

Gross profit                  16,757  15,703                       7%
Gross margin                   77.1%   77.0%

Sales and distribution costs   6,153   6,158                       0%
Percent of sales               28.3%   30.2%

Research and development       3,838   3,401                      13%
costs
- hereof costs related to
discontinuation of pulmonary
diabetes projects                375       -                        -
Percent of sales               17.7%   16.7%

Administrative expenses        1,253   1,208                       4%
Percent of sales                5.8%    5.9%

Licence fees and other           162     198                    (18%)
operating income

Operating profit               5,675   5,134                      11%
Operating margin               26.1%   25.2%

Net financials                   444   1,634                    (73%)
Profit before tax              6,119   6,768                    (10%)

Net profit                     4,651   5,361                    (13%)
Net profit margin              21.4%   26.3%

Other key numbers

Depreciation, amortisation     1,130   1,025                      10%
and impairment losses
Capital expenditure              542     952                    (43%)

Cash flow from operating       5,986   3,989                      50%
activities
Free cash flow                 5,384   2,926                      84%

Total assets                  48,478  48,300                       0%
Equity                        33,046  33,475                     (1%)
Equity ratio                   68.2%   69.3%

Average number of shares
outstanding (million) -
diluted                        624.9   639.8                     (2%)

Diluted earnings per share      7.44    8.38                    (11%)
(in DKK)

Full-time employees at the    26,060  24,729                       5%
end of the period

Sales development by segments

Sales increased by 13% measured in local currencies and by 7% in Danish kroner. While growth was realised within both diabetes care and biopharmaceuticals, the primary growth contribution originated from the modern insulins.


                                 Sales   Growth     Growth   Share of
                               6M 2008       as   in local     growth
                                   DKK reported currencies   in local
                               million                     currencies
The diabetes care segment
Modern insulins                  7,924      21%        30%        71%
Human insulins                   5,905     (7%)       (3%)       (6%)
Insulin-related products           903       5%        10%         3%
Oral antidiabetic products       1,118       6%        14%         6%
Diabetes care - total           15,850       7%        14%        74%

The biopharmaceuticals segment
NovoSeven®                       3,088       6%        14%        16%
Growth hormone therapy           1,864       9%        15%         9%
Other products                     922     (4%)         3%         1%
Biopharmaceuticals - total       5,874       5%        13%        26%

Total sales                     21,724       7%        13%       100%


Sales development by regions

In the first six months of 2008, sales growth was realised in all regions. The main contributors to growth were North America and International Operations providing 46% and 31% respectively of the total sales growth measured in local currencies. Europe contributed 21% and Japan & Oceania 2% of the sales growth. Sales in International Operations in the first six months of 2008 were positively impacted by the timing of tender sales compared to the first six months of 2007.

Diabetes care

Sales of diabetes care products increased by 14% measured in local currencies and by 7% in Danish kroner to DKK 15,850 million compared to the first six months of 2007.

Modern insulins, human insulins and insulin-related products

Sales of modern insulins, human insulins and insulin-related products in the first six months of 2008 increased by 14% measured in local currencies and by 7% in Danish kroner to DKK 14,732 million compared to the same period last year. All regions contributed to growth measured in local currencies, with North America and International Operations having the highest growth rates. Novo Nordisk continues to be the global leader with 52% of the total insulin market and now 44% of the modern insulin market, both measured by volume.

Sales of modern insulins increased by 30% in local currencies and by 21% in Danish kroner to DKK 7,924 million with Levemir® contributing the highest share of growth and increasing by 72% in local currencies compared to the first six months of 2007. All regions realised solid growth rates for the modern insulins with North America and Europe as the primary contributors to growth. Sales of modern insulins now constitute 57% of Novo Nordisk's sales of insulin.

In June, NovoMix® reached more than USD 1 billion in sales during the past 12 months making NovoMix® the second Novo Nordisk modern insulin to reach blockbuster sales level.

North America

Sales in North America increased by 21% in local currencies in the first six months of 2008 and by 7% in Danish kroner, reflecting a solid penetration of the modern insulins Levemir®, NovoLog® and NovoLog® Mix 70/30. Novo Nordisk maintains its leadership position in the US insulin market with 42% of the total insulin market and 31% of the modern insulin market, both measured by volume.

Europe

Sales in Europe increased by 8% in local currencies and by 6% measured in Danish kroner, reflecting continued progress for the portfolio of modern insulins. Novo Nordisk holds 56% of the total insulin market and 51% of the modern insulin market, both measured by volume, and continues to capture the main share of growth in the modern insulin market.

International Operations

Sales within International Operations increased by 20% in local currencies and by 12% in Danish kroner. In the first six months of 2008, sales of modern insulins continued to be a significant contributor to growth in the region, led by China, Turkey and Algeria. Furthermore, sales of human insulins continue to add to overall growth in the region, driven by China.

Japan & Oceania

Sales in Japan & Oceania increased by 4% in local currencies and by 3% measured in Danish kroner. The sales development reflects sales growth for the modern insulins NovoRapid® and NovoRapid Mix® 30 as well as for Levemir® which was launched in Japan in December 2007. Levemir® has already reached solid penetration with a current volume market share of above 15% of the long-acting insulin market in Japan. Novo Nordisk holds 73% of the total insulin market in Japan and 64% of the modern insulin market, both measured by volume.

Oral antidiabetic products (NovoNorm®/Prandin®)

In the first six months of 2008, sales of oral antidiabetic products increased by 14% in local currencies and by 6% in Danish kroner to DKK 1,118 million compared to the first six months of 2007. This primarily reflects increased sales in Europe followed by North America and International Operations.

Biopharmaceuticals

In the first six months of 2008, sales of biopharmaceutical products increased by 13% measured in local currencies and by 5% measured in Danish kroner to DKK 5,874 million compared to the first six months of 2007.

NovoSeven®

Sales of NovoSeven® increased by 14% in local currencies and by 6% in Danish kroner to DKK 3,088 million compared to the first six months of 2007. Sales growth for NovoSeven® was primarily realised in International Operations and in North America. The sales growth for NovoSeven® primarily reflected increased sales within the congenital bleeding disorder segments, where Novo Nordisk is the global leader. Treatment of spontaneous bleeds for congenital inhibitor patients remains the largest area of use. Sales of NovoSeven® in International Operations in the first six months of 2008 were positively impacted by the timing of tender sales compared to the first six months of 2007.

Growth hormone therapy (Norditropin®)

Sales of Norditropin® (ie growth hormone in a liquid, ready-to-use formulation) increased by 15% measured in local currencies and by 9% measured in Danish kroner to DKK 1,864 million. Growth was realised in all regions with North America as the primary contributor. Novo Nordisk continues to gain market share in the growth hormone market and has the second-largest global market share of now 24% measured by volume.

Other products

Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy (HRT)-related products, increased by 3% in local currencies and decreased by 4% in Danish kroner to DKK 922 million. This development reflects sales growth for Vagifem®, a locally administered HRT product, but also generic competition to Activella®, a continuous combined HRT product, in the US.

Costs, licence fees and other operating income

The cost of goods sold was DKK 4,967 million in the first six months of 2008, representing a gross margin of 77.1% compared to 77.0% in the same period last year. Excluding the impact from currency developments, primarily reflecting the lower value of the US dollar and the British pound versus the Danish krone compared to the first six months of 2007, the gross margin in the first six months of 2008 was 78.3%. This improvement reflects improved production efficiency and higher average prices in the US.

In the first six months of 2008, total non-production-related costs increased by 4% to DKK 11,244 million compared to the same period last year. Sales and distribution costs were largely unchanged, reflecting the combined effect of a provision related to an antidumping case in Brazil recorded in the first quarter of 2007, and increased US costs in the first half of 2008 related to the expanded sales force. Research and development costs increased by 13% reflecting an increased level of activity in late-stage clinical development as well as the non-recurring costs related to the discontinuation of AERx® and other pulmonary diabetes projects.

Licence fees and other operating income of DKK 162 million in the first six months of 2008 represent a decrease of 18% compared to the same period last year, which was positively impacted by a non-recurring income from the out-licensing of an oral antidiabetic compound.

Net financials

Net financials showed a net income of DKK 444 million in the first six months of 2008 compared to a net income of DKK 1,634 million in the same period last year, where a non-recurring and tax-exempt income of DKK 1.4 billion from the divestment of the ownership of Dako's business activities was recorded.

Included in net financials is the result from associated companies with an expense of DKK 70 million, primarily related to Novo Nordisk's share of losses in ZymoGenetics, Inc., partly countered by an additional income of around DKK 50 million related to the divestment of the business activities in Dako in the second quarter of 2007.

The foreign exchange result was an income of DKK 474 million compared to an income of DKK 458 million in the same period of 2007. This development reflects gains on foreign exchange hedging activities due to the lower value of especially US dollars versus Danish kroner. Foreign exchange hedging gains of around DKK 900 million have been deferred for future income recognition, hereof approximately DKK 500 million for income recognition in the second half of 2008.

Free cash flow

The free cash flow for the first half of 2008 was realised at DKK 5,384 million compared to DKK 2,926 million in the first half of 2007. Part of the increase in free cash flow is related to timing in accounts receivable payments in the US due to a change in Novo Nordisk's distribution set-up effective 1 July 2008, but also reflects the lower than expected investment level in the first half of 2008. The timing in accounts receivable payments in the US impacted the first half 2008 free cash flow positively by around DKK 300 million.

Outlook 2008

The current expectations for 2008 are summarised and compared to the previous expectations in the table below (changes highlighted in bold and italic):


+-------------------------------------------------------------------+
| Expectations are as   |       Current       |      Previous       |
| reported, if not      |    expectations     |    expectations     |
| otherwise stated      |    7 August 2008    |    30 April 2008    |
|-----------------------+---------------------+---------------------|
| Sales growth          |                     |                     |
|   -  in local         |       11-13%        |       10-13%        |
| currencies            | Around 6 percentage | Around 6 percentage |
|   - as reported       |    points lower     |    points lower     |
|-----------------------+---------------------+---------------------|
| Operating profit      |                     |                     |
| growth                |     Around 25%      |    Close to 25%     |
|   - underlying        |       22-25%        | Slightly more than  |
|   - as reported       |                     |         20%         |
|-----------------------+---------------------+---------------------|
| Net financial income  |   DKK 800 million   |   DKK 600 million   |
|-----------------------+---------------------+---------------------|
| Effective tax rate    |  Approximately 24%  |  Approximately 24%  |
|-----------------------+---------------------+---------------------|
| Capital expenditure   |  Lower than DKK 2   |    Around DKK 2     |
|                       |       billion       |       billion       |
|-----------------------+---------------------+---------------------|
| Depreciation,         |   Around DKK 2.5    |   Around DKK 2.5    |
| amortisation and      |       billion       |       billion       |
| impairment losses     |                     |                     |
|-----------------------+---------------------+---------------------|
| Free cash flow        |   Around DKK 8.5    |    Around DKK 8     |
|                       |       billion       |       billion       |
+-------------------------------------------------------------------+


Novo Nordisk now expects a sales growth for 2008 of 11-13% measured in local currencies and around 6 percentage points lower as reported, given the current level of exchange rates. This is based on expectations of continued market penetration for Novo Nordisk's key strategic products within diabetes care and biopharmaceuticals as well as expectations of intensified competition during 2008.

The expectation for growth in reported operating profit for 2008 is increased to 22-25%. This primarily reflects the lowered expectations for the non-recurring costs in relation to the discontinuation of all pulmonary diabetes projects, which are reduced from DKK 500 million to DKK 400 million, but also reflects the revised outlook for sales growth.

Adjusted for the impact from currency and the non-recurring costs related to the discontinuation of all pulmonary diabetes projects in 2007 and 2008, underlying operating profit is now expected to grow by around 25%.

For 2008, Novo Nordisk now expects a net financial income of DKK 800 million, reflecting significant foreign exchange hedging gains, primarily related to the US dollar.

The expectation for the effective tax rate for 2008 is still 24%.

Capital expenditure is now expected to be lower than DKK 2 billion in 2008. Expectations for depreciations, amortisation and impairment losses are still around DKK 2.5 billion, whereas free cash flow is now expected to be around DKK 8.5 billion.

All of the above expectations are provided that currency exchange rates, especially the US dollar and related currencies, remain at the current level versus the Danish krone for the rest of 2008.

Novo Nordisk has hedged expected net cash flows in relation to US dollars, Japanese yen and British pounds for 16, 14 and 12 months, respectively. The financial impact from foreign exchange hedging is included in 'Net financials'.

Research and development update

Diabetes care

Novo Nordisk filed for regulatory approval of liraglutide, a once-daily human GLP-1 analogue, in the US and EU in May 2008 and in Japan in July 2008. In addition, liraglutide has now been filed for regulatory approval in Turkey, Canada, New Zealand and Australia. The applications contain documentation from an extensive clinical development programme designed to obtain the indication for use of liraglutide to treat type 2 diabetes as an adjunct to diet and exercise, both as monotherapy and in combination with commonly used antidiabetic medications.

The competitive profile of liraglutide was reinforced in a phase 3b clinical study (LEAD™ 6) in which liraglutide provided statistically significantly better blood glucose control than exenatide, a twice-daily GLP-1 analogue. The 26-week study included 464 people with type 2 diabetes who were randomised to treatment with either liraglutide once daily or exenatide twice daily, as add-on to their existing treatment consisting of metformin, sulphonylurea or a combination of both. The average HbA1c level at the beginning of the study was slightly above 8%. Patients treated with liraglutide achieved a reduction in HbA1c of more than 1.1 percentage point, compared to a reduction in HbA1c of less than 0.8 percentage point in the exenatide group, a difference which was statistically significant. Both patients treated with liraglutide and patients treated with exenatide lost on average around 3 kg during the course of the study, with a trend towards more weight loss in the liraglutide group. In the liraglutide group, the percentage of patients reporting nausea in each week fell to low single-digit numbers after 8-10 weeks, similar to the level observed in a background population. In the exenatide group, the level after 8-10 weeks of treatment remained at the level of 10%. As expected, the overall rate of hypoglycaemia in the study was low.

Novo Nordisk has initiated a 26-week phase 3b study comparing the effect of liraglutide with sitagliptin, a DPP-IV inhibitor, in people with type 2 diabetes inadequately controlled with metformin alone. Two doses of liraglutide (1.2 and 1.8 mg once daily) in combination with metformin will be compared to sitagliptin (100 mg) in combination with metformin. The planned recruitment is 650 people with type 2 diabetes, and the study is expected to be completed in the second quarter of 2009.

Significant sustained weight loss was reported after 52 weeks in a 32-week open-label extension of a 20-week phase 2 obesity study, in which treatment with liraglutide was tested in obese people without diabetes. 398 participants continued into the 32-week extension. After 52 weeks, liraglutide given once daily at the highest dose led to a mean weight loss from baseline of around 7.5-8.0 kg and a placebo-adjusted weight loss of around 5.5-6.0 kg. Around 75% of the people treated with the highest dose of liraglutide achieved a weight loss larger than 5% compared to only around 25% of the people in the placebo group. Of all patients participating in the extension study, around 30% showed signs of prediabetes at randomisation. After one year of being treated, around 80% of this prediabetes subgroup of patients treated with the highest dose of liraglutide no longer showed any signs of prediabetes. Liraglutide was generally well tolerated and the proportion of people that withdrew due to side effects was below 15%.

Novo Nordisk has initiated a phase 2 clinical study with the longer-acting human GLP-1 analogue, NN9535, designed for once-weekly treatment. The phase 2 clinical study is expected to enrol 360 patients and will evaluate the efficacy and safety of NN9535. The phase 2 trial is expected to be completed in the first half of 2009.

As communicated in June, Novo Nordisk has received approval by the US Food and Drug Administration (FDA) of PrandiMet™, a fixed-dose combination of the fast-acting insulin secretagogue repaglinide and metformin for the treatment of type 2 diabetes. PrandiMet™ was approved as an adjunct to diet and exercise to improve glycaemic control in adults with type 2 diabetes who are already treated with a meglitinide (such as Prandin®) and metformin or who have inadequate glycaemic control on a meglitinide alone or metformin alone.

Biopharmaceuticals

As communicated in June, Novo Nordisk has decided to discontinue the phase 3 clinical study with NovoSeven® for the treatment of bleeding in patients with severe trauma. The decision was made based on the results of an analysis for futility conducted by the independent Data Monitoring Committee. The primary efficacy endpoint of the study was mortality and morbidity. Due to an observed lower mortality than anticipated in the overall study group (around 10% in the phase 3 study in total compared to more than 25% in the phase 2 trial), a futility analysis was conducted to assess the likelihood of reaching a successful outcome on the primary endpoint. The analysis predicted a low likelihood of obtaining a positive trial outcome with the planned study population, and as a consequence Novo Nordisk decided to discontinue the study. The decision was not due to safety concerns.

Going forward, Novo Nordisk's haemostasis research will focus on new treatments for haemophilia. Research activities outside the haemophilia area, which involve 25 employees at the company's research site in New Brunswick, New Jersey, will be terminated and, as a consequence, the site will be closed down.

As previously communicated, Novo Nordisk will increase and focus its activities on inflammatory diseases. An integral part of this new focus will be the establishment of a US research site in Seattle, Washington, with focus on research within inflammatory diseases. Novo Nordisk expects to employ approximately 80 people at the research site by 2010.

Novo Nordisk has initiated a phase 2 clinical study with a long-acting human growth hormone analogue designed for once-weekly treatment. The phase 2 clinical study will evaluate safety and tolerability in 32 patients and is expected to report in the first half of 2009.

Equity

Total equity was DKK 33,046 million at the end of the first six months of 2008, equal to 68.2% of total assets, compared to 67.4% at the end of 2007. Please refer to appendix 6 for further elaboration of changes in equity during the first six months of 2008.

Treasury shares and share repurchase programme

As per 6 August 2008, Novo Nordisk A/S and its wholly-owned affiliates owned 18,015,430 of its own B shares, corresponding to 3% of the total share capital. The reduction in the ownership of own shares reflects the cancellation of 12,960,000 B shares, which took place on 13 June 2008 following a decision at the annual general meeting earlier this year.

In 2008, under the Safe Harbour rules Novo Nordisk repurchased 6,311,907 B shares equal to a cash value of DKK 2.0 billion. The Board of Directors has approved an increase by DKK 1 billion in the ongoing DKK 16.5 billion share repurchase programme, bringing the total value of the share repurchase programme to DKK 17.5 billion. The programme is still expected to be finalised before the end of 2009. As a consequence of the increase in the share repurchase programme, Novo Nordisk now expects to repurchase B shares equal to a cash value of around DKK 4.7 billion in 2008 and around DKK 5 billion in 2009. In 2006 and 2007, Novo Nordisk repurchased B shares equal to a total cash value of DKK 7.8 billion.

Sustainability issues update

Novo Nordisk ranks second in Access to Medicine Index

In June, the Access to Medicine Foundation launched a new global Access to Medicine Index in which Novo Nordisk ranks as the second best performing pharmaceutical company. The Index has been established as a tool for investors to select pharmaceutical companies on the basis of their ability to provide improved access to medicines and healthcare to underprivileged people - mostly with a focus on developing countries. The rationale is that companies' ability to address this key issue may affect their licence to operate as well as their prospects for growing the business in emerging economies. The Index is based on a thorough assessment of management strategies, programmes and implementation conducted by Innovest, a global investment research firm specialising in sustainability indicators, with inputs from stakeholders, publicly available information and interviews with company representatives.

Legal issues update

United Nations Oil-for-Food Programme

On 27 June 2008, the Republic of Iraq filed a complaint in the US District Court for the Southern District of New York against 93 defendants seeking relief in law or equity based on various charges on corruption in connection with the United Nations Oil-for-Food Programme. Novo Nordisk is one of the named defendants in this action. Novo Nordisk is rejecting the corruption charges. Novo Nordisk has previously conducted an internal investigation - assisted by a US law firm - in relation to its participation in the Oil-for-Food Programme, which has concluded that no wrongdoings have been made.

US hormone therapy litigation

As of 6 August 2008, Novo Nordisk Inc., as well as the majority of hormone therapy product manufacturers in the US, is a defendant in product liability lawsuits related to hormone therapy products. These lawsuits currently involve a total of 49 individuals who allege use of a Novo Nordisk hormone therapy product. These products (Activella® and Vagifem®) have been sold and marketed in the US since 2000. Until July 2003, the products were sold and marketed exclusively in the US by Pharmacia & Upjohn Company (now Pfizer Inc.). A further 27 individuals currently allege, in relation to similar lawsuits against Pfizer Inc., that they have also used a Novo Nordisk hormone therapy product. Novo Nordisk does not have any court trials scheduled for 2008 and does not presently expect to have a trial before late 2008. Novo Nordisk does not expect the pending claims to impact Novo Nordisk's financial outlook.

Capital Markets Day

Novo Nordisk will invite analysts and institutional investors to a Capital Markets Day on 26 September 2008 for an update on the company's overall strategy as well as key operational and R&D value drivers. All investors will be able to follow the Capital Markets Day via a live webcast, which will be made available under the 'Investors' section of novonordisk.com.

Conference call details

At 13.00 CET today, corresponding to 7.00 am New York time, a conference call will be held. Investors will be able to listen in via a link on novonordisk.com, which can be found under 'Investors - Download centre'. Presentation material for the conference call will be made available approximately one hour before on the same page.

Forward-looking statement

Novo Nordisk's reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company's Annual Report 2007 and Form 20-F both filed with the SEC in February 2008, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements.

Words such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy', 'prospect', 'foresee', 'estimate', 'guidance', 'project', 'anticipate', 'can', 'intend' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward looking statements. Examples of such forward-looking statements include, but are not limited to (i) statements of plans, objectives or goals for future operations, including those related to Novo Nordisk's products, product research, product introductions and product approvals as well as cooperations in relation thereto, (ii) statements containing projections of revenues, income (or loss), earnings per share, capital expenditures, dividends, capital structure or other net financials, (iii) statements of future economic performance , future actions and outcome of contingencies such as legal proceedings, and (iv) statements of the assumptions underlying or relating to such statements. In this document, examples of forward-looking statements can be found on the first page and under the headings 'Outlook 2008', 'Research and development update' and 'Legal issues update'.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those in this document, could cause actual results to differ materially from those contained in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions including interest rate and currency exchange rate fluctuations, delay or failure of development projects, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk's products, introduction of competing products, reliance on information technology, Novo Nordisk's ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance. Please also refer to 'business strategy, opportunities and key risks' on pp 8-9 of the Annual Report 2007 available on our website (novonordisk.com).

Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.

Management statement

Today, the Board of Directors and Executive Management reviewed and approved the interim report and accounts of Novo Nordisk A/S for the first six months of 2008.

The interim report and accounts have been prepared in accordance with International Financial Reporting Standards and the additional Danish disclosure requirements applying to listed companies' interim reports and accounts.

In our opinion the accounting policies used are appropriate and the overall presentation of the interim report and accounts is adequate. Furthermore, in our opinion the interim report and accounts give a true and fair view of the Group's assets, liabilities, financial position and of the results of the operations and consolidated cash flows for the period under review.

Bagsvaerd 7 August 2008


Executive Management:

  Lars Rebien Sørensen  Jesper Brandgaard
  President and CEO     CFO

  Lise Kingo            Kåre Schultz          Mads Krogsgaard Thomsen

Board of Directors:

  Sten Scheibye         Göran A Ando
  Chairman              Vice chairman

  Kurt Briner           Henrik Gürtler        Johnny Henriksen

  Pamela Kirby          Anne Marie Kverneland Kurt Anker Nielsen

  Søren Thuesen
  Pedersen              Stig Strøbaek          Jørgen Wedel


Contacts for further information


Media:                          Investors:

Mike Rulis                      Mads Veggerby Lausten
Tel (direct): (+45) 4442 3573   Tel (direct): (+45) 4443 7919
E-mail: mike@novonordisk.com    E-mail: mlau@novonordisk.com

                                Hans Rommer
                                Tel (direct): (+45) 4442 4765
In North America:               E-mail: hrmm@novonordisk.com
Sean Clements
Tel (direct): (+1) 609 514 8316
E-mail: secl@novonordisk.com


Further information on Novo Nordisk is available on the company's internet homepage at the address: novonordisk.com



Appendix 1 - Quarterly numbers in DKK

(Amounts in DKK million, except number of employees,
earnings per share and number of shares outstanding.)
                                                                    %
                                                               change
                                                                   Q2
                                                                 2008
                    2008                    2007                   vs
                                                                   Q2
                  Q2     Q1       Q4      Q3     Q2     Q1       2007

Sales           11,110 10,614    10,946 10,504 10,563  9,818       5%

Gross profit     8,556  8,201     8,345  7,990  8,205  7,498       4%
Gross margin     77.0%  77.3%     76.2%  76.1%  77.7%  76.4%

Sales and
distribution
costs            3,178  2,975     3,220  2,993  3,110  3,048       2%
Percent of       28.6%  28.0%     29.4%  28.5%  29.4%  31.0%
sales
Research
and
development
costs            1,980  1,858     3,413  1,724  1,754  1,647      13%
- Hereof cost                                -      -      -
related to
discontinuation
of all
pulmonary
projects*        (155)  (220)   (1,325)                             -
Percent of       17.8%  17.5%     31.2%  16.4%  16.6%  16.8%
sales
Percent of       16.4%  15.4%     19.1%  16.4%  16.6%  16.8%
sales
(excl. AERx®)
**
Administrative
expenses           626    627       677    623    594    614       5%
Percent of        5.6%   5.9%      6.2%   5.9%   5.6%   6.3%
sales
Licence fees
and other
operating
income (net)        74     88        92     31     60    138      23%

Operating
profit           2,846  2,829     1,127  2,681  2,807  2,327       1%
Operating        25.6%  26.7%     10.3%  25.5%  26.6%  23.7%
margin
Operating
profit
(excl. AERx®)
**               3,001  3,049     2,452  2,681  2,807  2,327       7%
Operating        27.0%  28.7%     22.4%  25.5%  26.6%  23.7%
margin
(excl. AERx®)
**

Share of
profit/
(loss) in
associated
companies          (3)   (67)         0   (57)  1,350   (60)        -
Financial
income             429    474       375    322    297    309      44%
Financial
expenses            21    368       155     90     60    202     -65%

Profit before
income taxes     3,251  2,868     1,347  2,856  4,394  2,374     -26%

Net profit       2,471  2,180       977  2,184  3,652  1,709     -32%

Depreciation,
amortisation
and
impairment
losses             567    563     1,396    586    516    509      10%
Depreciation,
amortisation,
etc
(excl. AERx®)
**                 567    563       526    586    516    509      10%
Capital
expenditure        328    214       719    597    508    444     -35%
Cash flow
from operating
activities       2,916  3,070     2,498  3,500  1,438  2,551     103%
Free cash
flow             2,589  2,795     3,198  2,888    826  2,100     213%

Equity          33,046 31,251    32,182 33,161 33,475 29,676      -1%
Total assets    48,478 47,534    47,731 48,423 48,300 44,742       0%
Equity ratio     68.2%  65.7%     67.4%  68.5%  69.3%  66.3%

Full-time
employees at
the end of the
period          26,060 25,765    25,516 25,206 24,729 24,045       5%

Basic
earnings
per share
(in DKK)          3.99   3.51      1.56   3.46   5.75   2.69     -31%
Diluted
earnings
per share
(in DKK)          3.96   3.48      1.55   3.43   5.71   2.68     -31%
Average
number of
shares
outstanding
(million)***     618.6  620.9     624.4  632.0  635.8  635.0      -3%
Average
number of
shares
outstanding
incl
dilutive effect
of options
'in the money'
(million)***     623.5  626.3     629.6  636.4  640.2  639.4      -3%

Sales by
business
segments:
   Modern
insulins
(insulin
analogues)       4,103  3,821     3,911  3,568  3,464  3,065      18%
   Human
insulins         2,966  2,939     3,116  3,098  3,222  3,136      -8%
   Insulin-
related
sales              460    443       448    445    437    419       5%
   Oral
antidiabetic
products
(OAD)              478    640       512    585    529    523     -10%
   Diabetes
care total       8,007  7,843     7,987  7,696  7,652  7,143       5%

   NovoSeven®    1,648  1,440     1,519  1,427  1,508  1,411       9%
   Growth
hormone
therapy            986    878       925    878    924    784       7%
   Hormone
replacement
therapy            391    385       437    414    411    406      -5%
   Other
products            78     68        78     89     68     74      15%
   Biopharma-
ceuticals total  3,103  2,771     2,959  2,808  2,911  2,675       7%

Sales by
geographic
segments:
   Europe        4,400  4,061     4,348  4,036  4,035  3,931       9%
   North
America          3,467  3,450     3,608  3,500  3,424  3,214       1%

International
Operations       2,069  2,096     1,776  1,870  1,953  1,696       6%
   Japan &
Oceania          1,174  1,007     1,214  1,098  1,151    977       2%

Segment
operating
profit:
   Diabetes
care             1,510  1,672      (75)  1,487  1,600  1,247      -6%
   Diabetes
care
(excl. AERx®)**  1,665  1,892     1,250  1,487  1,600  1,247       4%
   Biopharma-
ceuticals        1,336  1,157     1,202  1,194  1,207  1,080      11%

*) Including costs related to the discontinuation of
AERx®
and all other pulmonary diabetes projects.
**) Excluding costs related to the discontinuation of AERx®
and all other pulmonary diabetes projects.
***) For Q2 2008 the exact numbers of 'Average number of
shares outstanding' and 'Average number of shares outstanding
 incl dilutive effect of options 'in the money'' are
618,620,123
and 623,530,586 respectively.



Appendix 2 - Quarterly numbers in EUR


(Amounts in EUR million, except number of employees,
earnings per share and number of shares outstanding.)
Key figures are translated into EUR as supplementary
information - the translation is based on average exchange
rate
for income statement and exchange rate at the
balance
sheet date for balance sheet items.
                                                                    %
                                                               change
                                                                   Q2
                                                                 2008
                     2008                   2007                   vs
                                                                   Q2
                   Q2     Q1       Q4     Q3     Q2     Q1       2007

Sales             1,489  1,424    1,468  1,411  1,418  1,317       5%

Gross profit      1,147  1,100    1,119  1,074  1,101  1,006       4%
Gross margin      77.0%  77.3%    76.2%  76.1%  77.7%  76.4%

Sales and
distribution
costs               426    399      432    402    417    409       2%
Percent of        28.6%  28.0%    29.4%  28.5%  29.4%  31.0%
sales
Research and
development
costs               266    249      458    232    235    221      13%
- Hereof costs                               -      -      -
related to
discontinuation
of all
pulmonary
 projects*         (20)   (30)    (178)                             -
Percent of        17.8%  17.5%    31.2%  16.4%  16.6%  16.8%
sales
Percent of        16.4%  15.4%    19.1%  16.4%  16.6%  16.8%
sales
(excl. AERx®)
**
Administrative
expenses             84     84       91     84     80     82       5%
Percent of         5.6%   5.9%     6.2%   5.9%   5.6%   6.3%
sales
Licence fees
and other
operating
income (net)         10     12       12      4      8     19      23%

Operating
profit              381    380      151    360    377    312       1%
Operating         25.6%  26.7%    10.3%  25.5%  26.6%  23.7%
margin
Operating
profit (excl.
AERx®)**            401    410      329    360    377    312       7%
Operating         27.0%  28.7%    22.4%  25.5%  26.6%  23.7%
margin
(excl. AERx®)
**

Share of profit/
(loss) in
associated
companies             0    (9)        0    (7)    181    (8)        -
Financial
income               57     64       49     44     40     41      44%
Financial
expenses              3     49       21     12      8     27     -65%

Profit before
income taxes        436    385      180    384    589    319     -26%

Net profit          332    292      131    294    490    229     -32%

Depreciation,
amortisation
and impairment
losses               76     76      188     78     70     68      10%
Depreciation,
amortisation,
etc (excl AERx®)
**                   76     76       71     78     70     68      10%
Capital
expenditure          44     29       96     80     68     60     -35%
Cash flow from
operating
activities          391    412      335    470    193    342     103%
Free cash
flow                347    375      430    387    111    282     213%

Equity            4,431  4,191    4,316  4,449  4,498  3,983      -1%
Total assets      6,500  6,375    6,401  6,496  6,490  6,005       0%
Equity ratio      68.2%  65.7%    67.4%  68.5%  69.3%  66.3%

Full-time
employees at
the end of the
period           26,060 25,765   25,516 25,206 24,729 24,045       5%

Basic earnings
per share
(in EUR)           0.54   0.47     0.21   0.47   0.77   0.36     -31%
Diluted earnings
per share
(in EUR)           0.53   0.47     0.21   0.47   0.76   0.36     -31%
Average number
of shares
outstanding
(million)***      618.6  620.9    624.4  632.0  635.8  635.0      -3%
Average number
of shares
outstanding incl
dilutive effect
of
options 'in the
money' (million)
***               623.5  626.3    629.6  636.4  640.2  639.4      -3%

Sales by
business
segments:
   Modern
insulins
(insulin
analogues)          550    513      525    479    465    411      18%
   Human
insulins            398    394      418    416    432    421      -8%

Insulin-related
sales                62     59       60     60     59     56       5%
   Oral
antidiabetic
products (OAD)       64     86       68     79     71     70     -10%
   Diabetes care
total             1,074  1,052    1,071  1,034  1,027    958       5%

   NovoSeven®       221    193      204    191    203    189       9%
   Growth
hormone
therapy             132    118      124    118    124    105       7%
   Hormone
replacement
therapy              52     52       59     55     56     54      -5%
   Other
products             11      9       10     12      9     10      15%
   Biopharma-
ceuticals total     416    372      397    376    392    358       7%

Sales by
geographic
segments:
   Europe           590    545      583    542    542    527       9%
   North America    465    463      484    470    460    431       1%
   International
Operations          278    281      238    251    262    228       6%
   Japan &
Oceania             157    135      163    147    155    131       2%

Segment
operating
profit:
   Diabetes care    203    224     (10)    200    215    167      -6%
   Diabetes care
(excl. AERx®)**     223    254      168    200    215    167       4%
   Biopharma-
ceuticals           179    155      162    160    162    145      11%

*) Including costs related to the discontinuation of
AERx®
and all other pulmonary diabetes projects.
**) Excluding costs related to the discontinuation of
AERx®
and all other pulmonary diabetes projects.
***) For Q2 2008 the exact numbers of 'Average number of
shares outstanding' and 'Average number of shares outstanding
 incl dilutive effect of options 'in the money''
are 618,620,123 and 623,530,586 respectively.



Appendix 3 - Income statement

                                  H1         H1             Q2     Q2
DKK million                     2008       2007           2008   2007


Sales                         21,724     20,381         11,110 10,563
Cost of goods
sold                           4,967      4,678          2,554  2,358
Gross profit                  16,757     15,703          8,556  8,205

Sales and
distribution costs             6,153      6,158          3,178  3,110
Research and
development costs              3,838      3,401          1,980  1,754
- hereof costs
related to
discontinuation of
all pulmonary
projects                       (375)          -          (155)      -
Administrative
expenses                       1,253      1,208            626    594
Licence fees and
other operating
income (net)                     162        198             74     60
Operating profit               5,675      5,134          2,846  2,807

Share of
profit/(loss) in
associated
companies                       (70)      1,290            (3)  1,350
Financial income                 903        606            429    297
Financial expenses               389        262             21     60
Profit before
income taxes                   6,119      6,768          3,251  4,394

Income taxes                   1,468      1,407            780    742
NET PROFIT                     4,651      5,361          2,471  3,652



Basic earnings
per share (DKK)                 7.50       8.44           3.99   5.75
Diluted earnings
per share (DKK)                 7.44       8.38           3.96   5.71


Segment sales:
   Diabetes care              15,850     14,795          8,007  7,652
   Biopharmaceuticals          5,874      5,586          3,103  2,911

Segment
operating profit:
   Diabetes care               3,182      2,847          1,510  1,600
    Operating margin           20.1%      19.2%          18.9%  20.9%

   Diabetes care
(excl. AERx®)*                 3,557      2,847          1,665  1,600
    Operating margin           22.4%      19.2%          20.8%  20.9%
(excl. AERx®)*

   Biopharmaceuticals          2,493      2,287          1,336  1,207
    Operating margin           42.4%      40.9%          43.1%  41.5%

*) Excluding costs related to the discontinuation of AERx® and
all other pulmonary diabetes projects.



Appendix 4 - Balance sheet


DKK million                     30 Jun 2008 31 Dec 2007

ASSETS

Intangible assets                       802         671
Property, plant and equipment        19,001      19,605
Investments in associated
companies                               239         500
Deferred income tax assets            2,008       2,522
Other financial assets                  207         131
TOTAL LONG-TERM ASSETS               22,257      23,429

Inventories                           9,240       9,020
Trade receivables                     6,245       6,092
Tax receivables                         200         319
Other receivables                     1,769       1,493
Marketable securities and
financial derivatives                 2,739       2,555
Cash at bank and in hand              6,028       4,823
TOTAL CURRENT ASSETS                 26,221      24,302

TOTAL ASSETS                         48,478      47,731


EQUITY AND LIABILITIES

Share capital                           634         647
Treasury shares                        (17)        (26)
Retained earnings                    31,152      30,661
Other comprehensive income            1,277         900
TOTAL EQUITY                         33,046      32,182

Long-term debt                          930         961
Deferred income tax liabilities       2,215       2,346
Provision for pensions                  398         362
Other provisions                        864       1,239
Total long-term liabilities           4,407       4,908

Short-term debt and financial
derivatives                             463         405
Trade payables                        1,611       1,947
Tax payables                            835         929
Other liabilities                     5,632       4,959
Other provisions                      2,484       2,401
Total current liabilities            11,025      10,641

TOTAL LIABILITIES                    15,432      15,549

TOTAL EQUITY AND
LIABILITIES                          48,478      47,731



Appendix 5 - Cash flow statement



DKK million                             H1 2008 H1 2007 *)


Net profit                                4,651   5.361

Adjustment for non-cash items             3,121   1.841 *)
Income taxes paid and net                 (930) (1.202) *)
interest received
Cash flow before change                   6,842   6.000
in working capital

Net change in working capital             (856) (2.011)
Cash flow from operating                  5,986   3.989
activities

Net investments in intangible             (230)   (111)
assets and long-term financial
assets
Capital expenditure for property,         (542)   (952)
plant and equipment
Net change in marketable securities           3       4
(maturity exceeding three months)
Dividend received                           170       -
Net cash used in investing                (599) (1.059)
activities

Cash flow from financing                (4,233) (2.124)
activities

NET CASH FLOW                             1,154     806

Unrealised gain/(loss) on exchange
rates and marketable securities
included in cash and cash equivalents        14    (19)
Net change in cash and cash               1,168     787
equivalents

Cash and cash equivalents at the          4,617   2.985
beginning of the year
Cash and cash equivalents at              5,785   3.772
the end of the period

Bonds with original term to maturity      1,471     994
exceeding three months
Undrawn committed credit facilities       7,458   7.442
FINANCIAL RESOURCES AT THE               14,714  12.208
END OF THE PERIOD


Cash flow from operating activities       5,986   3.989
+ Net cash used in investing activities   (599) (1.059)
-  Net change in marketable securities        3       4
(maturity exceeding three months)
FREE CASH FLOW                            5,384   2.926

*) Subtotals for 'Adjustment for non-cash items'
and 'Income taxes paid and net interest received'
were allocated incorrectly in the financial statement
for the period 1 January 2007 to 30 June 2007 and
have now been changed from DKK 390 million to
DKK 1,841 million and from DKK 249 million to
minus DKK 1,202 million, respectively.



Appendix 6 - Statement of changes in equity


                                              Other
                                             compre-
                                             hensive
                                             income
                Share  Trea-     Re-     Ex-     De-   Other   Total
              capital   sury  tained  change  ferred adjust-
                      shares    ear-    rate   gain/   ments
                               nings adjust-    loss
                                       ments on cash
                                                flow
                                              hedges
DKK million

H1 2008

Balance at
the
beginning
of the year       647   (26)  30,661     209     691       0  32,182
Exchange
rate
adjustment
of
investments
in
subsidiaries                             124                     124
Deferred
(gain)/loss
on cash
flow hedges
at the
beginning of
the year
recognised
in the
income
statement
for the
period                                         (481)           (481)
Changes of
fair value
on cash
flow hedges
during the
period                                           708             708
Fair value
adjustments
on financial
assets
available
for sale                                                  30      30
Novo
Nordisk
share of
equity
recognised
by
associated
companies                                                 14      14
Other
adjustments                                             (18)    (18)
Net income
recognised
directly
in equity           -      -       -     124     227      26     377
Net profit
for the
period                         4,651                           4,651
Total
income
for the
period              -      -   4,651     124     227      26   5,028
Share-
based
payment                           69                              69
Purchase
of treasury
shares                   (5) (1,517)                         (1,522)
Sale of
treasury
shares                     1      83                              84
Reduction
of the
B share
capital          (13)     13                                       -
Dividends                    (2,795)                         (2,795)
Balance
at the
end of the
period            634   (17)  31,152     333     918      26  33,046


H1 2007

Balance
at the
beginning
of the
year              674   (39)  28,810     156     420     101  30,122
Exchange
rate
adjustment
of
investments
in
subsidiaries                              79                      79
Deferred
(gain)/loss
on cash
flow hedges
at the
beginning
of the year
recognised
in the
income
statement
for the
period                                         (287)           (287)
Changes
of fair
value on
cash flow
hedges
during
the period                                       237             237
Fair value
adjustments
on financial
assets
available for
sale                                                       5       5
Novo
Nordisk
share of
equity
recognised
by
associated
companies                                                 19      19
Net income
recognised
directly
in equity           -      -       -      79    (50)      24      53
Net profit
for the
period                         5,361                           5,361
Total
income for
the period          -      -   5,361      79    (50)      24   5,414
Share-
based
payment                           54                              54
Purchase of
treasury
shares                          (79)                            (79)
Sale of
treasury
shares                     1     184                             185
Reduction
of the
B share
capital          (27)     27                                       -
Dividends                    (2,221)                         (2,221)
Balance
at the
end of
the period        647   (11)  32,109     235     370     125  33,475


Company Announcement no 49 / 2008





Copyright © Hugin AS 2008. All rights reserved.

Contact Information