Revenue, Profit, And Loss of Novo Nordisk in 2012

"In 1923, the first patients were treated with insulin from the company that is now Novo Nordisk" (CEO Lars Rebien Sørensen). For 90 years, a little less than a Century, Novo Nordisk has been the lead provider of Insulin. And, though governments keep insisting on price reductions, Novo was able to obtain a noticeable increase of 12% in revenue in 2012. This increase was mainly due to the great demand for their key products: Victoza, Novolog, and Levemir. Novo Nordisk's main market for 2012 was North America. Why? This is mainly because obesity is the main cause for type 2 diabetes, which is treated with either Novolog and Levemir (19% of all sales took place in North America alone). Moreover, Novo was able to get approval for many new medications that were sold all over the world. Examples of this consist of: Tresiba® and Ryzodeg®. Even though these drugs are currently only sold in Japan, the approval and selling of these new products accounted to 15% os all sales in 2012. And, lastly, international operations increased by 16%.

So, how is it that a company, in the pharmaceutical industry, had such a positive outcome in a time when governments are insisting on price reductions which would, in theory, affect negatively on company revenue? According to the 2012 Annual Report, Novo Nordisk stepped back and tried to take a different approach to diabetic medication. Last year, in the European Diabetes Leadership Forum, Novo Nordisk met with other 700 participants to discuss and agree on priorities and ambitions in order to better include their medication into healthcare programs and meet federal price requirements. This, in turn, not only helped them stay in line with laws, but also allowed them to achieve noticeable growth. 

However, not everything was smiles and rainbows for the company in 2012. They received a regulatory warning by the FDA in march of 2012. They answered to the letter by December of the same year. Moreover, the drug vactreptacog alfa was discontinued in August due to safety concern. In response to this, Novo faced a 6% drop from expected sales in the las quarter of 2012. So, how does Novo plan on recovering from this fall? They plan to further expand sales of modern insulin drugs (like Tresiba® and Ryzodeg®) in the United States, Canada, and Europe. 

After analyzing the Financial Statement fro 2012 I learned that there was a 2.81% increase in assets, a 6.91 decrease in liabilities, and dividends increased by 9.91%. These numbers represent a healthy growth in the company. 

What do these numbers mean when compared to other companies in the Industry? Let's take Abbott Laboratories as a comparison. Abbott had a 6% increase in Net Income in 2012 and 3 billion increase in Operating Cash Flows. Numbers may not be as impressive for Abott, but one must still take into consideration that they integrateed AbbVie, a research and investigation, independent and competitive company into the Pharmaceutical and Healthcare industry. This is estimated to provide future growth and revenue in the next few years. Even more so than Novo Nordisk. This is mainly due to the fact that trends signal that companies that are investing in research now will have the healthiest growth. After looking at Novo's Financial Statement and Annual Report, they show no sign of drifting away from their one and only product: Insulin. This is mainly the reason why analysts agree that Novo is having healthy growth now, but since they show no sign of investing in biotechnology research, the growth will stagger in a couple of years. 

References:
http://webmedia.novonordisk.com/nncom/images/annual_report/2012/Novo-Nordisk-AR-2012-en.pdf
Abbot Annual Report 2012
Novo Nordisk Financial Statements by Yahoo Finance