NOVO NORDISK , SANOFI – Tresiba and Ryzodeg delayed in the US: Lantus protected – Reduce PT to DKK 950

Date: 2015-07

Post complete response letter issued by the USFDA to NOVOB for Tresiba and Ryzodeg, we reduce our PT for NOVOB from DKK 1000 to DKK 950. Considering the US constitutes the biggest long acting insulin market (Lantus-US sales: $4b; Western EU: $1.0b; RoW: $400m; Emerg mkt: $1.0b), the CRL has clouded the optimism over revenue potential of this important pipeline asset. We had forecasted a slow ramp up and peak sales of $1.5b (incremental sales for Tresiba / Ryzodeg excluding cannibalization of Levemir), which we now reduce to $500million. Although the delay does not have any impact on near term earnings, but has long term implications for market share in a competitive next generation insulin market. We expect a 3-4 years delay would put NOVOB behind SAN and LLY in the launch of next generation insulin.

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