Summary of Conference Call Records Company and Industry Involved - **Company**: Novo Nordisk - **Industry**: Pharmaceutical, specifically focusing on GLP-1 drugs for diabetes and obesity treatment Key Points and Arguments 1. **Sales Performance of Semaglutide**: In Q1 2025, Semaglutide achieved global sales of 55.776 billion Danish Krone, equivalent to 7.864 billion USD, representing a year-over-year growth of 32.17% [1] 2. **Revenue Contribution**: Semaglutide's sales accounted for approximately 71% of Novo Nordisk's total revenue [1] 3. **Comparison with Merck's Drug**: Merck's drug, known as K drug, reported global sales of 7.2 billion USD in Q1 2025, showing a growth of 4% year-over-year. Semaglutide's sales exceeded K drug by 664 million USD in the same quarter [1] 4. **Market Position of GLP-1 Drugs**: GLP-1 active pharmaceutical ingredients are currently leading the global market [1] Additional Important Content 1. **Regulatory Approvals**: The FDA has approved the abbreviated new drug application (ANDA) for Liraglutide injection (18mg/3mL) submitted by Hanyu Pharmaceutical and Hikma, with a total contract value of 46.4 million USD [2] 2. **Market Expectations for Abenatide**: Abenatide injection, a long-acting GLP-1 drug targeting type 2 diabetes, has had its market application accepted by the National Medical Products Administration, with positive expectations for its use in glucose control and potential weight loss [2] 3. **Innovative Drug Development**: Innovent Biologics' dual agonist, Masitide, is at the forefront of domestic GLP-1 innovative drugs, with two new drug applications (NDA) accepted for obesity management and type 2 diabetes treatment, with weight loss indications expected to be approved in the first half of next year [2] 4. **Clinical Trials**: RAY1225 injection has completed Phase II clinical trials for obesity/overweight and type 2 diabetes patients, achieving primary endpoint results [3]

Summary of Key Points from Conference Call Records Industry or Company Involved - **Domestic Aircraft Manufacturing**: Focus on the C919 aircraft and its potential to replace Boeing's market share in Europe [2][3] - **Military Trade**: Insights into the military trade dynamics between India and Pakistan, and the implications for Chinese military exports [4][5][6] - **Pharmaceuticals**: Discussion on the global sales of semaglutide and its impact on the obesity treatment market [8][9] - **Chemical Industry**: Analysis of the price movements in the chemical sector, particularly ethylene glycol and its derivatives [12][13][14] - **Textiles**: Overview of the textile industry, particularly the impact of U.S.-China trade relations on exports [15] - **Technology and Automation**: Developments in automated equipment and smart transportation solutions [20][21] Core Points and Arguments Domestic Aircraft Manufacturing - The C919 aircraft is expected to capture part of Boeing's market share in Europe due to potential tariffs on Boeing products [2] - China Commercial Aircraft Corporation (COMAC) plans to increase C919 production capacity significantly from 75 to 200 aircraft by 2029, a 33% increase compared to 2027 [2] - The Airbus Tianjin assembly line exemplifies successful Sino-European aviation cooperation [2] Military Trade - The escalation of armed conflict between India and Pakistan has implications for military trade, with Pakistan being a major recipient of Chinese military exports [4] - China’s military products have gained a significant market share globally, with Pakistan accounting for over 50% of China's military exports from 2017 to 2024 [4] - Key companies involved in military trade include Aerospace Changfeng and other defense contractors [4][5][6] Pharmaceuticals - Semaglutide has surpassed K drug in global sales, indicating a strong market for obesity treatments [8] - Novo Nordisk reported a 19% increase in net sales, with semaglutide sales growing by 85% [8] - Related companies include Changshan Pharmaceutical and Jin Kai Biotechnology, which are involved in the production of similar drugs [9] Chemical Industry - Ethylene glycol prices have risen by 1.47%, driven by supply constraints and increased demand [12] - Danhua Technology is a key player in the ethylene glycol market, with a production capacity of 132,000 tons [12] - The chemical sector is experiencing a surge due to rising prices of various chemical products [13][14] Textiles - The U.S. Treasury's comments on trade relations may ease the impact of tariffs on textile exports [15] - Huafang Co. has a significant share of the global market for lyocell fabrics, with a focus on sustainable production [15] - The company reported that 40% of its business is linked to the U.S. market, highlighting its international exposure [15] Technology and Automation - Maiwei Co. has developed automated wafer-level hybrid bonding equipment, marking a significant advancement in manufacturing technology [20] - The company is positioned to benefit from the growing demand for advanced packaging solutions in the semiconductor industry [20] - Dayang Group's recent announcement regarding the lifting of an investigation by the U.S. Department of Commerce is expected to positively impact its export orders [21] Other Important but Possibly Overlooked Content - The potential for increased cooperation between China and Russia in various sectors, including military and technology, was mentioned [18] - The impact of geopolitical tensions on supply chains and market dynamics was highlighted, particularly in the context of the India-Pakistan conflict [10][11] - The importance of maintaining accurate and up-to-date information in rapidly changing market conditions was emphasized throughout the documents [4][5][6][12][15]

Group 1 - Li Xiang's reported salary of 639 million yuan is inaccurate; actual compensation is 2.66 million yuan, with the majority being stock-based compensation [1] - The People's Bank of China announced a 0.5% reduction in the reserve requirement ratio and a 0.1% decrease in policy interest rates, providing approximately 1 trillion yuan in long-term liquidity [1] Group 2 - Kweichow Moutai officially announced Zhang Yixing as its first brand ambassador, aiming to attract younger consumers [2] - Skechers announced its decision to go private, clarifying that this does not affect its operations in China [2] - Changan Automobile refuted rumors of merging with Dongfeng Group and is pursuing legal action against those spreading false information [2] Group 3 - The Federal Reserve decided to maintain the federal funds rate between 4.25% and 4.50%, marking the third consecutive meeting without a rate change [3] Group 4 - SpaceX received permission to increase its Starship launch frequency from 5 to 25 times per year [4] - Samsung's Harman International acquired Masimo's audio business for $350 million, aiming to strengthen its position in the consumer audio market [4] Group 5 - Geely Auto proposed to privatize Zeekr at a price of $2.57 per share, representing a premium of approximately 13.6% over the last trading price [7] - Reading Group and Japan's CCC Group established a strategic partnership to co-create IP and open a pop-up store in Japan [8] Group 6 - Uber reported Q1 revenue of $11.533 billion, a 14% year-over-year increase, with a net profit of $1.776 billion [13] - Disney's Q2 revenue grew 7% to $23.621 billion, with adjusted EPS increasing 20% to $1.45 [13] - Novo Nordisk reported Q1 net sales of 78.087 billion Danish kroner (approximately $11.01 billion), with a growth of 18% at fixed exchange rates [14]

Group 1: Pharmaceutical Quality Control - Jiangsu Province achieved a drug inspection pass rate of 99.78% in 2024, with 3,937 varieties and 18,310 batches inspected [1] - Regulatory authorities took immediate actions against non-compliant products, including sealing, halting sales, and requiring recalls [1] Group 2: Healthcare Financing and Efficiency - Lanzhou City launched an instant settlement system for medical insurance funds, reducing the settlement period from 30 days to 1 day, significantly easing financial pressure on medical institutions [2] - As of May 6, 2023, the system processed instant settlements amounting to 3.71 million yuan [2] Group 3: Drug Approvals and Developments - BeiGene's new drug BGB-45035 received clinical trial approval for treating nodular prurigo, targeting IRAK4 [4] - AstraZeneca's BTK inhibitor Calquence, in combination with bendamustine and rituximab, was approved in the EU for treating adult patients with MCL [5] Group 4: Biopharmaceutical Financing - In April 2025, the global biopharmaceutical sector completed 139 financing activities, raising over $3.1 billion, with 20 companies securing individual financing exceeding $50 million [7] Group 5: Market Performance - Novo Nordisk reported Q1 2025 revenue of 78.09 billion Danish kroner (approximately $11.22 billion), an 18% year-on-year increase, with semaglutide generating $8.01 billion [8] - The global GLP-1 drug market is projected to exceed $60 billion in 2025, with Novo Nordisk and Eli Lilly competing for market share [8] Group 6: Strategic Partnerships - Eli Lilly entered a significant licensing agreement with Alchemab Therapeutics for the ALS drug ATLX-1282, valued at up to $415 million [10] Group 7: Market Support Initiatives - Hong Kong Stock Exchange launched a "Tech Innovation Line" to assist tech and biotech companies in the listing process [12]

Market Overview - US stock indices closed higher, with the Dow Jones up 0.7%, Nasdaq up 0.27%, and S&P 500 up 0.43% [1] - The yield on the US 10-year Treasury fell to 4.27%, a decrease of 0.698% [1] - The VIX index dropped 4.89% to 23.55, indicating reduced market volatility [1] - Brent crude oil fell 1.68% to $60.97, while spot gold decreased by 1.93% to $3364.32 per ounce [1] - The US dollar index rose by 0.65% to 99.9 [1] Federal Reserve - The Federal Reserve maintained the federal funds rate target range at 4.25%-4.5%, aligning with market expectations [2] Industry & Stocks - Most sectors in the S&P 500 saw gains, with semiconductors up 1.75%, technology up 1%, and healthcare up 0.77%. However, materials, communications, and real estate sectors declined by 0.55%, 0.18%, and 0.07% respectively [3] - Chinese concept stocks mostly fell, with KWEB down 2.83%, Alibaba down 3.47%, and Pinduoduo down 1.73%. However, TSMC rose 1.31% and Li Auto increased by 2.38% [3] - Major tech stocks had mixed results, with Nvidia up 3.1% and Amazon up 2%. In contrast, Google fell 7.51% and Apple dropped 1.14% [4] Key Focus - US Treasury Secretary Yellen announced that talks with China will begin on Saturday, indicating the discussions are just the starting point and not in-depth negotiations [5] - A report from the Consumer Technology Association predicts that tariffs could increase prices of laptops and smartphones by over 30% if exemptions are not granted [6] - Citic Securities plans to allocate investment banking personnel to Hong Kong in anticipation of a potential influx of Chinese concept stocks returning to the market [7] - The Trump administration is reportedly planning to lift AI chip restrictions imposed during the Biden era, which has faced opposition from major tech companies [8][9] - Apple plans to add AI search functionality to its browser, while also considering partnerships with AI companies [9] - Novo Nordisk reported a 19% increase in Q1 net sales to 78.087 billion Danish Krone, with its weight loss drug Wegovy sales soaring by 85% [10][11] - Disney's Q2 revenue reached $23.62 billion, exceeding expectations, while Uber's Q1 revenue grew 14% to $11.53 billion but fell short of market forecasts [13][14]

Core Viewpoint - Novo Nordisk A/S reported first-quarter 2025 earnings of 92 cents per ADR, matching expectations, but total revenues of $11.02 billion fell short of the consensus estimate of $11.33 billion, leading to a revision of sales growth guidance for 2025 from 16-24% to 13-21% [1][2][11]. Financial Performance - Revenues increased by 19% year over year in Danish kroner (DKK) and 18% at constant exchange rates, driven by higher sales in Diabetes and Obesity Care, particularly from GLP-1 products and Rare disease sales [2][3]. - The Diabetes and Obesity Care segment reported sales of DKK 73.5 billion, a 19% increase, with notable growth in fast-acting insulin Fiasp (up 44%) and Ozempic (up 15%) [5][6]. - Obesity Care sales surged 65% to DKK 18.4 billion, with Wegovy sales alone reaching DKK 17.4 billion, an 83% increase [7]. - Rare disease segment sales rose 3% to DKK 4.6 billion, with mixed performance across product categories [8]. Cost and Investment - Sales and distribution costs increased by 10% to DKK 14.9 billion, attributed to promotional activities for Wegovy and Ozempic [9]. - Research and development costs rose by 19% to DKK 10.3 billion, driven by increased clinical activities related to Diabetes and Obesity Care [10]. Market Outlook - The company anticipates strong sales growth in the U.S. and international markets, driven by rising demand for GLP-1-based treatments, especially following the FDA's resolution of Wegovy shortages [12][14]. - Novo Nordisk is addressing competition from Eli Lilly by developing new obesity treatments and has a regulatory application for oral semaglutide under review [18]. - The company is also focused on expanding access to Wegovy and curbing illegal compounding practices [14][15]. Competitive Landscape - Novo Nordisk's global diabetes market share declined by 0.6% to 33.3% due to increased competition from Eli Lilly's products [16]. - Both Novo Nordisk and Eli Lilly have announced price cuts for their obesity injections to enhance patient access [19].

Group 1 - The article promotes a weekly newsletter focused on stocks in the biotech, pharma, and healthcare industries, aimed at both novice and experienced investors [1] - The newsletter provides insights on key trends, catalysts driving valuations, product sales forecasts, and integrated financial statements for major pharmaceutical companies [1] - The author, Edmund Ingham, has over 5 years of experience in covering biotech, healthcare, and pharma, and has prepared detailed reports on more than 1,000 companies [1]

Core Viewpoint - Eli Lilly maintains a strong position in the weight loss market despite recent investor concerns triggered by CVS Health's decision to prioritize Novo Nordisk's Wegovy over Eli Lilly's Zepbound in its formularies [1][4]. Group 1: Market Dynamics - CVS Health's pharmacy benefit manager Caremark will prioritize Wegovy starting July 1, which has raised concerns about a potential price war in the weight loss drug market [2][4]. - Caremark has negotiated a lower net price for Wegovy compared to Zepbound, which could affect Eli Lilly's sales momentum [3][4]. - Wegovy's list price is $1,349 per month, while Zepbound's is $1,086, indicating a significant price difference that may influence patient choices [4]. Group 2: Company Performance - Eli Lilly's CEO David Ricks stated that the company is moving away from high list prices and large rebates to PBMs, aiming for more transparent pricing [7]. - Zepbound and Mounjaro account for over half of U.S. GLP-1 prescriptions, outperforming the combined 46% share of Wegovy and Ozempic [8]. - Despite CVS's decision, Zepbound is still growing in market share, and the overall performance of Eli Lilly in the first quarter exceeded estimates due to high demand for Zepbound and Mounjaro [10][11]. Group 3: Analyst Insights - Analysts believe the selloff of Eli Lilly's shares following CVS's announcement was exaggerated, emphasizing that both companies aim to expand patient access rather than engage in a pricing war [5][6]. - The effectiveness of Zepbound in promoting weight loss may lead some patients to seek exemptions to continue their prescriptions despite the formulary change [9]. - Larger employers may still choose to include Zepbound in their customized formularies, mitigating the impact of CVS's decision on Eli Lilly [10].

Core Viewpoint - In Q1 2025, Novo Nordisk's semaglutide surpassed Merck's Keytruda in global sales, temporarily claiming the title of "King of Drugs" with a sales figure of approximately $7.864 billion, marking a year-on-year growth of 32.17% [2][3]. Group 1: Sales Performance - In Q1 2025, semaglutide achieved global sales of 55.776 billion Danish Krone (approximately $7.864 billion), accounting for about 71% of Novo Nordisk's total revenue [2]. - Semaglutide's sales outperformed Keytruda by $664 million in Q1 2025, with Keytruda generating $7.2 billion in the same period, reflecting a year-on-year growth of 4% [3][4]. Group 2: Product Breakdown - The sales breakdown for semaglutide in Q1 2025 includes: - Ozempic (injectable version) at 32.721 billion Danish Krone (approximately $4.613 billion), a year-on-year increase of 15% [5]. - Rybelsus (oral version) at 5.695 billion Danish Krone (approximately $803 million), a year-on-year increase of 13% [5]. - Wegovy (weight loss version) at 17.36 billion Danish Krone (approximately $2.448 billion), a significant year-on-year increase of 83% [5]. Group 3: Market Dynamics - Novo Nordisk faces increasing competition from Eli Lilly's dual agonist tirzepatide, which has a cumulative sales figure of $6.15 billion across its indications, although semaglutide still leads in total sales [5]. - Eli Lilly holds a 53.3% share of the U.S. GLP-1 market in terms of total prescriptions, indicating a competitive landscape for semaglutide [6]. Group 4: Company Outlook - Novo Nordisk has revised its full-year sales growth forecast for 2025 from an initial estimate of 16% to 24% down to 13% to 21%, alongside a reduction in operating profit expectations from 19% to 27% to 16% to 24% [6].

[Q1 2025 Performance Overview](index=2&type=section&id=Q1%202025%20Performance%20Overview) Novo Nordisk reported strong Q1 2025 sales growth driven by GLP-1 treatments, but revised its full-year outlook downwards due to US compounded GLP-1 impact, while advancing key R&D milestones Q1 2025 Financial Highlights (vs. Q1 2024) | PROFIT AND LOSS | Q1 2025 (DKK million) | Q1 2024 (DKK million) | Growth as reported | Growth at CER* | | --- | --- | --- | --- | --- | | Net sales | 78,087 | 65,349 | 19 % | 18 % | | Operating profit | 38,791 | 31,846 | 22 % | 20 % | | Net profit | 29,034 | 25,407 | 14 % | N/A | | Diluted earnings per share (in DKK) | 6.53 | 5.68 | 15 % | N/A | *CER: Constant exchange rates - The full-year outlook was reduced due to lower-than-planned branded GLP-1 penetration in the US, impacted by rapid compounding expansion, with the company actively working to prevent unlawful compounding[6](index=6&type=chunk) - Key R&D advancements include completing the pivotal trial for **CagriSema** for obesity and filing for US approval of **oral semaglutide 25 mg**, a potential first-in-class oral GLP-1 treatment[6](index=6&type=chunk)[7](index=7&type=chunk) [Strategic Aspirations and Performance Highlights](index=3&type=section&id=Strategic%20Aspirations%20and%20Performance%20Highlights) The company tracks Q1 2025 performance against strategic goals, achieving **65% CER growth in Obesity care sales** but experiencing a slight decline in Diabetes market share and a **37% increase in CO2e emissions** Q1 2025 Performance vs. Strategic Aspirations | Category | Aspiration | Q1 2025 Performance | |---|---|---| | **Commercial** | Strengthen diabetes leadership to >1/3 | Diabetes value market share declined to 33.3% | | | > DKK 25B in Obesity care sales by 2025 | Obesity care sales grew 65% (CER) to DKK 18.4B | | | Sustained growth for Rare Disease | Rare disease sales grew 3% (CER) to DKK 4.6B | | **Financials** | Solid sales and operating profit growth | Sales grew 18% (CER), Operating profit grew 20% (CER) | - Key innovation milestones in Q1 include the successful **REDEFINE 2 trial** for **CagriSema**, regulatory submission of **oral semaglutide 25 mg** for weight management, and in-licensing of a **GLP-1/GIP/Glucagon triple agonist**[15](index=15&type=chunk) - ESG highlights include a **37% increase in CO2e emissions** compared to Q1 2024, an increase in women in senior leadership to **42%**, and providing medical treatment to **43.1 million** people with diabetes and **2.6 million** with obesity[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Commercial Execution](index=5&type=section&id=Commercial%20Execution) Commercial execution highlights strong sales growth across regions and therapeutic areas, driven by GLP-1 treatments, despite challenges from compounded products and supply constraints [Geographic Sales Development](index=5&type=section&id=Geographic%20Sales%20Development) Overall sales grew **18% at CER**, with strong performance across all regions, driven by significant growth in Obesity care in both US and International Operations Sales Growth by Geographical Area (Q1 2025) | Geographical Area | Sales (DKK million) | Growth at CER | |---|---|---| | **US Operations** | 44,316 | 17 % | | **International Operations** | 33,771 | 19 % | | - EUCAN | 14,765 | 13 % | | - Emerging Markets | 8,790 | 24 % | | - APAC | 4,594 | 25 % | | - Region China | 5,622 | 22 % | | **Total Sales** | **78,087** | **18 %** | - US Operations growth was driven by a **40% CER increase in Obesity care sales** and a **10% CER increase in GLP-1 diabetes sales**, though growth was negatively impacted by compounded GLP-1s[21](index=21&type=chunk) - International Operations growth was driven by a **137% CER increase in Obesity care sales** and a **13% CER increase in GLP-1 diabetes sales**, with growth affected by periodic supply constraints[22](index=22&type=chunk) [Sales Development by Therapeutic Area](index=7&type=section&id=Sales%20Development%20by%20Therapeutic%20Area) Sales growth was primarily driven by the Diabetes and Obesity care segment, which grew **19% at CER**, led by **65% CER growth in Obesity care sales** from Wegovy® Sales by Therapeutic Area (Q1 2025 vs Q1 2024) | Therapy Area | Sales Q1 2025 (DKK million) | Growth at CER | |---|---|---| | **Diabetes and Obesity care total** | 73,468 | 19 % | | - Total GLP-1 (Diabetes) | 39,574 | 11 % | | - Total Insulin | 14,997 | 3 % | | - Total Obesity care | 18,424 | 65 % | | **Rare disease total** | 4,619 | 3 % | | **Total Sales** | **78,087** | **18 %** | [Diabetes Care](index=8&type=section&id=Diabetes%20Care) Diabetes care sales rose **8% at CER to DKK 55.0 billion**, driven by GLP-1 products, despite a slight decrease in global diabetes value market share to **33.3%** Global Diabetes Care Sales & Market Share | Metric | Feb 2025 | Feb 2024 | Q1 2025 Sales (DKK M) | Q1 2025 Growth (CER) | |---|---|---|---|---| | **Total Diabetes Care** | 33.3% | 33.9% | 55,044 | 8% | | **GLP-1 Diabetes** | 54.0% | 55.3% | 39,574 | 11% | | **Insulin (Volume Share)** | 43.5% | 45.1% | 14,997 | 3% | - **Ozempic® sales grew 15% at CER to DKK 32.7 billion**, while **Rybelsus® sales grew 13% at CER**, and **Victoza® sales declined by 46%** as the market shifts to once-weekly treatments[36](index=36&type=chunk) [Obesity Care](index=13&type=section&id=Obesity%20Care) Obesity care sales surged **65% at CER to DKK 18.4 billion**, primarily driven by Wegovy®, despite the impact of compounded GLP-1s on US uptake Obesity Care Sales Growth (Q1 2025, CER) | Geographical Area | Sales Growth (CER) | |---|---| | Global | 65 % | | US Operations | 40 % | | International Operations | 137 % | - **Wegovy® sales increased by 83% at CER**, while **Saxenda® sales decreased by 35% at CER** as the market moves to more effective once-weekly treatments[52](index=52&type=chunk) - In the US, the volume of compounded GLP-1s is estimated to have **negatively impacted Wegovy® prescription uptake**, with Novo Nordisk actively focused on preventing unlawful compounding and expanding patient access[52](index=52&type=chunk)[53](index=53&type=chunk) [Rare Disease](index=17&type=section&id=Rare%20Disease) Rare disease sales increased **3% at CER to DKK 4.6 billion**, driven by rare endocrine disorders, while rare blood disorder products saw a slight decline Rare Disease Sales Growth (Q1 2025, CER) | Geographical Area | Sales Growth (CER) | |---|---| | Global | 3 % | | US Operations | 1 % | | International Operations | 5 % | - Sales of **rare endocrine disorder products grew 14% at CER**, while **rare blood disorder products decreased by 1% at CER**[58](index=58&type=chunk) [Financials](index=4&type=section&id=Financials) The company's financial performance is detailed, highlighting significant increases in net sales, operating profit, and free cash flow, alongside changes in gross margin and cost structures [Financial Highlights for Q1 2025](index=4&type=section&id=Financial%20Highlights%20for%20Q1%202025) Novo Nordisk achieved a **19% increase in net sales** and a **22% rise in operating profit** in Q1 2025, alongside a slight gross margin contraction and significant increases in capital expenditure Detailed Financial Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | |---|---|---|---| | Net sales (DKK M) | 78,087 | 65,349 | 19% | | Gross margin | 83.5% | 84.8% | -1.3pp | | Operating profit (DKK M) | 38,791 | 31,846 | 22% | | Operating margin | 49.7% | 48.7% | +1.0pp | | Net profit (DKK M) | 29,034 | 25,407 | 14% | | Diluted EPS (DKK) | 6.53 | 5.68 | 15% | | Capital expenditure (DKK M) | 13,422 | 8,474 | 58% | | Free cash flow (DKK M) | 9,492 | 5,020 | 89% | [Development in Costs and Operating Profit](index=18&type=section&id=Development%20in%20Costs%20and%20Operating%20Profit) Operating profit grew **20% at CER to DKK 38.8 billion**, despite a gross margin decline due to acquisitions and capacity expansion, and increased R&D costs - Gross margin declined to **83.5%** from **84.8%** YoY, reflecting amortisations and depreciations related to Catalent and costs for ongoing capacity expansions[65](index=65&type=chunk) - Sales and distribution costs increased by **10% at CER**, driven by promotional activities for Wegovy® and Ozempic®[66](index=66&type=chunk) - R&D costs increased by **19% at CER**, mainly due to increased late-stage clinical trial activity and early research activities within Obesity care[66](index=66&type=chunk) [Cash Flow and Capital Allocation](index=19&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) The company's cash flow generation and capital allocation strategy are detailed, emphasizing significant investments in capacity expansion and the decision to forgo a share buyback program [Free Cash Flow and Capital Expenditure](index=19&type=section&id=Free%20Cash%20Flow%20and%20Capital%20Expenditure) Free cash flow increased **89% to DKK 9.5 billion** in Q1 2025, despite a **58% increase in capital expenditure** for capacity expansion, leading to no share buyback program in 2025 Cash Flow and CAPEX (Q1 2025 vs Q1 2024) | Metric (DKK billion) | Q1 2025 | Q1 2024 | |---|---|---| | Free cash flow | 9.5 | 5.0 | | Capital expenditure (PP&E) | 13.4 | 8.5 | - Capital expenditure primarily reflects investments in **additional capacity for API production and fill-finish capacity** for current and future products[74](index=74&type=chunk) - Due to the significant increase in CAPEX investments in 2025, Novo Nordisk is **not conducting a share buyback programme**[77](index=77&type=chunk) [2025 Outlook](index=20&type=section&id=2025%20Outlook) The company's 2025 financial guidance has been updated, reflecting revised sales and operating profit growth projections and free cash flow forecasts due to market dynamics [Updated 2025 Financial Guidance](index=20&type=section&id=Updated%202025%20Financial%20Guidance) Novo Nordisk has lowered its full-year 2025 guidance for sales, operating profit, and free cash flow due to compounded GLP-1s in the US, while capital expenditure expectations remain unchanged 2025 Outlook Revision (at CER) | Metric | New Outlook (May 7, 2025) | Old Outlook (Feb 5, 2025) | |---|---|---| | Sales growth | 13% to 21% | 16% to 24% | | Operating profit growth | 16% to 24% | 19% to 27% | | Free cash flow (bDKK) | 56 to 66 | 75 to 85 | - The updated sales outlook reflects **lower-than-planned penetration of branded GLP-1 treatments** in the US, impacted by compounded GLP-1s[79](index=79&type=chunk) - The outlook assumes a **reduction in patients on compounded GLP-1 treatment** during the second half of 2025, following the FDA's removal of semaglutide injectables from the drug shortage list[80](index=80&type=chunk) - Capital expenditure is still expected to be around **DKK 65 billion** in 2025, reflecting the expansion of the global supply chain[83](index=83&type=chunk) [Innovation and R&D](index=23&type=section&id=Innovation%20and%20R%26D) Key advancements in the company's R&D pipeline and business development activities are highlighted, including pivotal trial results, new regulatory submissions, and expanded early-stage programs [Pipeline and Business Development](index=23&type=section&id=Pipeline%20and%20Business%20Development) The R&D pipeline saw significant progress with successful trials for CagriSema, key regulatory submissions for oral semaglutide and MASH treatment, and expansion of the early-stage obesity pipeline through new licensing agreements - The **REDEFINE 2 trial for CagriSema** demonstrated a superior **15.7% weight loss** in adults with obesity or overweight and type 2 diabetes[92](index=92&type=chunk) - Key regulatory submissions include **oral semaglutide 25 mg** for weight management in the US and **once-weekly semaglutide 2.4 mg for MASH** in both the EU and US, with the latter granted **priority review by the FDA**[93](index=93&type=chunk)[94](index=94&type=chunk) - Business development activities included exclusive license agreements for **UBT251**, a **GLP-1/GIP/glucagon triple receptor agonist**, and **LX9851**, an **oral non-incretin candidate** for obesity[98](index=98&type=chunk)[99](index=99&type=chunk) [Purpose and Sustainability (ESG)](index=26&type=section&id=Purpose%20and%20Sustainability%20%28ESG%29) The company's environmental and social performance is detailed, including increased CO2e emissions due to acquisitions, expanded patient reach, and growth in employee numbers and female leadership representation [Environmental and Social Performance](index=26&type=section&id=Environmental%20and%20Social%20Performance) Total CO2e emissions increased **37% YoY** due to acquisitions and investments, while patient reach expanded to **45.7 million**, and women in senior leadership rose to **42%** ESG Performance Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | |---|---|---|---| | Total CO2e emissions (1,000 tonnes) | 667 | 486 | 37% | | Total patients reached (millions) | 45.7 | 41.8 | 9% | | Total employees (FTEs) | 77,406 | 66,015 | 17% | | Women in senior leadership | 42% | 41% | +1pp | - The increase in CO2e emissions was mainly driven by the **acquisition of new production sites**, **increased consumption of natural gas**, and **use of non-renewable electricity** at these new sites[103](index=103&type=chunk) - The number of full-time employees increased by **17%**, mainly driven by Product Supply and the acquisition of Catalent, which accounted for around **3,000 employees**[110](index=110&type=chunk) [Corporate Governance and Legal Matters](index=28&type=section&id=Corporate%20Governance%20and%20Legal%20Matters) Recent changes in corporate governance, including executive management reorganization, and updates on ongoing legal matters concerning compounded GLP-1 products are detailed [Corporate Governance](index=28&type=section&id=Corporate%20Governance) Significant changes in Executive Management were announced in April 2025, involving a reorganization of roles and responsibilities following a key departure - **Key changes in Executive Management** were implemented in April 2025 following the departure of the EVP of Commercial Strategy & Corporate Affairs[114](index=114&type=chunk) - The changes include promotions and shifts in responsibility for **Ludovic Helfgott** (Product & Portfolio Strategy), **Thilde Hummel Bøgebjerg** (Quality, IT & Environmental Affairs), and **Tania Sabroe** (People & Organisation and Global Communication)[114](index=114&type=chunk)[115](index=115&type=chunk) [Legal Matters](index=29&type=section&id=Legal%20Matters) The company is involved in litigation regarding the FDA's semaglutide shortage resolution, with a federal court denying a preliminary injunction sought by compounding organizations, ending enforcement discretion for 503A pharmacies - Novo Nordisk is involved in **litigation regarding the FDA's resolution of the semaglutide injectables shortage** and the subsequent allowance of compounding[117](index=117&type=chunk) - A US federal court **denied a motion for a preliminary injunction** filed by compounding-related organizations, **ending the period of enforcement discretion for 503A compounding pharmacies** on April 24[117](index=117&type=chunk) [Financial Statements and Appendices](index=30&type=section&id=Financial%20Statements%20and%20Appendices) This section provides detailed financial statements and appendices, including unaudited condensed financial statements and reconciliations for non-IFRS measures [Detailed Financial Data](index=33&type=section&id=Detailed%20Financial%20Data) The appendices provide detailed financial information, including unaudited condensed financial statements, reconciliations for non-IFRS measures, and restated 2024 sales data by new geographical reporting structure - **Appendix 2** provides the detailed **Income Statement** and **Statement of Comprehensive Income** for Q1 2025[134](index=134&type=chunk) - **Appendix 7** provides definitions and reconciliations for **non-IFRS financial measures** used in the report, such as Net sales at CER, EBITDA, and Free cash flow[141](index=141&type=chunk) - **Appendix 8** provides a detailed **restatement of sales data for 2024**, broken down by the **new geographical areas** (US Operations and International Operations, which includes EUCAN, Emerging Markets, APAC, and Region China)[152](index=152&type=chunk)[153](index=153&type=chunk)