N
o
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o
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A
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S
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9
Financial, social and environmental performance
Creating value
through innovation
Performance
highlights 2009
Financial performance
Sales total
Diabetes care
Of which modern insulins
Biopharmaceuticals
Gross profit
Gross margin
Sales and distribution costs
Research and development costs
Administration expenses
Operating profit
Net profit
Diluted earnings per share/ADR
Effective tax rate
Capital expenditure
Free cash flow
Long-term financial targets
Operating profit growth
Operating margin
Return on invested capital (ROIC)
Cash to earnings (three-year average)
Non-financial performance
Employees
Employee turnover
Employment impact worldwide (direct and indirect jobs)
Least developed countries where Novo Nordisk
sells insulin according to the differential pricing policy
New patent families (first filings)
Total waste
Energy consumption
Non-financial targets
Maintain a level of engaging culture of 4.0 or above up to 2014
Diversity in all 28 senior management teams by 2014
Water consumption: 11% reduction by 2011 compared to 2007
CO2 emissions: 10% reduction by 2014 compared to 2004
Share performance
Dividend per share (proposed)
Closing share price (B shares)
Market capitalisation (B shares)***
DKK million
DKK million
DKK million
DKK million
DKK million
%
% of sales
% of sales
% of sales
DKK million
DKK million
DKK
%
DKK million
DKK million
%
%
%
%
Number
%
Number of jobs
Number
Number
Tons
1,000 GJ
Scale 1–5*
%**
%
%
DKK
DKK
DKK billion
* Based on eVoice, an employee survey using a scale of 1–5, with 5 being the best.
** Diverse in gender and nationality.
*** Novo Nordisk B shares (excluding treasury shares).
See more financial and non-financial highlights and non-financial targets on pp 14–15.
2009
51,078
37,502
21,471
13,576
40,640
79.6
30.2
15.4
5.4
14,933
10,768
17.82
23.0
2,631
12,332
20.7
29.2
47.3
111.5
29,329
8.3
96,500
36
55
21,019
2,246
4.3
50
(34)
(31)
7.50
332
159
2008
Change
45,553
33,356
17,317
12,197
35,444
77.8
28.2
17.2
5.8
12,373
9,645
15.54
24.0
1,754
11,015
38.4
27.2
37.4
97.6
27,068
12.1
88,500
32
71
20,346
2,533
4.2
43
(17)
2
6.00
271
136
12.1%
12.4%
24.0%
11.3%
14.7%
20.7%
11.6%
14.7%
50.0%
12.0%
8.4%
9.0%
12.5%
(22.5%)
3.3%
(11.3%)
25.0%
22.5%
16.9%
For more than 85 years, Novo Nordisk has combined drug
discovery with technology to turn science into solutions for
people with diabetes, people with haemophilia, people with
growth hormone deficiency and women experiencing the
symptoms of menopause. Our commitment to research is
reflected in our full portfolio of insulin products and the many
new treatment options in our pipeline.
At Novo Nordisk, decisions about our operations are driven by
the Triple Bottom Line: a commitment to social responsibility,
sound environmental management and balanced economic
growth.
With headquarters in Denmark, Novo Nordisk employs more
than 29,300 employees in 76 countries and markets its products
in 179 countries. Novo Nordisk’s B shares are listed on the stock
exchanges in Copenhagen and London and our ADRs are listed
on the New York Stock Exchange under the symbol ‘NVO’. We
expect to receive approval to delist our B shares from the London
Stock Exchange during 2010. For more information about our
company, visit novonordisk.com.
This public filing contains references and links to information posted on the company’s
website; such information is not incorporated by reference into the public filing. Additional
reporting online provides more background, context and data. Many sections of this report
reference additional online information, and an index on p 108 provides links to online content
at annualreport2009.novonordisk.com.
Our 2009 accomplishments
and results
2 Creating value through innovation
5 Meeting changing healthcare needs
and societal expectations
7 Performance in 2009
13 Outlook 2010
14 Performance highlights
16 Pipeline progress
Diabetes care
18 Diabetes care
19 Victoza®: a treatment revolution
19 Modern insulin portfolio
20 Changing Diabetes®
22 Expanding access
Biopharma ceuticals
24 Biopharma ceuticals
24 Commitment to haemophilia
26 Changing Possibilities in Haemophilia®
26 Leadership and innovation
How we work
28 How we work
28 Novo Nordisk Way of Management
30 Our impact on society
31 Engaging stakeholders
32 Our people
33 Working with integrity
35 Environmental responsibility
Governance and leadership
37 Corporate governance
39 Executive remuneration
40 Risk management
43 Board of Directors
46 Executive Management
Investor information
47 Shares and capital structure
50 Novo Nordisk at a glance
Consolidated financial and
non-financial statements 2009
52 Consolidated financial statements
89 Consolidated non-financial statement
96 Supplementary information (unaudited)
98 Financial statements of the Parent company
105 Management’s statement
106 Independent Auditor’s reports
Additional information
108 Index
Inside back cover:
• Our products
• References
Novo Nordisk Annual Report 2009 1
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2 Novo Nordisk Annual Report 2009
Creating
value through
innovation
As the global economic environment and the reimbursement
environment for medicines developed as we anticipated, with
continuing challenges, we are pleased to be able to report very
positive results for 2009.
We increased sales by 11% (measured in local currencies) and
our reported operating profit by 21%. Dividends to shareholders
paid during 2009 increased by 25% compared to the prior year.
We also completed share repurchases of 6.5 billion Danish kroner
during 2009.
Our accomplishments during the year also include measures
that will provide a foundation for better long-term
performance:
• We launched a new product, Victoza®, which has the potential
to improve diabetes care, and our research and development
activities have resulted in a strengthened pipeline of new
products for our therapeutic areas.
• Overall we have improved our productivity, allowing us to
invest more in research and development and expand our
international sales and marketing organisation.
• We have continued our efforts to expand access to diabetes
care throughout the world as a company and via the World
Diabetes Foundation.
• We have decoupled growth in CO2 emissions from business
growth. By the end of 2009, emissions from production had
fallen below the level of the 2004 baseline year.
Progress in innovation
Our products are our greatest contribution to society. They pro-
vide significant benefits to patients, tangibly improving people’s
health. To remain competitive we must constantly innovate,
improving treatment outcomes, and in this area the last year has
been very eventful. Victoza®, the first once-daily human GLP-1
analogue, was approved and launched in Europe in the summer
of 2009 and was approved in the US and Japan in January 2010.
We are convinced that Victoza® will prove to be a valuable
treatment option for type 2 diabetes in major markets around
the world.
Achieving market access and reimbursement for a new medicine
in a new treatment class required strong evidence and compelling
arguments for why this therapy should become a standard treat-
ment. We are gratified that the initial launches surpassed our
expectations.
Photo: Lars Rebien Sørensen, president and chief executive officer
A new generation of insulins for both type 1 and type 2 diabetes,
Degludec and DegludecPlus, continues to show promising results
and has progressed to phase 3 trials. If preliminary results are
confirmed, this new generation of insulins has the potential
to offer better treatment for people with diabetes and further
strengthen Novo Nordisk’s competitive position.
While the technical challenge of effective insulin treatment in tablet
form is substantial, we are greatly encouraged by the progress our
research and development teams have made during the past two
years. Oral insulin could ensure improved treatment and better
health for many people with diabetes, as greater convenience could
lead to earlier and more diligent use of insulin therapy. Our first oral
insulin preparation entered into phase 1 clinical trials at the end of
2009 – a testament to our belief in this future treatment paradigm.
During 2009, we made notable advances in the development
of our biopharmaceuticals pipeline, including progress with
treatments for haemophilia A and B. We believe that we have
an obligation and an opportunity to develop new and better
ther apies both for inhibitor patients and for general haemophilia
patients as well as other patients with rare coagulation disorders.
We launched a new product,
Victoza®, which has the
potential to improve diabetes
care, and our research and
development activities have
resulted in a strengthened
pipeline of new products
for our therapeutic areas.
Global values for global growth
In the insulin market we have maintained our position as the
world leader with a market share of more than 50% by volume.
We are continuing to increase market share in the modern
insulin market and our portfolio of modern insulins was the key
driver of our solid business performance in 2009. To expand our
competitive position and brand awareness, not least among
general practitioners, we have continued to increase our sales
organisation in key markets.
As we grow and globalise our business, it is critical that all em-
ployees develop a deep understanding of the principles at the
heart of the Novo Nordisk Way of Management, which describes
our vision, our values, our commitment and our policies, and
thereby guides all of our actions. Continual training is necessary
as our business grows and attracts new people and as the
regulatory environment and global norms change.
We acknowledge that in 2005 Novo Nordisk was one of many
companies listed as paying fees to the Iraqi government in con-
Photo: Sten Scheibye, chairman of the Board of Directors
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Novo Nordisk Annual Report 2009 3
model that helps drive the market for renewable energy. Based
on our experience, we believe that transformation to a low-
carbon economy is not only possible, it also offers a promise of
economic returns.
Outlook
2010 is going to be a year of greater uncertainty for Novo Nordisk
than we have seen in the past.
There are major healthcare reforms sweeping the globe, in
particular in the US. We anticipate an impact on our business
in the short term, but in the longer term, it is our expectation
that healthcare reform will expand the use of particular
pharmaceuticals to treat chronic diseases such as diabetes.
We are potentially facing the impact of patent expiration of our
only oral antidiabetic drug, NovoNorm®/Prandin® in the US and
EU during 2010 which is likely to impact sales growth.
In spite of these uncertainties, we are still forecasting significant
growth in sales in local currencies and growth in operating profit.
In other words, 2010 is going to be yet another exciting year for
Novo Nordisk.
Thank you
We wish to thank everyone at Novo Nordisk for their tremendous
efforts during 2009. Their contribution has solidified the foun-
dation of our company, which is trust in our products and trust
in Novo Nordisk. Finally, we also want to thank our shareholders
and business partners for their support in yet another year when
Novo Nordisk turned a positive return in the face of a rather grim
financial picture.
Lars Rebien Sørensen
President and chief executive officer
Sten Scheibye
Chairman of the Board of Directors
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nection with contracts entered into under the programme that
enabled Iraq to sell oil to meet humanitarian needs. During 2009,
we reached settlement agreements with the US Securities and
Exchange Commission, the US Department of Justice and the
Danish Public Prosecutor for Serious Economic Crime regarding
the company’s sales to Iraq from 2000 to 2003 under the United
Nations Oil-for-Food programme.
Novo Nordisk has fully cooperated with the investigations of the
company in connection with this matter. The mistakes committed
were regrettable, and we have taken substantial measures to
prevent similar events from occurring in the future. Our policies
and procedures have been amended, and our training pro-
grammes reflect these measures. We are dependent upon our
ability to delegate responsibility as far out in our organisation
as possible, but this delegation of responsibility involves an
obligation to comply with our values.
We are forecasting significant
growth in sales in local
currencies and growth
in operating profit.
Managing responsibly
As we see it, a business can only be sustainable in the long
term if it meets stakeholders’ expectations regarding social and
environmental impact, in addition to delivering strong financial
performance. This is the core of our Triple Bottom Line approach.
Our approach to improving access to diabetes care in developing
countries builds upon three main pillars:
• Our long-term financial commitment to the World Diabetes
Foundation, a leading funding body devoted solely to projects
within diabetes care and prevention in the developing world
• Our commitment to supply life-saving insulin at reduced cost
in the poorest countries of the world
• Our Changing Diabetes® in Children programme, which
was recently expanded to include Bangladesh as its sixth
developing country. The programme builds sustainable
partnerships to offer diabetes care, including free insulin,
for children with type 1 diabetes.
As a global business, we need a long-term and global framework
to make decisions about our future operations. We would there-
fore have preferred clear targets for CO2 emissions from the
COP15 meeting in Copenhagen in December 2009, but we
acknowledge the tremendous obstacles to reaching such a
commitment. We think that, viewed retrospectively, the outcome
of the meeting, the Copenhagen Accord, will prove to be a
turning point in the commitment to curb man’s impact on the
climate.
At Novo Nordisk, we have experienced double-digit sales
growth rates in recent years. At the same time we have reduced
CO2 emissions through greater efficiency and a new partnership
4 Novo Nordisk Annual Report 2009
Meeting changing
healthcare needs and
societal expectations
Interview with Novo Nordisk’s CEO,
Lars Rebien Sørensen
As the global economy struggles to rebound and
governments and private payers face budget constraints
that impact healthcare spending, what are the
implications for the future of the healthcare industry?
The current economic downturn has impacted societies’ and
individuals’ ability to pay for healthcare, including life-saving
medicines. At an industry level, a lack of innovation also means
that the number of new medicines approaching the market is
not sufficient to replace revenue lost due to patent expiry. Of
course, patent expiry also means that generic competition will
lower society’s costs for existing treatments, creating room in
healthcare budgets for new, innovative drugs that fulfil important
medical needs.
While there are problems at an industry level, there are also
significant opportunities. The prevalence of chronic disease is
increasing everywhere, and the demand for better and more
convenient therapies is immense. To address the growth in
chronic disease, healthcare systems will need to evolve and
change, with increased emphasis on prevention and wellness.
This trend has implications for how we approach innovation
and treatment. In the treatment of diabetes, for instance, we
need to consider the rise in obesity in many parts of the world,
which is associated with a higher risk of chronic disease. The
greatest improvements in quality of life will come from earlier
interventions, halting or arresting disease progression.
During 2009, we undertook our third round of future scenario
development to help us analyse the emergence of new paradigms
that may impact healthcare and our business. One scenario we
considered is a world where obesity becomes the new ‘normal’,
with a wider range of medical and public health interventions.
Another possible scenario involves a change in industry dynamics,
with increased emphasis on medicines as part of the full cycle
of care and payment tied to carefully monitored healthcare
outcomes.
With a strong pipeline and a primary business focus on chronic
disease, we believe we are well positioned for many of the
challenges and potential changes facing the healthcare sector.
Where do you see future growth coming from?
In the near term, our growth will come primarily from the
global expansion of insulin therapy with modern insulin
analogues, particularly in the US and emerging markets.
In addition, we anticipate substantial growth from the
introduction of Victoza®, a new once-daily human GLP-1
analogue.
One of the most interesting businesses we will develop in the
next 10 years is a broad pipeline of treatments for haemophilia
and rare coagulation disorders. We anticipate being the leading
player in this field within 15 years.
As markets are becoming more global we are seeing a
convergence of medical and regulatory practices. This favours
companies with a global presence and the building of global
brands. By continuing to expand globally, Novo Nordisk will
continue to develop into a strong international competitor, but
with a Danish heritage.
Our people around the world build the business. The responsibility
of management is to ensure that the business is built on Novo
Nordisk values. Novo Nordisk’s heritage and values are of great
importance to our stakeholders and to our ability to attract
employees who want to work for a company that prioritises ethical
behaviour and social and environmental responsibility – and
combine these with attractive, sustainable financial returns.
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The prevalence of chronic
disease is increasing
everywhere, and the demand
for better and more convenient
therapies is immense. To
address the growth in chronic
disease, healthcare systems
will need to evolve and change,
with increased emphasis on
prevention and wellness.
How will healthcare reforms in various
markets impact Novo Nordisk in the near term?
Healthcare reforms are taking place all over the world with the
aim of making provision of health services more affordable. This
puts constant pressure on pricing of all products and services
used.
Most noticeable is the ongoing work in the US to extend services
and insurance coverage to a larger part of the population. This
may lead to a reduction in prices in the US in the short term,
particularly for people whose treatment is paid for by government
programmes. Extending coverage to more people could improve
the prevention and treatment of chronic diseases, which today
are underdiagnosed and undertreated. Ultimately, more people
may be treated.
Reforms are, however, a global theme as populations are growing
older and consuming more healthcare services, and some parts
of the world are becoming affluent enough to be able to
afford heathcare services in the first place. Add to this an ever-
increasing expansion of treatment options, and you can begin
to understand the future funding difficulties.
How does Novo Nordisk define value for money?
Payers around the world are concerned about the cost of healthcare
and the pricing of medicines. The requirement to substantiate
healthcare purchases in terms of value for money is becoming an
additional hurdle for product acceptance over and above clinical
trial and regulatory requirements for safety, efficacy and quality.
Novo Nordisk Annual Report 2009 5
diabetes products, so we have a responsibility to do what we
can to ensure that treatment is available. In Africa, for example,
more people are dying of diabetes than of HIV/AIDS. The
increased prevalence of diabetes is of a magnitude that will
impact economic growth in many countries.
Giving products away is not sustainable. To create long-term
change in healthcare systems, we need to have a substantial
impact on healthcare infrastructure and capacity. For this
reason we launched the World Diabetes Foundation in 2001.
The WDF focuses exclusively on capacity-building and diabetes
awareness in developing countries. Through our programme
to reach children with type 1 diabetes, Changing Diabetes® in
Children, we seek to improve distribution systems and healthcare
education. By combining this with the company’s differential
pricing scheme, which allows the poorest countries to buy our
life-saving insulins at significantly reduced cost, we believe we
can be part of the solution to healthcare access dilemmas.
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We create value for healthcare patients and payers by offering
medicines and devices that significantly improve healthcare
outcomes and quality of life or reduce the need for other health
services. In diabetes, for example, we have made the case that
earlier diagnosis and treatment can significantly reduce the
burden on healthcare spending as diabetes, if left untreated,
carries significant economic and humanitarian costs in the form
of serious late-stage complications.
How will Novo Nordisk prepare for future challenges?
It is not enough to produce a drug that is slightly better than
its predecessor. The need for evidence of improved healthcare
outcomes is growing, as is the demand for solid evidence. This
means we not only have to innovate, we have to achieve a
greater level of innovation than ever before. With a looming
shortage of healthcare professionals in much of the world and
existing healthcare systems overwhelmed by the increase in
chronic disease, new types of innovation will also be required
as treatment processes change.
During 2009, we assessed the level of innovation within our
organisation and how innovation is fostered. To challenge
ourselves to continuously improve, we are introducing new
pilot programmes in 2010 to cultivate new ways of thinking
and working in several parts of our business.
Another issue we must address is the fundamental trust society
has in healthcare companies. Our sector needs to build stronger
relationships with governments, regulators and people who need
treatment and care.
The need for evidence of
improved healthcare outcomes
is growing, as is the demand
for solid evidence. This
means we not only have
to innovate, we have to
achieve a greater level of
innovation than ever before.
We understand the need to be open about how we operate. I
anticipate our engagement with stakeholders will intensify and
hope this will increase understanding of what we are trying to
accomplish.
As the world leader in diabetes care, what is Novo Nordisk’s role?
Our dream and our hope is that we can cure diabetes. Our
commitment is backed by substantial investment in diabetes
research, but finding a cure for type 1 diabetes and preventing
type 2 diabetes are very difficult tasks. In the absence of a
cure, we are leading the fight against diabetes, advocating
and working for improvements in prevention, earlier diagnosis,
better treatments and, eventually, a cure.
We believe that access to health is a fundamental human right.
We know that people around the world die of lack of access to
6 Novo Nordisk Annual Report 2009
Performance in 2009
2009 was a successful year for Novo Nordisk with solid sales
growth in all major business areas, continued improvement in
the gross margin and solid progress in the clinical development
pipeline for key projects in both diabetes care and biopharma-
ceuticals. In 2009, we launched Victoza®, the first once-daily
human GLP-1 analogue, in several markets in Europe. Victoza®
was approved in the US and Japan in January 2010. Our
accomplishments during the year also include measures that
will provide a foundation for better long-term performance.
We have continued to improve the efficiency of our production
and have decoupled growth in CO2 emissions from business
growth. During 2009, we exceeded our target of a 10% absolute
reduction in emissions from the 2004 baseline year.
Sales increased by 12% in Danish kroner and by 11% measured
in local currencies. Growth was realised within both diabetes
care and biopharmaceuticals. Modern insulins were again the
main contributor to growth, increasing by 24% (23% in local
currencies). NovoSeven® and Norditropin® also contributed
to the solid sales growth, increasing, by 11% (10% in local
currencies) and by 14% (10% in local currencies) respectively.
Sales by
geographical area
(cid:81)(cid:3)Europe
(cid:81)(cid:3)North America
(cid:81)(cid:3)International Operations
(cid:81)(cid:3)Japan & Oceania
DKK billion
2009
2008
2007
2006
2005
51.1
45.6
41.8
38.7
33.8
0
10
20
30
40
50
60
DKK billion
Sales by therapy area
(cid:81)(cid:3)Diabetes care
(cid:81)(cid:3)Haemostasis management
(NovoSeven®)
(cid:81)(cid:3)Growth hormone therapy
(cid:81)(cid:3)Hormone replacement
therapy (HRT)
(cid:81)(cid:3)Other products
2009
2008
2007
2006
2005
51.1
45.6
41.8
38.7
33.8
0
10
20
30
40
50
60
Sales growth
Local and reported rates
(cid:3)
(cid:3)
In DKK as reported
In local currencies
%
25
20
15
10
5
0
2005 2006 2007 2008 2009
Sales growth was realised in all regions. North America was the
main contributor with 48% share of growth measured in local
currencies. International Operations and Europe contributed 32%
and 19%, respectively, of the total sales growth – also measured
in local currencies.
Reported operating profit increased by 21% to DKK 14,933
million. Adjusted for the impact from currencies, underlying
operating profit increased by more than 15%.
Net profit increased by 12% to DKK 10,768 million and earnings
per share (diluted) increased by 15% to DKK 17.82.
2009 performance against
long-term financial targets
By focusing on growth, profitability, financial return and
generation of cash, our four long-term financial targets guide
Novo Nordisk’s financial development and the way we seek to
create shareholder value. Our long-term financial targets are
operating profit growth, operating margin, return on invested
capital and cash conversion.
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Operating margin
(cid:3) Target
(cid:3) Realised
(cid:3) Realised excl pulmonary
(cid:3) diabetes projects
Growth in
operating profit
(cid:3) Target
(cid:3) Realised
(cid:3) Realised excl pulmonary
(cid:3) diabetes projects
Return on
invested capital
(ROIC)
(cid:3) Target
(cid:3) Realised
Cash to earnings
Three-year average
(cid:3) Target
(cid:3) Realised
%
50
40
30
20
10
0
%
50
40
30
20
10
0
%
50
40
30
20
10
0
%
125
100
75
50
25
0
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
Novo Nordisk Annual Report 2009 7
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Operating profit growth was realised at 21%. However, adjusted
for the impact from currencies, the underlying operating profit
growth increased by more than 15%. This performance reflects
solid underlying sales growth as well as an improved gross
margin. The long-term target is average annual operating profit
growth of 15%.
The operating margin for 2009 was realised at 29%, up from
27% in 2008, mainly driven by an improved gross margin. The
long-term operating margin target is 30%.
The return on invested capital was 47%, a significant improve-
ment compared to 2008 when the return on invested capital was
37%. The improvement mainly reflects solid growth in operating
profit as well as a lower level of invested capital following contin-
ued working capital improvements but has also benefited from
the development in key currencies. The long-term target for
return on invested capital is 50%.
The cash-to-earnings ratio was realised at 115% in 2009 and
at 111% for the last three years on average. The long-term target
for cash-to-earnings ratio is 80%. The cash-to-earnings ratio has
been positively impacted by a relatively low level of investments
during 2008 and 2009 compared to the long-term trend. The
cash-conversion ability will inherently fluctuate between the
individual years, and the long-term target therefore measures
the cash-to-earnings ratio over a three-year period.
Diabetes care
We continue to be the global leader with 51% of the total insulin
market and 45% of the modern insulin market, both measured
by volume. We aim to expand our leadership position in diabetes
care by leveraging the full portfolio of modern insulins in state-
of-the-art delivery devices, and continuing the launch of Victoza®,
while developing new antidiabetic agents and a new generation
of insulins to provide more effective diabetes care. See pp 18–23.
Sales performance
Sales of diabetes care products increased by 12% measured
in Danish kroner to DKK 37,502 million and by 11% in local
currencies compared to 2008.
Modern insulins, human insulins
and protein-related products
Sales of modern insulins, human insulins and protein-related
products increased by 13% in Danish kroner to DKK 34,850
million and by 11% measured in local currencies, driven by
North America and International Operations.
Our portfolio of modern insulins was the main contributor to
growth and sales increased by 24% in Danish kroner to DKK
21,471 million and by 23% in local currencies. All regions realised
solid growth rates, with North America accounting for 51% of
the growth followed by Europe and International Operations.
Sales of modern insulins constituted 65% of our sales of insulin
in Danish kroner in 2009.
North America
Sales in North America increased by 25% in Danish kroner and
by 20% in local currencies in 2009, reflecting a solid penetration
of the modern insulins Levemir®, NovoLog® and NovoLog® Mix
70/30. We maintained our leadership position in the US insulin
market with 42% of the total insulin market and 34% of the
modern insulin market, both measured by volume. At the end
8 Novo Nordisk Annual Report 2009
of 2009, 40% of our modern insulin volume in the US was sold
in FlexPen®.
Europe
Sales in Europe were largely unchanged measured in Danish
kroner and increased by 4% in local currencies during 2009. This
reflects continued progress for the portfolio of modern insulins
but also declining human insulin sales. Novo Nordisk holds 54%
of the total insulin market and 51% of the modern insulin market,
both measured by volume, and is capturing the main share of
growth in the modern insulin market. The device penetration
in Europe remains high with more than 95% of Novo Nordisk’s
insulin volume sold in devices at the end of 2009, primarily
NovoPen® and FlexPen®.
Victoza®, the first once-daily human GLP-1 analogue, has been
launched in Germany, the United Kingdom, Denmark, Ireland,
Norway, Switzerland, the Netherlands, Greece and Sweden.
Launch activities are progressing well in these markets and
feedback from healthcare professionals and patients is encour-
aging. At the end of 2009, Victoza® had obtained market
leadership in the expanding GLP-1 market in both Germany
and Denmark.
Insulin value
market share
Geographical areas
Europe
North America
International Operations
Japan & Oceania
Modern insulins
Global value market
share of segment
NovoRapid®
NovoMix®
Levemir®
%
100
80
60
40
20
0
%
100
80
60
40
20
0
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
International Operations
Sales within International Operations increased by 17% in Danish
kroner and by 19% in local currencies. The main contributor to
growth in 2009 was sales of modern insulins, primarily in China
and Turkey. Furthermore, sales of human insulin, primarily driven
by China, continue to add to overall growth in the region. The
device penetration in China is high with more than 90% of
our insulin volume sold in devices, primarily NovoPen®.
Japan & Oceania
Sales in Japan & Oceania increased by 12% measured in Danish
kroner and decreased by 1% in local currencies. The sales
development reflects sales growth for all three modern insulins,
NovoRapid®, Levemir® and NovoRapid Mix® 30, countered by
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pressure on the overall Novo Nordisk market share due to intense
competition. Novo Nordisk holds 67% of the total insulin market
in Japan and 59% of the modern insulin market, both measured
by volume. The device penetration in Japan remains high with
more than 95% of our insulin volume sold in devices, primarily
NovoPen® and FlexPen®.
Oral antidiabetic products (NovoNorm®/Prandin®)
In 2009, sales of oral antidiabetic products increased by 11% in
Danish kroner to DKK 2,652 million and by 9% in local currencies
compared to 2008. This increase primarily reflects increased sales
in International Operations, particularly China.
Biopharmaceuticals
We continue to grow our biopharmaceuticals therapy areas
by leveraging our specialised expertise with proteins and our
understanding of chronic disease. Novo Nordisk is committed to
developing innovative and improved ways to treat haemophilia
and other rare coagulation disorders, growth hormone
deficiency, the symptoms of menopause and inflammatory
diseases. See pp 24–27.
Sales performance
In 2009, sales of biopharmaceutical products increased by 11%
measured in Danish kroner to DKK 13,576 million and by 9%
measured in local currencies compared to 2008.
NovoSeven®
Sales of NovoSeven® increased by 11% in Danish kroner to
DKK 7,072 million and by 10% in local currencies. Sales growth
for NovoSeven® was primarily realised in International Operations
and Europe. The sales growth for NovoSeven® mainly reflected
increased sales from treatment of spontaneous bleeding episodes
for congenital inhibitor patients, which remains the largest
therapeutic area of use for NovoSeven®.
Norditropin®
Sales of Norditropin® (ie growth hormone in a liquid, ready-to-
use formulation) increased by 14% measured in Danish kroner
to DKK 4,401 million and by 10% measured in local currencies
compared to 2008. North America and Europe were the main
contributors to growth measured in local currencies. We
maintained our position as the second-largest company in
the global growth hormone market with 24% market share
measured by volume.
Other products
Sales of other products within biopharmaceuticals, which pre-
dominantly consist of hormone replacement therapy-related
products, increased by 9% in Danish kroner to DKK 2,103 million
and by 6% in local currencies. This development primarily reflects
continued sales progress for Vagifem®, a topical oestrogen
product, in the US.
Operating performance
The gross margin increased to 79.6% compared to 77.8% in
2008. This improvement primarily reflects improved production
efficiency, higher average selling prices in the US and a positive
currency effect. The improved production efficiency primarily
reflects higher yields in diabetes bulk production and increased
utilisation of insulin filling and packaging lines. The gross margin
was positively impacted by around 0.4 percentage points as a
result of a positive currency development, primarily the higher
value of the US dollar and the Japanese yen versus the Danish
krone compared to 2008.
Gross margin
Development
in gross margin
%
85
80
75
70
65
2005 2006 2007 2008 2009
US dollar
Cover and exchange rate
(cid:81)(cid:3) Cover (left)
Rate (right)
Months
25
20
15
10
5
0
Rate
570
550
530
510
490
12/08 03/09 06/09 09/09 12/09
Japanese yen
Cover and exchange rate
(cid:81)(cid:3) Cover (left)
Rate (right)
Months
25
20
15
10
5
0
Rate
5.9
5.8
5.7
5.6
5.5
12/08 03/09 06/09 09/09 12/09
In 2009, total non-production-related operating costs increased
by 12% to DKK 26,048 million compared to the same period
last year. Around 1.5 percentage points of the increase in
non-production-related operating costs reflect the higher value
of key currencies versus the Danish krone in 2009 compared to
2008. The underlying development in non-production-related
operating costs relates to the expanded sales forces in especially
the US, the UK, Germany, Japan and China, countered by a stable
level for research and development costs. The development in
research and development costs primarily reflects non-recurring
costs in 2008 related to the discontinuation of all pulmonary
diabetes projects and of the growth hormone therapy project
for patients in low serum albumin in dialysis (Growth Hormone
Therapy in LSAD) countered by costs in 2009 related to late-stage
development of the new Degludec and DegludecPlus (formerly
known as SIBA and SIAC) in the second half of 2009.
Licence fees and other operating income were DKK 341 million
in 2009 compared to DKK 286 million in 2008.
Operating profit in 2009 increased by 21% to DKK 14,933 million
compared to 2008.
Novo Nordisk Annual Report 2009 9
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Research &
development costs
(cid:81)(cid:3) Diabetes care
(excl pulmonary
diabetes projects)
(cid:81)(cid:3) Biopharmaceuticals
DKK billion
2009
2008
2007
2006
2005
0
2
4
7.9
7.5
7.2
6.3
5.1
6
8
10
Net financials and tax
Net financials showed a net expense of DKK 945 million in 2009
compared to a net income of DKK 322 million in 2008.
Included in net financials is the result from associated companies
with an expense of DKK 55 million, primarily related to Novo
Nordisk’s share of losses in ZymoGenetics, Inc. In 2008, the result
from associated companies was an expense of DKK 124 million.
For 2009, the foreign exchange result was an expense of
DKK 751 million compared to an income of DKK 141 million
in 2008. This development reflects losses on foreign exchange
hedging of especially US dollars and Japanese yen, due to the
appreciation of these currencies versus Danish kroner in 2009
compared to the exchange rate level prevailing in 2008.
The effective tax rate was 23.0%, a decrease from 24.0% in
2008.
Capital expenditure
and free cash flow
Net capital expenditure for property, plant and equipment for 2009
was realised at DKK 2.6 billion compared to DKK 1.8 billion in 2008.
The main investment projects in 2009 were the insulin filling plant in
Tianjin, China, and new device manufacturing lines in Denmark.
Free cash flow for 2009 was realised at DKK 12.3 billion com-
pared to DKK 11.0 billion in 2008. The higher cash flow is driven
by higher net profit and lower income taxes paid, countered by
increased capital expenditure during 2009.
Equity
Total equity was DKK 35,734 million at the end of 2009, equivalent
to 65% of total assets, unchanged from the end of 2008.
Proposed dividend
At the Annual General Meeting on 24 March 2010, the Board of
Directors will propose a 25% increase in dividend to DKK 7.50 per
share of DKK 1, corresponding to a pay-out ratio of 40.9%, com-
pared to 37.8% for the financial year 2008. No dividend will be
paid on the company’s holding of treasury B shares.
Share repurchase programme
During 2009, Novo Nordisk repurchased 21,661,949 B shares
at an average price of DKK 301 per share, equivalent to a cash
value of DKK 6.5 billion, completing the share repurchase
programme of DKK 19 billion initiated in 2006.
10 Novo Nordisk Annual Report 2009
The Board of Directors has approved a new DKK 7.5 billion share
repurchase programme to be executed during 2010.
Share savings programme
In the autumn of 2009, the employees in the Danish part of
the organisation were offered participation in a share savings
programme. An annual maximum of DKK 22,800 per participant
can be saved out of gross salary in 2010. The savings will be
converted into Novo Nordisk B shares at the market price on
7 December 2010 contingent on continued employment. The
shares will be restricted until January 2018.
Approximately 8,400 employees elected to participate in the
programme corresponding to 64% of the eligible employees.
The total amount invested by employees will be approximately
DKK 160 million. This programme is cost neutral to the
company.
Holding of treasury shares
and reduction of share capital
As per 2 February 2010, Novo Nordisk A/S and its wholly-owned
affiliates owned 32,137,945 of its own B shares, corresponding to
5.2% of the total share capital.
In order to maintain capital structure flexibility, the Board of
Directors at the Annual General Meeting in 2010 will also pro-
pose a reduction in the B share capital from DKK 512,512,800 to
DKK 492,512,800 by cancelling 20,000,000 B shares of DKK 1
from the company’s own holdings of B shares at a nominal value
of DKK 20,000,000, equivalent to 3.2% of the total share capital.
After implementation of the share capital reduction, the com-
pany’s share capital will amount to DKK 600,000,000 divided
into an A share capital of DKK 107,487,200 and a B share capital
of DKK 492,512,800.
Legal issues
Novo Nordisk is party to a number of legal cases. See key legal
issues and information on contingencies for pending litigations
on pp 84–85.
Non-financial performance
Strategic management of the direct and indirect economic,
social and environmental impacts of our activities reduces risk
and strengthens competitiveness. Managing our business using
the Triple Bottom Line business principle helps ensure that
decisions are balanced and take a long-term view, with the
objective of protecting and enhancing shareholder and societal
value. See pp 28–36.
2009 performance against
long-term non-financial targets
Long-term non-financial targets guide the company’s sustainability-
driven priorities in an increasingly dynamic business environment.
Focus is on maximising positive social impacts by improving access
to and quality of care and effectively managing resources to
minimise environmental impacts.
During 2009, we met our long-term targets related to employee
engagement and adherence to the Novo Nordisk Way of
Management. We also made progress towards the diversity
target we set in 2008. As a measure of our progress in expanding
access to diabetes care, we also made progress in increasing
adoption of our long-established differential pricing policy for
insulin sales in least developed countries (LDCs).
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Our long-term target for reduction of CO2 emissions was achieved
at the end of 2009, well ahead of schedule. Targets for water and
total energy consumption were also achieved.
Social
Performance on social dimensions continued on a positive trend
with notable progress on all dimensions: people (employees),
patients and communities. See p 89.
People
In 2009, we onboarded 4,640 new employees, compared to
4,496 in 2008. The global growth trend continues as projected,
with Europe and International Operations leading the expansion.
At the end of 2009, the total number of employees was 29,329,
which corresponds to 28,809 full-time positions. The total number
of employees increased by 8%, from 27,068 at the end of 2008.
1,000 full-time positions
Full-time positions
Geographical areas
(cid:81)(cid:3)Denmark
(cid:81)(cid:3)Europe
(excl Denmark)
(cid:81)(cid:3)North America
(cid:81)(cid:3)International Operations
(cid:81)(cid:3)Japan & Oceania
2009
2008
2007
2006
2005
28.8
26.6
25.5
23.2
22.0
0
10
20
30
Sales per
full-time position
Sales per
full-time position
DKK million
2.0
1.8
1.6
1.4
1.2
2005 2006 2007 2008 2009
DKK billion
1,000 tons
Climate strategy
impact
(cid:3) Sales (left)
(cid:3) CO2 emissions (right)
70
60
50
40
30
300
240
180
120
60
2005 2006 2007 2008 2009
In the same period, employee turnover decreased from 12.1% to
8.3%, reflecting a continuous focus on retention which was likely
reinforced by the economic environment.
Via the multiplier effect, the employment impact in 2009 – ie
the number of jobs created in the supply chain and through
employees’ private consumption – was 96,500 jobs worldwide.
Most notably, of the total increase of 8,000 the largest portion
is estimated to be in International Operations.
Productivity continued to increase, with sales per full-time position at
an average of DKK 1.8 million, compared to DKK 1.7 million in 2008.
The ability to manage global growth and stimulate productivity
and innovation is tracked via the internal facilitation process
and a set of engagement scores in the annual employee survey,
eVoice. In 2009, the consolidated score (on a scale of 1–5, with
5 being best) was 4.3, an increase of 0.1 from 2008. Annual
scores have been consistently above the long-term target of
maintaining a level of 4.0 or above.
Similarly, the level of fulfilment of action points from facilitations
of local units’ adherence to the Novo Nordisk Way of Management
was 93% in 2009, against a long-term target to maintain a level of
80% or above.
In 2008, we set a five-year goal to have diversity in terms
of gender and nationality in all senior management teams.
Achievement of this goal relies on training, talent management
and succession planning; activities that have all been scaled
up and intensified during the 12 months since the launch of
a renewed strategy for diversity management. At the end of
2009, 50% of the senior management teams met the diversity
criteria, an increase from 43% at the end of 2008.
Patients
Changing Diabetes®, our commitment to give people with
diabetes priority, drive health outcomes and break the curve
of the diabetes pandemic, aims to deliver sustainable positive
impacts for people with diabetes. Efforts are being made to
improve systematic measuring, tracking and reporting on
outcomes, from a patient perspective as well as the socio-
economic implications, of corporate-driven programmes as
well as local initiatives.
Developing healthcare capacity to improve the ability to diagnose
and treat diabetes is key to achieving sustainable results in terms
of improved access to care and personal health. Over the years,
our investments in training and education of healthcare profes-
sionals have been significantly scaled up. Since 2002, we have
conducted training programmes for a total of 805,000 healthcare
professionals worldwide. During 2009, we also reached out to
416,000 people with diabetes, offering training on how to
manage their condition.
Our pricing policy for people with diabetes in the world’s poorest
countries (LDCs), in place since 2001, is now well-established in
these markets. In 2009, we sold insulin at or below the policy price,
not to exceed 20% of the average prices in the Western world, to
36 out of all 49 LDCs, up from 32 out of 50 in 2008. Our long-term
goal is for the differential pricing to be adopted in all LDCs.
Environment
Performance on environmental dimensions also improved,
and we successfully exceeded long-term targets for reduction
of CO2 emissions, water consumption and total energy
consumption. Our environmental targets and performance
management focus on impacts from production. See p 89.
Climate action
Our aim has been to decouple environmental impacts from
production growth and this has now been accomplished for
CO2 emissions. At the end of 2009, we surpassed our 2014 target
of a 10% absolute reduction compared to 2004 – well ahead
of time. This accomplishment is the result of energy savings in
all production facilities globally. Savings from energy reductions
in Denmark have been earmarked to purchase wind energy
to supply power for Danish operations from Horns Rev 2 – an
Novo Nordisk Annual Report 2009 11
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offshore wind farm in the North Sea. The gradual conversion
to renewable power supplies began in the second half of 2009
and is expected to be fully effective in 2010.
Resource efficiency
Consumption of water and energy for production decreased
in 2009 by 34% and 19%, respectively, compared to the 2007
baseline. These reductions surpassed our long-term targets
of 11% reductions in both areas by 2011 compared to 2007.
The total volume of waste increased to 21,019 tons in 2009
from 20,346 tons in 2008, while the recycling percentage
stayed consistent at 51%. The increased waste volume relates
to increases in production, but as we are aiming for absolute
reductions of environmental impacts wherever possible, we
intensified efforts to map and manage waste during 2009.
Developing a long-term waste target is part of this process.
12 Novo Nordisk Annual Report 2009
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Outlook 2010
The current expectations for 2010 are summarised in the table
below:
Expectations are as reported,
if not otherwise stated
Current expectations
2 February 2010
Sales growth
• in local currencies
• as reported
Operating profit growth
• in local currencies
• as reported
Net financial expense
Effective tax rate
Capital expenditure
6–10%
At a similar level as local currencies
Around 10%
At a similar level as local currencies
Around DKK 100 million
Approximately 23%
Around DKK 3.5 billion
Depreciation, amortisation and impairment losses
Around DKK 2.7 billion
Free cash flow
Around DKK 12 billion
Novo Nordisk expects sales growth in 2010 of 6–10% measured
in local currencies. This is based on expectations of continued
market penetration for Novo Nordisk’s key strategic products
within diabetes care, including continued global roll-out of
Victoza®, and biopharmaceuticals as well as expectations of
continued intense competition, potential generic competition
to NovoNorm®/Prandin® and an adoption of a healthcare
reform in the US. Given the current level of exchange rates versus
Danish kroner, the reported sales growth is now expected to be
at a level similar to the growth rate measured in local currencies.
For 2010, growth in operating profit is expected to be around
10% measured in local currencies. The forecast reflects further
improve ment of the gross margin, increased spending for R&D
activities, primarily related to insulin Degludec and DegludecPlus,
and higher licence fees and other operating income. Given the
current level of exchange rates versus Danish kroner, the reported
operating profit growth is now expected to be at a level similar to
the growth rate measured in local currencies. Given the develop-
ment in key curren cies in 2009, a higher share of the 2010 growth
for reported sales and operating profit is expected to be realised
in the second half of 2010.
For 2010, Novo Nordisk expects a net financial expense of around
DKK 100 million. The current expectation primarily reflects Novo
Nordisk share of losses in associated companies.
The effective tax rate for 2010 is expected to be maintained at
around 23%.
Capital expenditure is expected to be around DKK 3.5 billion in 2010,
primarily related to the new insulin formulation and filling plant in
China and new device capacity in Denmark. Expectations for depre-
ciations, amortisation and impairment losses are around DKK 2.7
billion, and free cash flow is expected to be around DKK 12 billion.
All of the above expectations are based on the assumption that the
global economic environment will not significantly change business
conditions for Novo Nordisk during 2010 and that currency
exchange rates, especially the US dollar, remain at the current level
versus the Danish krone during 2010 (see appendix 7). Novo
Nordisk has hedged expected net cash flows in a number of
invoicing currencies and, all other things being equal, movements
in key invoicing currencies will impact Novo Nordisk’s operating
profit as outlined in the table below:
Key
invoicing
currency
Annual impact on Novo Nordisk’s
operating profit of a 5%
movement in currency
Hedging
period
(months)
USD
JPY
CNY
GBP
CAD
DKK 580 million
DKK 150 million
DKK 100 million
DKK 80 million
DKK 40 million
* USD used as proxy when hedging Novo Nordisk’s CNY currency exposure.
17
15
17*
13
9
The financial impact from foreign exchange hedging is included
in ‘Net financials’.
Forward-looking statement
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission
(SEC), including this document and Form 20-F, both expected to be filed with the SEC in
February 2010, 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’, ‘project’,
‘anticipate’, ‘can’, ‘intend’, ‘target’ 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:
• statements of plans, objectives or goals for future operations, including those related to Novo
Nordisk’s products, product research, product development, product introductions and
product approvals as well as cooperations in relation thereto
• statements containing projections of or targets for revenues, income (or loss), earnings per
share, capital expenditures, dividends, capital structure or other net financials
• statements of future economic performance, future actions and outcome of contingencies
such as legal proceedings
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 described in this
document, could cause actual results to differ materially from those contemplated 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 projects related to research and/or development, 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.
• statements of the assumptions underlying or relating to such statements.
Please also refer to the overview of risk factors on pp 40–42.
In this document, examples of forward-looking statements can be found under the headings
‘Creating value through innovation’, ‘Performance in 2009’, including long-term financial
targets, ‘Outlook for 2010’ and note 28, ‘Financial risk’, on p 75.
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.
Novo Nordisk Annual Report 2009 13
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Performance highlights
DKK million
2005
2006
2007
2008
Sales
Modern insulins (insulin analogues)
Human insulin
Protein-related sales
Oral antidiabetic products (OAD)
Diabetes care total
NovoSeven®
Norditropin®
Hormone replacement therapy
Other products
Biopharmaceuticals total
Total sales by business segment
North America
Europe1
International Operations1
Japan & Oceania
Total sales by geographical segment
Increase in sales prices and volume/product mix
Currency effect (local currency impact)
Total sales increase as reported
Financial performance
Depreciation, amortisation and impairment losses
Operating profit
Operating profit (excl AERx®)2
Net financials
Profit before income taxes
Net profit
Total assets
Equity
Investments in property, plant and equipment (net)
Free cash flow3
Financial ratios
Sales in percent:
Modern insulins (insulin analogues)
Diabetes care total
Biopharmaceuticals total
Percentage of sales
Sales outside Denmark
Sales and distribution costs
Research and development costs
Research and development costs (excl AERx®)2
Administrative expenses
Gross margin3
Net profit margin3
Effective tax rate3
Equity ratio3
Return on equity3
Payout ratio3
Payout ratio adjusted for impact of Dako and AERx®
Ratios for long-term financial targets
Operating profit margin
Operating profit margin (excl AERx®)2
Growth in operating profit
Growth in operating profit (excl AERx®)2
Growth in operating profit, three-year average
Return on invested capital (ROIC)3
Cash to earnings
Cash to earnings, three-year average
Share ratios5
Basic earnings per share/ADR in DKK
Diluted earnings per share/ADR in DKK
Dividend per share in DKK
14 Novo Nordisk Annual Report 2009
7,298
13,543
1,463
1,708
24,012
5,064
2,781
1,565
338
9,748
33,760
9,532
14,020
5,497
4,711
33,760
15%
1%
16%
1,930
8,088
8,088
146
8,234
5,864
41,960
27,634
3,665
4,833
21.6%
71.1%
28.9%
99.2%
28.7%
15.1%
15.1%
6.3%
72.8%
17.4%
28.8%
65.9%
21.7%
33.2%
33.2%
24.0%
24.0%
15.9%
15.9%
11.0%
24.7%
82.4%
82.4%
8.95
8.92
3.00
10,825
13,451
1,606
1,984
27,866
5,635
3,309
1,607
326
10,877
38,743
12,280
15,300
6,494
4,669
38,743
16%
(1%)
15%
2,142
9,119
9,119
45
9,164
6,452
44,692
30,122
2,787
4,707
27.9%
71.9%
28.1%
99.2%
30.0%
16.3%
16.3%
6.2%
75.3%
16.7%
29.6%
67.4%
22.3%
34.4%
34.4%
23.5%
23.5%
12.7%
12.7%
12.4%
25.8%
73.0%
80.2%
10.05
10.00
3.50
14,008
12,572
1,749
2,149
30,478
5,865
3,511
1,668
309
11,353
41,831
13,746
16,350
7,295
4,440
41,831
13%
(5%)
8%
3,007
8,942
10,267
2,029
10,971
8,522
47,731
32,182
2,268
9,012
33.5%
72.9%
27.1%
99.2%
29.6%
20.4%
17.2%
6.0%
76.6%
20.4%
22.3%
67.4%
27.4%
32.8%
34.9%
17,317
11,804
1,844
2,391
33,356
6,396
3,865
1,612
324
12,197
45,553
15,154
17,219
8,425
4,755
45,553
12%
(3%)
9%
2,442
12,373
12,698
322
12,695
9,645
50,603
32,979
1,754
11,015
38.0%
73.2%
26.8%
99.2%
28.2%
17.2%
16.5%
5.8%
77.8%
21.2%
24.0%
65.2%
29.6%
37.8%
37.8%
2008–2009
Change
4,154
(489)
220
261
4,146
676
536
132
35
1,379
5,525
3,125
321
1,401
678
5,525
109
2,560
2,235
(1,267)
1,293
1,123
4,139
2,755
877
1,317
2009
21,471
11,315
2,064
2,652
37,502
7,072
4,401
1,744
359
13,576
51,078
18,279
17,540
9,826
5,433
51,078
11%
1%
12%
2,551
14,933
14,933
(945)
13,988
10,768
54,742
35,734
2,631
12,332
42.0%
73.4%
26.6%
99.2%
30.2%
15.4%
15.4%
5.4%
79.6%
21.1%
23.0%
65.3%
31.3%
40.9%
40.9%
Long-term
financial targets4
30%
15%
50%
80%
21.4%
24.5%
(1.9%)
12.6%
8.9%
27.2%
105.7%
87.0%
13.49
13.39
4.50
27.2%
27.9%
38.4%
23.7%
16.4%
37.4%
114.2%
97.6%
15.66
15.54
6.00
29.2%
29.2%
20.7%
20.7%
19.1%
47.3%
114.5%
111.5%
17.97
17.82
7.50
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Social performance
Employees:
North America
Europe
International Operations
Japan & Oceania
Total employees
Employment impact worldwide
(direct and indirect):
North America
Europe
International Operations
Japan & Oceania
Total employment impact (direct and indirect)
Ratios, scales and numbers
Fulfilment of action points from
facilitations of the NNWoM (%)6
Engaging culture (employee engagement)
on a scale of 1–57
Diverse senior management teams (%)8
Warning letters and re-inspections
LDCs9 where Novo Nordisk sells insulin
according to the differential pricing policy (%)
Company reputation with external key
stakeholders on a scale of 0–10010
Environmental performance
Diabetes care:
Energy consumption (1,000 GJ)
Water consumption (1,000 m3)
CO2 emissions from energy consumption (1,000 tons)
Biopharmaceuticals:
Energy consumption (1,000 GJ)
Water consumption (1,000 m3)
CO2 emissions from energy consumption (1,000 tons)
Other:11
Energy consumption (1,000 GJ)
Water consumption (1,000 m3)
CO2 emissions from energy consumption (1,000 tons)
Ratios
Energy consumption
(% change compared to 2007)
Water consumption
(% change compared to 2007)
CO2 emissions from energy consumption
(% change compared to 2004)
2005
2006
2007
2008
2009
2,482
15,582
3,510
886
22,460
6,785
59,172
9,686
2,373
78,000
88
–
–
1
64
2,850
15,577
4,199
987
23,613
7,466
61,160
11,616
2,507
82,700
88
4.0
–
0
68
3,940
16,100
4,943
1,025
26,008
10,522
54,384
14,085
2,583
81,600
91
4.1
–
0
72
3,727
16,721
5,587
1,033
27,068
10,004
58,770
17,148
2,604
88,500
92
4.2
43
0
64
4,076
17,686
6,557
1,010
29,329
10,896
61,533
21,429
2,616
96,500
93
4.3
50
0
74
74.3
73.8
74.0
72.4
76.3
–
–
–
–
–
–
–
–
–
–
–
9
1,916
2,625
164
335
186
32
461
184
33
–
–
9
2,182
2,907
177
323
175
30
279
149
29
–
–
12
1,803
2,377
146
302
166
28
428
141
41
(9)
(17)
2
1,544
1,817
99
292
143
19
410
189
28
(19)
(34)
(31)
2008–2009
Change
349
965
970
(23)
2,261
892
2,763
4,281
12
8,000
Long-term
social targets
80% or above
up to 2014
4.0 or above
up to 2014
100% by 2014
0
100%
Improve
(or maintain)
Change
(259)
(560)
(47)
(10)
(23)
(9)
(18)
48
(13)
Long-term
environmental targets
11% reduction by 2011
compared to 2007
11% reduction by 2011
compared to 2007
10% reduction by 2014
compared to 2004
1 Comparative sales figures for 2005 and 2006 have been adjusted in order to reflect a changed organisational structure from 1 January 2007
which transferred eight countries, including Bulgaria and Romania, from Region International Operations to Region Europe.
2 Excluding costs related to the discontinuation of pulmonary diabetes projects in 2007.
3 For definitions, please refer to p. 88.
4 The long-term financial targets were updated in January 2009.
5 In 2007, there was a stock split of the company’s A and B shares. The trade unit was changed from DKK 2 to DKK 1.
The comparative figures for 2005 and 2006 have been updated accordingly.
6 NNWoM is an abbreviation of the Novo Nordisk Way of Management.
7 Based on eVoice, an employee survey using a scale of 1–5, with 5 being the best.
8 Diverse in terms of gender and nationality.
9 The Least Developed Countries as defined by the UN.
10 Company reputation is measured by an independent external consultancy firm.
11 ‘Other’ consists of consumption and emissions that cannot directly be linked to the production of either diabetes care or biopharmaceuticals.
Novo Nordisk Annual Report 2009 15
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Pipeline progress
In 2009, significant progress was made across Novo Nordisk’s clinical
development pipeline. This overview illustrates key development
activities: entries into the pipeline, progression of development
compounds, exits from the pipeline and major regulatory approvals.
Phase 1
Studies in a small group of healthy volunteers, and sometimes
patients, usually between 10 and 100, to investigate how the body
handles new medication and establish maximum tolerated dose.
Phase 2
Testing a drug at various dose levels in a larger group of patients
to learn about its effect on the condition and its side effects.
Diabetes care
Oral insulin
(Type 1 and type 2 diabetes)
Diabetes care
Semaglutide
(Type 2 diabetes)
We are exploring the possibilities of an oral insulin preparation to
improve convenience of treatment. A phase 1 trial involving 84 people
was initiated in November 2009.
Semaglutide is a long-acting human GLP-1 analogue designed to treat
type 2 diabetes. The phase 2 clinical trial involving more than 400
people was completed in 2009.
Biopharmaceuticals
Recombinant factor XIII analogue
(Cardiac surgery)
We are developing a recombinant factor XIII analogue intended for the
treatment of patients undergoing cardiac surgery with cardio-
pulmonary bypass to reduce the need for allogenic blood transfusions.
The phase 2 clinical trial, involving about 400 people, was initiated in
2009.
Once-weekly growth hormone
(Growth hormone deficiency)
We are developing a long-acting growth hormone derivative intended
to improve patient convenience by reducing the number of injections
needed. In 2009, we completed a phase 2 clinical trial involving more
than 30 adults with growth hormone deficiency and initiated a phase 2a
trial involving approximately 30 children with growth hormone
deficiency.
Long-acting, recombinant
factor VIIa derivative
(Haemophilia patients with inhibitors)
We are developing a long-acting, recombinant factor VIIa derivative.
With its long duration of action, it is intended to enable the prevention
of bleeding in haemophilia patients with inhibitors. The phase 2 clinical
trial, begun in 2009, is expected to involve about 25 people.
Fast-acting, recombinant
factor VIIa analogue
(Haemophilia patients with inhibitors)
We are developing a fast-acting, recombinant factor VIIa analogue
designed to deliver predictable, fast and sustainable clotting. The
ongoing phase 2 clinical trial involves about 90 people.
Oral GLP-1
(Type 2 diabetes)
We are exploring the possibilities of an oral GLP-1 preparation to
improve convenience of treatment. A phase 1 trial was initiated in
January 2010 involving 155 people.
GIC
(Type 2 diabetes)
GIC, a combination of a basal insulin and a GLP-1 analogue, is being
developed for people with type 2 diabetes. The phase 1 clinical trial
initiated in 2009 involves 24 people.
NN9161
(Obesity)
We are developing NN9161 for the treatment of obesity. A phase 1 trial
was initiated during 2009 involving approximately 140 overweight or
obese but otherwise healthy people.
Biopharmaceuticals
Anti-C5aR
(Rheumatoid arthritis)
We are developing anti-C5aR, a monoclonal antibody blocking the C5aR
receptor, for the intended treatment of rheumatoid arthritis. The ongoing
phase 1 trial involves about 50 people.
NN8555
(Rheumatoid arthritis)
NN8555 is a monoclonal antibody intended for the treatment of
rheumatoid arthritis. The phase 1 clinical trial, which involves around
50 people, was initiated in 2009.
Anti-IL20
(Psoriatic arthritis and rheumatoid arthritis)
We are developing a monoclonal antibody for neutralising the
interleukin 20 protein, for the intended treatment of psoriatic arthritis
and rheumatoid arthritis. The ongoing phase 1 development
programme is expected to involve about 80 people.
Long-acting, recombinant factor IX derivative
(Haemophilia B)
We are devoloping a long-acting, recombinant factor IX derivative
intended for the treatment of haemophilia B. The long duration of action
is intended to support less frequent treatment administration and to
enable the prevention of bleeding. The phase 1 clinical trial, begun in
2009, is expected to involve 15 people.
Subcutaneous, long-acting, recombinant
factor VIIa derivative
(Haemophilia patients with inhibitors)
We are investigating the bioavailability of subcutaneous injections of
a long-acting, recombinant factor VIIa derivative intended to improve
treatment convenience. The phase 1 clinical trial, begun in 2009, is
expected to involve about 30 people.
16 Novo Nordisk Annual Report 2009
See more at novonordisk.com/investors/rd_pipeline/rd_pipeline.
asp and clinicaltrials.gov.
Phase 3
Studies in large groups of patients worldwide comparing the new
medication with a commonly used drug or placebo for both safety
and efficacy in order to establish its risk–benefit relationship.
Filed/regulatory approval
A New Drug Application is submitted for review by various
government regulatory agencies.
Diabetes care
Degludec (insulin degludec)
(Type 1 and type 2 diabetes)
Diabetes care
Victoza®
(Type 2 diabetes)
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Victoza®, the first once-daily human GLP-1 analogue, is targeted as
a treatment for type 2 diabetes as an adjunct to diet and exercise, both
as monotherapy and in combination with commonly used antidiabetic
medications. The clinical development programme involved about
6,500 people. In 2009, Victoza® was approved and launched in Europe.
It was approved in the US and Japan in January 2010 and regulatory
approval is pending in other markets.
Biopharmaceuticals
Vagifem® low dose
(Hormone replacement therapy)
Vagifem® low dose is a topical product for vaginal application. It was
approved in the US in November 2009 and in Europe in January 2010.
We are developing a new generation of ultra-long-acting basal insulin
analogue with a duration of action of more than 24 hours. Degludec is
intended for the treatment of type 1 and type 2 diabetes in adults. A
phase 3 development programme, BEGIN™, expected to involve 7,000
people, was initiated in 2009.
DegludecPlus (insulin degludec/insulin aspart)
(Type 1 and type 2 diabetes)
We are developing a new generation of ultra-long-acting basal insulin
with a bolus boost of rapid-acting insulin (NovoRapid®). DegludecPlus
is intended for the treatment of type 1 and type 2 diabetes in adults.
A phase 3 development programme, BOOST™, expected to involve
3,000 people, was initiated in 2009.
Liraglutide
(Obesity)
We are investigating the use of liraglutide as an antiobesity treatment.
The ongoing phase 3 programme is expected to involve around
5,000 people and will focus on weight loss and prevention of weight
gain in people with type 2 diabetes.
Biopharmaceuticals
Recombinant factor VIII
(Haemophilia A)
We are developing a recombinant factor VIII intended for the treatment
of haemophilia A. In 2009, Novo Nordisk initiated a phase 3 clinical trial
expected to involve about 140 people.
Recombinant factor XIII analogue
(Congenital factor XIII deficiency)
We are developing a recombinant factor XIII analogue intended to treat
factor XIII deficiency. The phase 3 trial, fully enrolled in 2009, involves
40 people.
Novo Nordisk Annual Report 2009 17
Diabetes
care
Novo Nordisk has been in the business of diabetes for 85 years
and has pioneered many therapeutic breakthroughs in diabetes
care. Today, diabetes remains our primary focus, accounting for
73% of 2009 sales. The company is the market leader with 51%
of the total insulin market and 45% of the modern insulin (insulin
analogue) market, based on volume, at year end.
Diabetes is a metabolic disorder affecting the way our bodies
use digested food for growth and energy. Much of the food we
eat is broken down into glucose, the form of sugar in the blood.
Glucose is the main source of fuel for the body. When we eat,
the pancreas automatically produces the right amount of insulin
to move glucose from blood into our cells. In people with
diabetes, however, the pancreas either produces little or no
insulin or the cells do not respond appropriately to the insulin
that is produced.
We are dedicated to creating value for patients by changing
diabetes – changing how it is treated, how it is viewed around the
world, and how the future of the disease evolves. While we seek
to offer innovative solutions that fit the way people want to live,
changing diabetes cannot be achieved through science alone.
We have to effect change at every level: in research, in education,
in public policy, and in humanitarian and outreach efforts.
Range of treatment options
Our edge in scientific discovery and our expertise with proteins
make us uniquely positioned to address the issues at the core of
the diabetes epidemic: insulin deficiency and the complexities
of treating it. Our goal is to offer people with diabetes, and their
healthcare providers, a wide range of treatment options.
We are the only company with a full portfolio of modern insulins.
We also produce the most widely used prefilled and durable
insulin pen devices in the world. Beginning with the first patients
treated with insulin in the 1920s, we have been dedicated to
continuously improving the safety, effectiveness and convenience
of diabetes treatment.
Our leadership position within diabetes care is bolstered by the
fact that we are the only company with two new-generation
insulins in late-stage clinical development. If successful, this new
generation of insulins is expected to offer even better treatment
outcomes and convenience for people with diabetes.
Novo Nordisk is looking at new ways to prevent type 2 diabetes
by treating its prestages, including obesity, which is known to be a
major risk factor in developing type 2 diabetes. We are conducting
a phase 3 trial for liraglutide treatment of obesity. From a
Photo: To improve treatment compliance and outcomes, we look for new
ways to make it easier for people with diabetes to take insulin and make
sure that products more closely resemble the body’s natural insulin curve.
Ib Jonassen, senior principal scientist and project director, Diabetes Protein
Engineering, is one of the inventors of Degludec, a new insulin under
development. Ultra-long-acting Degludec is in phase 3 clinical trials.
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Creating value
by improving
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18 Novo Nordisk Annual Report 2009
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commercial perspective, moving into prediabetes and obesity
treatment offers attractive potential, but also many challenges.
also been granted in the US and Japan and we will launch the
product in both markets in 2010.
“Our commercial strategy is to expand our global leadership
within modern insulin, gain GLP-1 leadership and continue to
offer innovations, including devices, that address unmet medical
needs,” says Kåre Schultz, executive vice president and chief
operating officer.
Modern insulin
portfolio
Victoza®:
a treatment revolution
Expert clinical practice shows that successful treatment of type
2 diabetes requires a patient-centred approach: focusing solely
on glucose management is not enough. Many treatments for
diabetes available up to now have involved trade-offs for
patients and physicians. While effective at lowering blood
glucose, many treatments can induce low blood sugar episodes
(hypoglycaemia), weight gain and other side effects. It is known
that some patients do not take their medicines regularly to
reduce such side effects.
GLP-1 gives patients and
their healthcare providers
an important new tool
in managing the multiple
aspects of diabetes.
Glucagon-Like Peptide-1 (GLP-1) is a hormone from the human
gut involved in glucose regulation. New GLP-1 therapies are a
major innovation in the treatment of type 2 diabetes: they lower
glucose while having a low risk of triggering hypoglycaemia, and
in most patients also support weight loss. In type 2 diabetes, the
ability of the pancreas to release insulin in the presence of glucose
is impaired. GLP-1 therapies help address this defect by directly
acting on the pancreas.
Our new, long-acting, human GLP-1 analogue, Victoza®
(liraglutide), was approved in the EU in 2009 on the basis of the
LEAD™ phase 3 programme. LEAD™ (Liraglutide Effect and Action
in Diabetes) comprised five randomised, controlled, double-blind
studies involving 6,500 patients in 40 countries. LEAD™ demon-
strated the strong safety and efficacy profile of Victoza® used alone
or in combination with other diabetes therapies. Two of the trials
with large patient populations, LEAD™ 2 and LEAD™ 3, have been
extended for 18 months and three years, respectively.
“Victoza® is off to a great start. Feedback from patients and
physicians is extremely positive – and reveals how Victoza® delivers
much more than reduced blood sugar,” explains Jakob Riis, senior
vice president, Liraglutide.
We launched Victoza® in nine European markets during the
second half of 2009 and will continue the European roll-out
throughout 2010. As of January 2010, regulatory approval has
Diabetes is a progressive chronic disease and, to maintain blood
glucose levels over time, insulin may be introduced following life-
style changes and initiation of metformin or GLP-1 therapy. As
a third step, treatment guidelines recommend transition to inten-
sive insulin therapy to maintain glucose targets.
Maintaining tight glucose control is associated with fewer serious
complications and better treatment outcomes. By engineering
proteins we have created a portfolio of modern insulins that offer
options for individual treatment needs to achieve improved blood
glucose control. For insulin initiation, treatment can include either
a long-acting modern insulin or a modern premix insulin with
dual release to cover both mealtime and basal requirements.
Insulin treatment can also be intensified in two ways, either with
a modern premix insulin or by adding a rapid-acting modern
insulin to the long-acting insulin at mealtimes.
Our portfolio of modern insulins includes:
• Levemir®, a soluble, long-acting modern insulin for once-daily use.
• NovoRapid® (NovoLog® in the US), the world’s most widely
used rapid-acting insulin for use at mealtimes.
• NovoMix® 70/50/30 (NovoLog® Mix 70/30 in the US), a dual-
release modern insulin that covers both mealtime and basal
requirements.
Better glucose control
The Treat-to-Target study for type 2 diabetes, published in the
New England Journal of Medicine in October 2009, evaluated
three different treatment regimens using Novo Nordisk insulins
over three years1.
DKK billion
Diabetes care
Sales development
(cid:81)(cid:3)Modern insulins
(cid:81)(cid:3)Human insulins
(cid:81)(cid:3)Protein-related products
(cid:81)(cid:3)Oral antidiabetic
products (OAD)
2009
2008
2007
2006
2005
37.5
33.4
30.5
27.9
24.0
Modern insulins
Sales development
(cid:81)(cid:3)NovoRapid®
(cid:81)(cid:3)NovoMix®
(cid:81)(cid:3)Levemir®
0
10
20
30
40
DKK billion
2009
2008
2007
2006
2005
21.5
17.3
14.0
10.8
7.3
0
5
10
15
20
25
Novo Nordisk Annual Report 2009 19
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The results demonstrated that patients with type 2 diabetes
can achieve good blood glucose control sustained over three
years with low rates of hypoglycaemia using Levemir®, NovoMix®
and/or NovoRapid®. Patients starting on Levemir® had the lowest
weight gain.
“Tight blood glucose control is widely believed to be difficult to
achieve because of a high risk of hypoglycaemia,” notes Mads
Krogsgaard Thomsen, executive vice president and chief science
officer. “The Treat-to-Target study shows that this need not be
the case.”
Continuous innovation
As more people throughout the world develop diabetes, there
is a growing need for more treatment options to help manage
symptoms and arrest disease progression. Studies have found
that convenience and safety are linked to higher rates of treat-
ment compliance, which in turn is linked to better health
outcomes.
We are working on two new-generation insulin products,
Degludec and DegludecPlus, which are intended to be even
longer acting to improve treatment outcomes and provide
more convenient insulin therapy with a possibility of fewer
injections. Currently in phase 3 development, the Degludec
and DegludecPlus development programmes will involve more
than 10,000 patients from 39 countries around the world.
The trial programme for Degludec is known as BEGIN™ and
will involve more than 7,000 patients. Degludec has so far
demonstrated an ultra-long duration of action of more than 24
hours, offering the potential of greater dosing flexibility and lower
risk of hypoglycaemia. The trial programme for DegludecPlus is
called BOOST™ and will recruit over 3,000 patients. DegludecPlus
is the first soluble combination of an ultra-long-acting basal insulin
with a boost of rapid-acting insulin (NovoRapid®).
Oral formulations
Most people would prefer a tablet to an injection. However,
because insulin is a protein, it is rapidly destroyed or degraded
in the gastrointestinal tract. The challenge is to move a purpose-
designed insulin analogue through the gut to exert its therapeutic
effect on blood glucose.
At the end of 2009, we initiated a phase 1 clinical trial for an oral
insulin analogue. This project combines our unique expertise with
insulin design in a partnership with Merrion Pharmaceuticals,
which has expertise in mechanisms for transporting proteins
through the gastrointestinal tract.
We also initiated a phase 1 clinical trial of an oral formulation
of GLP-1 in January 2010. This formulation was designed in
partnership with Emisphere Technologies. In addition, we have
built on our internal capabilities in basic science and protein tablet
formulation and have established tablet production facilities for
these clinical development programmes.
While the development of these new products is still at an early
stage and many technological challenges remain, significant
progress has been made, and both our partners and we are
enthusiastic about the potential within this area.
Safety profile
In the summer of 2009, research studies linking certain insulin
analogues to an increased risk of cancer were published in the
20 Novo Nordisk Annual Report 2009
official journal of the European Association for the Study of
Diabetes, Diabetologia2.
Insulin can bind to two different receptors in the body: insulin
and IGF-1 (Insulin-like Growth Factor-1) receptors. It has long
been known that certain insulin analogues are more likely to
bind to IGF-1 receptors. For this reason, all Novo Nordisk insulin
analogues developed during the past 20 years have been
engineered with molecular safety in mind and rigorously tested
for IGF-1 receptor binding in very early research phases. We have
only proceeded to develop modern insulins with a molecular
safety profile similar to, or better than, that of human insulin.
While insulin can have a growth-promoting effect on cells,
extensive clinical testing has provided evidence that Novo Nordisk’s
modern insulins have clinical advantages for many patients with
diabetes compared to human insulin, and each insulin has a
molecular safety profile as good as or better than human insulin.
All Novo Nordisk insulin analogues on the market have been
investigated in many randomised, controlled trials and in
observational studies, and they are also monitored for any safety
signals through rigorous post-marketing safety surveillance.
Device innovation
In our device pipeline, we strive to continuously improve chronic
disease therapy with more accurate, convenient and user-friendly
devices. Convenience and simplicity can be factors in treatment
compliance, with direct implications for health.
FlexPen®, the world’s best-selling prefilled insulin pen3, is available
for Levemir®, NovoRapid®/NovoLog® and NovoMix®/NovoLog®
Mix. It eliminates the need to manually load insulin into a delivery
device or use a separate vial and syringe. Once in use, the prefilled
pen may be stored at room temperature for 14 days or more,
which can be important to suit flexible lifestyles. FlexPen® is
made of a recyclable plastic, which has the potential to reduce
environmental impact.
The new award-winning4 NovoTwist® needle was launched in
Europe in 2009 and will be introduced to additional markets
in 2010. NovoTwist® has a simple ‘just twist’ attachment and
detachment that makes injection easier for people using FlexPen®
or taking Victoza®5,6.
Our newest device, NovoPen Echo™, is a colourful pen with dose
settings in half-unit increments, suitable for children needing
small doses. It features a simple and intuitive memory function
that makes it easy to check, the time lapsed since the last dose
was taken. NovoPen Echo™ was announced in Europe in 2009
and will be launched in 2010.
Changing Diabetes®
Diabetes and other chronic, non-communicable diseases are a
leading threat to human health and development. Diabetes kills
almost as many people as HIV/AIDS, disables millions of people and
is already causing damage to the global economy. The International
Diabetes Federation estimates that the number of people with
diabetes will increase from 285 million today to 438 million in 20307.
As a world leader in diabetes care, we have the potential and
responsibility to make a difference for people with diabetes,
facilitating change in addition to providing innovative treatments.
We do this through a concerted effort called Changing Diabetes®,
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which includes programmes and engagement at global, regional
and national levels. Our ambitions are to:
• give people with diabetes a priority that reflects the scope
and severity of the disease and its complications by supporting
systemic change for chronic disease management
Cooperation Centre of the Chinese Ministry of Health and the
World Diabetes Foundation. It was organised by the Chinese
Center for Diabetes Society and the Chinese Disease Control and
Prevention, with the support of the Bureau of Disease Prevention
and Control of the Chinese Ministry of Health, and the Inter-
national Diabetes Federation.
• drive healthcare outcomes for people with diabetes by
promoting improved care and timely investment to prevent
disease progression
In 2010, we will organise Changing Diabetes® Leadership Forums
with stakeholders in India, sub-Saharan and Northern Africa and
the Middle East.
• break the curve of the global diabetes epidemic by mobilising
multi-stakeholder efforts to set clear targets and achieving
concrete results.
Giving people with diabetes priority
To change the course of diabetes and improve treatment
outcomes, we are working to put diabetes on public health
agendas. To date, we have created 13 Changing Diabetes®
briefing books for nine countries. These reports provide an
overview of the diabetes state of each nation and a projection
of the future diabetes burden if nothing is done to curb it.
We have also engaged more than 5,000 key stakeholders
through 19 Changing Diabetes® Leadership Forums and
regional or national round-tables in 13 countries, helping to
reach consensus about what it will take to change diabetes.
According to the International
Diabetes Federation, 285
million people worldwide have
diabetes. By 2030, this will
increase to 438 million people.
In 2009, we sponsored the Changing Diabetes® Leadership Forum
in China. One of a series of forums held across the world, the goal
was to unite all key stakeholders in setting an agenda for improving
access to care and quality of care for people with diabetes.
Driving healthcare outcomes
Our goals for the newly launched Changing Diabetes® Barometer
website, changingdiabetesbarometer.com, include improving
health outcomes for people with diabetes globally while bringing
down total costs.
The barometer is a collaboration with the International Diabetes
Federation’s Diabetes Atlas, ensuring that all data gathered from
the participating countries is included in the global reference for
diabetes prevalence. By increasing transparency and highlighting
areas where improvements are possible, the tool gives policy-
makers and healthcare providers critical information to measure
progress and drive change.
Breaking the curve
To address patient needs and deter the growth of the diabetes
pandemic, we build partnerships around a shared vision of
changing diabetes and implementing the UN Resolution on
diabetes, engaging with governments, policy-makers, healthcare
organisations, healthcare professionals, people with diabetes,
patient associations, private enterprises, non-governmental
organisations and the media.
Our global campaign drives awareness of the personal and societal
risks of diabetes. Through our National Changing Diabetes®
programmes, we promote better education of healthcare profes-
sionals and wider availability of screening for diabetes symptoms
to help save lives and significant costs long term. The Changing
Diabetes® Bus visited 16 countries in Europe and the Middle East
during the year, providing 62,000 people with diabetes testing. On
World Diabetes Day, 14 November, more than 315,000 people in
56 countries were engaged in different Novo Nordisk-sponsored
activities, including fundraisers and educational programmes.
Due to rapid economic and industrial development, urbanisation
is spreading in China. Increasingly unhealthy lifestyles have
caused a significant increase in the number of overweight and
obese people, and a fivefold increase in the risk of getting
diabetes in urban areas compared to rural areas. The Forum
was jointly hosted by the International Health Exchange, the
Over the past decade, we have published a series of possible
future scenarios for diabetes, and have used these to engage
stakeholders in dialogue about the diabetes pandemic. Our third
edition of future scenarios, published in 2009, has two main
focus areas. One scenario outlines how linking treatment
outcomes and reimbursement will change healthcare. A second
Improving diabetes care
Stop
pandemic
Detect
earlier
Treat better
earlier
Delay
progression
Prevent
complications
Delay
complications
Prevention
Screening
Diagnosis
Treatment and
lifestyle modifi cation
Treatment
initiation
Treatment
intensifi cation
Management of late-
stage complications
Novo Nordisk Annual Report 2009 21
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scenario describes how communities and healthcare systems will
be impacted as obesity, which can be a precursor of diabetes,
becomes increasingly common around the world.
countries continue to have high mortality rates, with life expec-
tancies of less than one year in sub-Saharan Africa.
Expanding access
Building sustainable partnerships to expand access to diabetes
treatment and develop healthcare system capacity is the
primary goal of our long-term efforts to change the diabetes
epidemic in developing countries. Our commitment extends
to people who lack access to treatment, those who face barriers
due to inadequate healthcare infrastructures and the high
out-of-pocket costs that can be a part of having a progressive,
chronic disease.
Our significant contribution to the improvement of diabetes care
in the developing world includes our continued long-term financial
commitment to the World Diabetes Foundation, totalling 1.2 billion
Danish kroner allocated over 15 years (see p 84.)
The independent and non-profit foundation supports the
prevention and treatment of diabetes where it is needed most,
providing funding for local initiatives that improve healthcare
capacity. Since it was founded by Novo Nordisk in 2001, it has
supported 219 projects in 90 countries. The foundation’s annual
report is online at worlddiabetesfoundation.org.
Beyond our donations to the World Diabetes Foundation, our
approach to expanding access builds on the right to health and
aligns with the UN Millennium Development Goals, which offer
a common vision for tackling some of the major challenges facing
the world by 2015.
Over the next decade, our emphasis will be on areas selected
because of their ability to have an impact on current and future
generations, with a long-term impact consistent with our role
as a sustainable business. Our areas of emphasis support three
of the UN Millennium Development Goals.
Treating children with type 1 diabetes
Despite progress, children with type 1 diabetes in developing
To reduce child mortality – UN Millennium Development Goal 4
– Novo Nordisk has made an ambitious five-year, 25-million-
dollar commitment to treat children with type 1 diabetes. The
Changing Diabetes® in Children programme responds to the
International Diabetes Federation’s call that no child should
die of diabetes. Our goal is to work in cooperation with local
partners, including governments and diabetes associations,
to build sustainable national capacity in some of the world’s
poorest countries and create well-functioning diabetes clinics
for treatment of children with type 1 diabetes.
The programme provides the necessary medical and laboratory
equipment, organises training of healthcare professionals, puts in
place diabetes patient education, and creates systems for adequate
monitoring and follow-up. In addition, insulin and diabetes supplies
are being provided free of charge for the duration of the programme.
In Bangladesh, one of the countries in the world with the lowest
healthcare spending per capita, the programme has been rolled
out as a joint initiative with the Diabetic Association of Bangladesh
(BADAS). As in most other developing countries, there are no
existing facilities for treating children with diabetes. “Currently,
children with diabetes are managed primarily by adult diabetes
clinics or general medical outpatient clinics, but treating diabetes in
children is different from treating diabetes in adults,” says Professor
Azad Khan, president of BADAS. “They have other needs and
delayed treatment can often lead to devastating complications.”
More than 400 children were diagnosed and enrolled during
2009 in Bangladesh, Cameroon, Democratic Republic of Congo,
Guinea, Tanzania and Uganda. Our ambition is to reach 10,000
children as we expand the programme into additional countries
over the next few years.
Diabetes in pregnancy
Due to the decreasing age of onset for type 2 diabetes, growing
numbers of women have diabetes prior to pregnancy. Diabetes
makes pregnancies higher risk and can lead to long-term com -
plications for both mother and child.
Expanding access to care supports development goals
Millennium Development Goal
Target
Novo Nordisk response
Sustainability
MDG 4
Reduce child
mortality
MDG 5
Improve
maternal health
Target 4: Reduce by two
thirds the mortality rate
among children under fi ve
Treating children
with type 1 diabetes
Target 5a: Reduce by three quarters
the maternal mortality ratio
Target 5b: Achieve universal access to
reproductive health
Confronting diabetes in pregnancy
MDG 8
Global partnership
for development
Target 8e: In cooperation with
pharmaceutical companies, provide
access to affordable essential
drugs in developing countries
Donations to support the
World Diabetes Foundation
Differential pricing
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Over 10 million women develop gestational diabetes during
pregnancy every year. More than half of women who develop
gestational diabetes will go on to develop type 2 diabetes during
the next decade, and their children have a substantially increased
risk of developing type 2 diabetes. Supporting healthy pregnancies
is therefore important to reverse the diabetes pandemic.
In support of Millennium Development Goal 5, targeting
maternal health, we are initiating activities to raise awareness
of the impact of diabetes in pregnancy, address knowledge gaps,
support community-based maternal health programmes and
advocate for sustainable change, which ultimately will increase
access to diabetes screening, treatment and lifestyle education.
Through our commitment to address the needs of women with
diabetes, we aim to improve the health outlook for women and
their families today as well as for future generations.
Pricing in developing countries
The cost of therapy still constitutes a significant barrier for better
healthcare in the developing world. In many countries, the
availability of medicines at public health facilities is often very
poor due to inadequate funding, lack of incentives for main-
taining stocks, inability to forecast accurately or inefficiencies
in procurement, supply and distribution. Among the targets
for UN Millennium Development Goal 8 is a call for cooperation
from pharmaceutical companies to provide access to affordable
essential drugs in developing countries.
Through our long-standing differential pricing policy for the
least developed countries (LDCs), as defined by the United
Nations, we sell insulin at or below 20% of the average prices
for insulin in the Western world. Each year we offer differential
pricing in all LDCs. In 2009, either governments or non-profit
organisations in 36 of these countries chose to purchase at the
differential prices. See p 93.
Building partnerships and capacity
The huge challenge of tackling development and diabetes poses
numerous dilemmas for the developing world that require
innovative approaches. While our strength is in diabetes care,
working in partnership is crucial to help address organisational
matters and increase the impact of our efforts.
Novo Nordisk already has a long history of working in partnership
with governments, ministries of health and other partners
through our World Partner Project. Launched in 2001, the project
focused on developing models for addressing diabetes healthcare
in developing countries. Together with partners, the World
Partner Project has had an impact through 31 programmes
in eight countries (Bangladesh, Malaysia, Tanzania, Zambia,
El Salvador, Costa Rica, China and India). Lessons from these
projects continue to inform our approach for fostering sustain-
able diabetes care.
We continue to seek innovative partnerships to improve access
to diabetes care for these vulnerable populations not being
supported in their current system.
Photo: To increase access to all people with diabetes, Mapoko Mbelenge
Ilondo, programme director, Global Diabetes Partnerships, builds models for
sustainable public–private partnerships in developing countries. In Tanzania,
for example, Ilondo has worked with the health ministry and the diabetes
association to integrate diabetes care into the country’s healthcare system.
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Biopharma-
ceuticals
Our specialised expertise with proteins and our understanding
of chronic disease are leveraged in our biopharmaceuticals
business to develop innovative and improved ways to treat
haemophilia and other rare coagulation disorders, growth
hormone deficiency, the symptoms of menopause and
inflammatory diseases.
Commitment
to haemophilia
Haemophilia is an inherited or acquired coagulation disorder and
people living with haemophilia lack, either partly or completely,
an essential clotting factor necessary to form blood clots. The
main danger is uncontrolled internal bleeding, which can cause
stiffness, pain, severe joint damage, disability and even death.
Novo Nordisk has a heritage of improving existing standards of
care. For this reason, our haemophilia pipeline has expanded to
include compounds targeting faster and more efficient treatment
of episodic bleedings, long-acting compounds to allow for less
frequent infusions and products administered by the more
convenient subcutaneous route.
We have a solid position in the treatment of haemophilia patients
who have developed inhibitors, or antibodies, to their missing
coagulation factor. NovoSeven® remains the only recombinant
treatment option for these patients. Our pipeline includes two
potential successors to NovoSeven®: a long-acting, recombinant
factor VIIa derivative and a fast-acting, recombinant factor VIIa
analogue. Both are in clinical development.
“In the absence of a cure, the challenge is to provide effective,
safe and convenient treatments that prevent bleeding as far as
possible,” says Anne Prener, corporate project vice president of
Haemostasis Management.
Expanded pipeline
Our ambition is to use our understanding of haemophilia to
develop new compounds to offer improved treatment options
for all people with haemophilia and for the treatment of many
rare coagulation disorders.
In order to improve upon existing treatments for haemophilia A
using factor VIII, we had to first produce a third-generation factor
VIII compound. We expect to launch this new recombinant factor
VIII treatment for haemophilia within the next few years while we
continue to develop a longer-acting formulation. Our goal is to
Photo: Egon Persson, principal scientist, Haemostasis Biochemistry, is an
inventor of a fast-acting, recombinant factor VIIa analogue currently in
a phase 2 clinical trial. A potential successor to NovoSeven®, it is intended
to deliver predictable, sustainable clotting fast, as shown in the diagram.
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Creating value
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by improving
treatment
treatment
convenience
convenience
24 Novo Nordisk Annual Report 2009
improve treatment by developing a long-acting concentrated
formula to reduce frequency and infusion times, which can be
as long as 45 minutes every other day.
During 2009, we initiated a phase 1 trial for a long-acting,
recombinant factor IX compound for haemophilia B that is
intended to be used once a week. This would offer patients
greater convenience compared to current prophylactic treatments
to help prevent bleeding, which have to be infused twice a week.
In most of the world, patients with congenital factor XIII deficiency
do not have any treatment options. The only treatment available
in some countries is made from human plasma, which may involve
risk of bloodborne viruses. Our phase 3 clinical trial for a safer
recombinant factor XIII treatment involves 40 patients and is
expected to be completed in 2010. We are investigating the same
molecule to reduce the need for blood transfusions for cardiac
surgery patients.
New generation of NovoSeven®
Novo Nordisk developed NovoSeven® for the 3,500 people
with haemophilia who develop inhibitors, or antibodies, to
other replacement factor therapies. Our factor VIIa product,
NovoSeven®, was a significant innovation when launched and
remains the only recombinant medication available for haemo-
philia patients with inhibitors. It provides effective treatment
for rapid control of bleeding episodes and has been a major
advancement in the treatment of haemophilia patients who
have developed inhibitors, for whom there were few other
treatment options. NovoSeven® is also the only recombinant
medication approved for the treatment of bleeding episodes
in acquired haemophilia factor VII deficiency and, in Europe,
Glanzmann’s thrombasthenia.
Our continuous efforts to make NovoSeven® more convenient
and more effective include the launch in 2008 of a NovoSeven®
room temperature stable formulation that has a smaller infusion
volume for added convenience. Because NovoSeven® room
temperature stable does not need to be refrigerated, it is
portable, which may allow bleeds to be treated faster8. After
initial launch in the US in 2008, we successfully introduced
the product in 24 markets in 2009.
Novo Nordisk has a heritage
of improving existing standards
of care. Our long-term
ambition is to develop more
effective, safe and convenient
treatment options for people
with haemophilia.
To develop new therapeutic approaches for prevention of
bleeding based on the established efficacy of factor VIIa, we
initiated a phase 2 clinical trial in 2009 for a long-acting derivative
of recombinant factor VIIa. The same molecule is also being
investigated for subcutaneous use. Another phase 2 trial is
currently ongoing to determine the optimal dose and safety
profile of a new recombinant factor VIIa analogue with an even
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Expanded pipeline for
haemophilia and rare
coagulation disorders
Recombinant
factor XIII analogue
Recombinant factor
VIIa single dose*
ur activities in
hilia and rare
ulation disord ers
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Long-acting,
recombinant factor IX
Recombinant
factor VIII products
Contin
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Research and
development
commitment
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Recombinant
factor VIIa room
temperature stable*
Recombinant
factor VIIa
for prophylaxis*
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a ti o
evelop the next g e n e
n t
of treatments with r e c o m b i n
h i b it o rs
factor VIIa for patients w i
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Subcutaneous
administration
* Not approved in all markets.
Long-acting, recombinant
factor VIIa derivative
Fast-acting,
recombinant factor
VIIa analogue
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faster onset of action than NovoSeven® and the ability to form
even stronger clots in a shorter time.
Expanding access to care
As our focus on haemophilia has expanded, so has our
commitment to the global haemophilia community. We
established the Novo Nordisk Haemophilia Foundation in 2005
to address the significant need for improving haemophilia care
and treatment in developing countries, where haemophilia is
not a healthcare priority and many patients go undiagnosed or
are inadequately treated. Our donations to the NNHF, including
15.4 million Danish kroner in 2009, support 28 projects and five
fellowships in 24 developing and emerging countries. By working
with partners across all areas of the haemophilia community
with local ownership of projects, the NNHF aims to ensure the
sustainability of development programmes. See nnhf.org for
more information.
Changing Possibilities
in Haemophilia®
Building on our long-standing concerted efforts in diabetes, called
Changing Diabetes®, we launched a similar strategic initiative in
late 2008 called Changing Possibilities in Haemophilia®. Under
this umbrella, we seek to partner with physicians and the wider
haemophilia community to help build a better tomorrow for
people with haemophilia. We also collaborate with governments
and healthcare policy-makers to track quality of life issues for
people who have haemophilia, and help set standards for the
level of treatment that this patient group receives.
We partner with physicians
and the wider haemophilia
community to help build
a better tomorrow for
people with haemophilia.
Collaboration with the haemophilia community
To strengthen our collaboration with the global haemophilia
community, we have embarked on a psychosocial study to
determine how to best support the needs of those with
haemophilia. A multi-disciplinary team of healthcare profes-
sionals and patient representatives met in Montreal, Canada,
in September 2009 to establish a global advisory board on
psychosocial issues in haemophilia. Based on discussions from
this meeting, we are beginning a structured process of enquiry,
seeking a broad spectrum of input about life with haemophilia
in the family, the school setting, the workplace and the wider
community. Our hope is that findings from the study will
uncover ways to improve the quality of life for people with
haemophilia and those caring for them. The programme will
be conducted in close collaboration with experts and patient
representatives and is inspired by our existing DAWN™
(Diabetes Attitudes Wishes and Needs) programme.
26 Novo Nordisk Annual Report 2009
In 2009, we also made a commitment with the World Federation
of Hemophilia to further the haemophilia cause each year on
World Hemophilia Day as an official sponsor.
Continued medical education
Some types of haemophilia are particularly rare, so few health-
care providers have extensive experience with treatment.
Through the Novo Nordisk Haemophilia Grants & Awards
programme, Access to Insight, we offer support to encourage
doctors and scientists to enhance their understanding of
haemophilia and share best practices for treatment to improve
care. We also sponsor an accredited training programme and
scientific sessions at major congresses such as the World
Federation of Hemophilia and the International Society of
Thrombosis and Haemostasis.
Leadership
and innovation
In determining which businesses our company should be in,
we consider our core strengths in protein engineering and
chronic disease as well as the potential for global market
leadership.
Leadership and innovation in human growth hormone
Through our expertise in protein synthesis based on recom-
binant technology, Novo Nordisk has become one of the world’s
leading producers of human growth hormone. Norditropin®
builds on our 40-year commitment to growth hormone treat-
ment and is a market leader because it is unique: it is the only
liquid growth hormone product with a formulation that does
not require refrigeration and is available in a prefilled, ready-to-
use device.
Growth hormone deficiency affects the pituitary gland, a small
gland located at the base of the brain that produces growth
hormone and other hormones. If the pituitary gland does not
produce enough growth hormone, growth is slower than normal.
Children need growth hormone to grow to normal height.
In adults, growth hormone is needed to maintain the proper
amounts of body fat, muscle and bone. Research shows that
children with short stature are more likely to experience difficulty
at school and adults with growth hormone deficiency have
poorer-than-average health-related quality of life.
Since human growth hormone is a protein that can work effec-
tively only through injection, we have drawn on our technological
expertise in injection devices to improve growth hormone delivery
systems and products. We launched new devices in some markets
in 2009, including an improved NordiFlex™ pen, which studies
indicate has a 40% lower dose force.
To further ease treatment for patients with this chronic deficiency,
we are also developing a once-weekly growth hormone derivative
to reduce the number and frequency of injections. A phase 2
trial of this compound was successfully completed in adult patients
in 2009.
Supporting improved treatment outcomes
To improve treatment outcomes for people with growth hormone
deficiency, we support healthcare provider education and scientific
research. NordiScience® supports physicians with endocrine
develop new treatments for these diseases. This work is conducted
in Denmark and at our newly opened research centre in Seattle,
Washington, US. The Seattle centre is part of an effort to further
globalise research and development.
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research and educational services and support, including clinical
symposia, fellowship grants and access to scientific publications.
NordiNet®, an international outcome study including data from
more than 5,000 patients, is one example of our commitment
to long-term studies that track treatment success and safety.
The NordiNet® platform is an electronic data-capturing tool for
patient outcome evaluations that gives healthcare providers in
certain countries access to software that determines bone age.
Since human growth hormone
is a protein that can work
effectively only through
injection, we have drawn
on our technological expertise
in injection devices to improve
growth hormone delivery
systems and products.
Low-dose hormone replacement
Novo Nordisk launched its first low-dose hormone replacement
product, Activella®, in the US in 2008. It was introduced as
Activelle® in Europe in 2009. Our low-dose topical hormone
replacement treatment, Vagifem®, was approved in the US in
November 2009 and by EU regulatory authorities in January 2010.
These products build on our 25 years of experience with hormone
treatment for menopausal symptoms. Our long-standing position
is that hormone replacement therapy for women should be
prescribed at the lowest effective doses and for the shortest
time periods consistent with treatment goals and risks assessed
for individual women.
Development projects target inflammatory diseases
Leveraging our protein expertise to help patients with other types
of chronic disease and add to our clinical pipeline of products, we
now have three projects in early clinical development targeting
chronic inflammatory conditions. These projects target rheumatoid
arthritis, psoriatic arthritis and systemic lupus erythematosus.
By investing in early-stage research in this field we hope to find the
underlying causes of different inflammatory conditions and
DKK billion
Biopharmaceuticals
Sales development
(cid:81) Haemostasis management
(NovoSeven®)
(cid:81)(cid:3)Growth hormone therapy
(cid:81)(cid:3)Hormone replacement
(cid:3)therapy
(cid:81)(cid:3)Other products
2009
2008
2007
2006
2005
0
5
13.6
12.2
11.4
10.9
9.7
10
15
Novo Nordisk Annual Report 2009 27
How
we work
Making a difference to patients and society is what we are all
about. If we can improve treatment outcomes for people with
chronic diseases, keeping them healthy and productive, we can
help not only individuals needing treatment but also their families
and their communities.
Our aspiration is to be the world’s leading diabetes care company
and, ultimately, to defeat diabetes and leverage our expertise in
the fight against other chronic, non-communicable diseases. This
is our core business proposition, the essence of Novo Nordisk’s
contribution to sustainable development and the heart of our vision.
We accomplish this by expressing our values in all of our actions,
focusing on patients first. Our impact on society is reflected
by the number of patients who benefit from our products and
our efforts to catalyse change in healthcare systems and train
patients and healthcare providers.
Novo Nordisk Way
of Management
The Novo Nordisk Way of Management, the framework within
which we work, supports our culture of innovation and responsi-
bility. Aligned with the principles of the United Nations Global
Compact in the areas of human rights, labour, the environment
and anti-corruption, the Novo Nordisk Way of Management
ensures the long-term growth and welfare of our company
and helps us find the right balance between compassion and
competitiveness.
In 2009, we continued to drive initiatives related to the UN Global
Compact principles across our value chain. Many of these
initiatives are described in the following pages. A comprehensive
account is found in our annual Communication on Progress. See
annualreport2009.novonordisk.com/governance-and-reporting/
un-global-compact.aspx.
The Novo Nordisk Way of Management includes our vision, our
values and our commitment to the Triple Bottom Line principle. A
follow-up methodology for auditing and validating performance
and policies in key areas supports cross-organisational under-
standing and helps ensure implementation.
While our values are global, they are also owned and lived at a local
level, providing flexibility and fostering diversity in ideas. As our
business grows, the Novo Nordisk Way of Management provides
Photo: Our partnership approach to addressing climate change and preparing
our business for a carbon-constrained future resulted in a new business
model that has helped drive the market for renewable energy. Priya Matzen,
programme director, Global TBL Management, has been a driving force
behind our climate strategy. See pp 31 and 35.
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28 Novo Nordisk Annual Report 2009
a foundation to ensure that we stay on course, focused on
innovating in ways that support our vision and are consistent
with our values.
“Achieving targets is only one aspect of performance. It is just
as important that employees work in a way that expresses Novo
Nordisk’s core values,” says Lars Rebien Sørensen, president and
chief executive officer.
The Novo Nordisk Way of Management’s follow-up methodology
provides a tool to assess the degree to which values are embedded
in our actions and operations. It also helps ensure that the frame-
work can stand the test of time and different cultures.
The entire framework for the Novo Nordisk Way of Management
is detailed at novonordisk.com/about_us.
Triple Bottom Line management
We are committed to operating in a way that is financially,
environmentally and socially responsible. Anchored in the
company’s bylaws, the articles of association, and the Novo
Nordisk Way of Management, our commitment to the Triple
Bottom Line principle helps us balance short-term profitability
with longer-term societal interests.
Applying the Triple Bottom Line principle in decision-making
serves two purposes. It builds trust and protects our licence to
operate and it helps drive innovation and long-term growth.
This is how Triple Bottom Line management generates value.
We monitor trends that could impact our business success and
proactively respond to stakeholder expectations and emerging
Our vision
• We will be the world’s leading diabetes care
company.
• We will offer products and services in other
areas where we can make a difference.
• We will achieve competitive business results.
• A job here is never just a job.
• Our values are expressed in all of our actions.
Our values
Each Novo Nordisk employee is expected to be:
• Accountable
• Ambitious
• Responsible
• Engaged with stakeholders
• Open and honest
• Ready for change.
Our Triple Bottom Line approach
Financially and economically responsible
Patients
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Socially
responsible
Environmentally
responsible
issues such as the right to health, business ethics and bioethics.
We also take responsibility for addressing global challenges that
are critical to our ability to manage a sustainable business for the
long term.
We focus on fighting the diabetes pandemic and confronting
the climate change challenge. These are areas where we have
an opportunity and an obligation to put effort behind making
a real difference. Our impact goes beyond our own operations;
by demonstrating results we can inspire others to join forces.
We also seek to influence public policy and drive societal change
towards more sustainable practices.
Measuring values-based orientation
As part of the follow-up methodology, we have a global
facilitator team consisting of senior people with deep under-
standing of our business and the business environment. They
evaluate the extent to which business units operate in compliance
with the Novo Nordisk Way of Management, and the team has
a formal reporting line to the chairman of the Board.
“Facilitation is the follow-up method used to document com-
pliance regarding the Novo Nordisk Way of Management,”
says Kim Bundegaard, senior vice president, Business Assurance.
“It provides a systematic approach to gaining insight into how
units in the organisation are living the Novo Nordisk Way of
Management.”
For some units, facilitations take place annually; for others, the
process takes place once every three years. From 30 September
2008 to 30 September 2009, 70 facilitations were conducted,
covering units with more than 12,000 employees. Of these, more
than 3,000 employees were interviewed to determine how
corporate values are being lived and implemented throughout
the organisation.
Observations from this process were reported to the Board in
December 2009. To maintain a strong level of compliance, more
than 300 recommendations or actions were issued during the 2009
facilitations. Areas identified for increased focus include future
business direction and prioritising process improvement initiatives.
Novo Nordisk Annual Report 2009 29
Our impact on society
We hold ourselves accountable to shareholders and other
stakeholders that may affect or be affected by the company’s
activities. As a business, Novo Nordisk generates wealth for
society and contributes to socioeconomic development through
sustainable business practices, investment and employment.
As a pharmaceutical innovator, we provide knowledge, research
and development and healthcare products. Our outreach
programmes also improve awareness, diagnosis and treatment.
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Patients and those at risk
Novo Nordisk’s products are sold to
hospitals, doctors and healthcare
professionals for treatment of their
patients. Novo Nordisk has a 51%
market share of the global insulin
market (by volume). We also advocate
on behalf of patients for systemic
healthcare change to support chronic
disease management. See pp 20–23
and p 93.
Novo Nordisk
Shareholders and
business partners
We aim to communicate openly with
shareholders about the company’s
fi nancial and business development as
well as strategies and targets. See pp
47–49. We also purchase resources
and inputs from more than 38,000
suppliers. See annualreport2009.
novonordisk.com/social/responsible-
sourcing.aspx.
Our people
Employees’ knowledge and
productivity are a major part of
the company’s intangible value.
Our employees contribute to
the communities in which we
operate through volunteerism and
payroll taxes. See pp 32–33 and
annualreport2009.novonordisk.com/
social/employee-volunteering.aspx.
Public sector
Environment
We use water, energy and other raw
materials to produce therapies for
patients. As a result of our operations,
we produce emissions and waste.
Managing our environmental impact
and resource consumption reduces
our costs and minimises our impact
on the environment. See pp 93 and 95
and annualreport2009.novonordisk.
com/environment.aspx.
Communities
As a business, Novo Nordisk
generates wealth for society and
contributes to socioeconomic
development through its sustainable
business practices, investment
and employment (estimated direct
and indirect impact amounting to
96,500 jobs globally). See p 94 and
annualreport2009.novonordisk.
com/social/donations.aspx.
Tax payments fund services offered
by the public sector. Novo Nordisk’s
tax payments are an estimated 2.9%
of corporate taxes in Denmark. In
total, Novo Nordisk’s income taxes in
Denmark for the year amounted to
854 million Danish kroner. See p 65
and annualreport2009.novonordisk.
com/fi nancial-economics/tax.aspx.
30 Novo Nordisk Annual Report 2009
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Engaging
stakeholders
The burdens of chronic disease will grow and challenge societies
in new ways as the global population expands and ages and
increasing urbanisation contributes to more sedentary lifestyles.
By involving stakeholders and working in partnership, we believe
we can better understand these challenges and cocreate solutions
that are more likely to succeed.
Our key stakeholders are patients. We engage with all other
stakeholders – including healthcare providers, payers, employees,
investors, suppliers and other business partners – in support of
improved treatment outcomes for people with diabetes and other
chronic diseases. Examples of our stakeholder engagement and
partnerships are included in this section, but other examples can
be found throughout this report and online at annualreport2009.
novonordisk.com/stakeholder-engagement.aspx.
How we engage
Long-term partnerships have for many years created value for
Novo Nordisk and for society. We partner with others to address
societal problems that are integral to our long-term business
success, to leverage our assets and expertise to deal with the
problem, to play a role in mobilising stakeholders and driving
concerted action, and finally to measure and learn from results.
Recognising the complexity of climate change, we have taken a
partnership approach to address it, teaming up with others who
have specialist knowledge in the field. Our CO2 reduction target
was set in close collaboration with the World Wildlife Fund (WWF)
under the WWF Climate Savers Programme. Our ongoing
partner ship with DONG Energy (see p 36) has allowed us to find
a cost-neutral way of converting power supplies for our Danish
operations to wind energy, an important element in achieving
the target.
When setting the target, we shared internal data with WWF
and had a very open dialogue. WWF challenged us to set the
bar higher than we would have otherwise done.
The UN Resolution on diabetes, adopted in December 2006
to increase awareness of the growing diabetes pandemic and
develop policies for the prevention, treatment and care of
diabetes, is one example of the kind of change that is possible
through long-term partnerships. It was the result of a multi-
stakeholder campaign led by the International Diabetes Federation
in which Novo Nordisk was an active and supportive partner.
It recognises the urgent need to pursue multilateral efforts to
promote and improve human health and encourages UN member
states to have strategies for diabetes prevention, diagnosis and
treatment as part of the sustainable development of healthcare
systems.
Patient support
Our core business is to help people, seeking to reduce suffering
and improve health. Our commitment to patients is paramount,
and engaging with patients and patient organisations and
understanding their needs is an important part of how we
work.
An example of the value of patient dialogue is the DAWN™
programme – the largest global survey to uncover the psychosocial
aspects of diabetes and the attitudes, wishes and needs of people
with diabetes. Initiated by Novo Nordisk in 2001, the survey
included people with diabetes and healthcare professionals from
13 countries.
Today, DAWN™ serves as a patient advocacy platform, calling
for concerted action to improve diabetes care in more than
30 countries and influencing academic research, educational
programmes and new approaches to treatment at hospitals and
clinics. In some countries, national task forces and coalitions are
now coordinating efforts to implement patient-centred care and
community initiatives inspired by DAWN™ surveys.
Since the DAWN™ study started in 2001, other international
studies have been completed, including the DAWN™ MIND
study. The DAWN™ MIND study aims to implement monitoring
of well-being in people with diabetes as part of routine diabetes
care. Monitoring helps identify psychological needs that are
otherwise likely to stay unrecognised.
We are also launching a psychosocial survey of people with all
types of haemophilia to better understand their needs and wishes
and help support efforts to improve care. See p 26.
Collaborating for innovation
Our commercial focus is on a few mutually re-enforcing protein-
based therapeutic areas. Within each, we are committed to
improving the quality of life for people living with the particular
disease. We search for innovative biologics at all stages of
development, from early discovery to clinical phases.
Always a pioneer in scientific innovation, we have entered into
preliminary collaborations with biotechnology-based research
companies, resulting in many technological advances. These
include our work with research and development companies to
formulate therapeutic proteins and generate human monoclonal
antibodies. One example of our success in collaborating to drive
innovation is our clinical development of oral insulin and GLP-1
formulations. See p 20.
By involving stakeholders
and working in partnership,
we believe we can better
understand healthcare
challenges and cocreate
solutions that are more
likely to succeed.
Our responsible sourcing programme is another example of how
our commitment to partner with others is integrated in the way
we do business. The programme also underpins the company’s
commitment to the UN Global Compact and the Universal
Declaration of Human Rights. We have established a methodology
for assessing our supplier base, including screening principles and a
model to map and manage social and environmental risks relevant
for different types of procurement.
Novo Nordisk Annual Report 2009 31
Bioethics dialogue
Dialogue with stakeholders includes sharing views and knowledge
about our bioethical work. This process, which includes engage-
ment with non-governmental organisations, inter-governmental
organisations, governments and regulators, researchers and
patients, helps us reconcile ethical dilemmas about research and
development and stay attuned to societal concerns.
In 2009, our long-term efforts to build a partnership in Denmark
to find ways to refine and reduce the use of animal experimen-
tation were recognised with an award at the World Congress
on Alternatives and Animal Use in the Life Sciences in Rome. The
main focus of the collaboration of companies and universities is
to do research in ways that consider animal welfare and to share
information and ideas about alternatives to animal testing.
Our people
Looking at our projected growth, 75% of our people, the heart of
our company, will be outside Denmark in 10 years’ time. Embracing
diversity and embodying a global mindset are necessary to
successfully manage the increasing globalisation of our business.
To support sales growth, new product launches and a strong
pipeline of future treatments, we hired 4,640 new employees in
2009. Our employees numbered 29,329 at year end, an increase
of more than 8% compared to 2008. As we expect this rate of
growth to continue for the forseeable future, the importance
of ensuring that all employees understand and demonstrate the
Novo Nordisk Way of Management is huge. We want to grow the
company in a way that is consistent with our values and culture.
Diversity and inclusion
We believe diverse management teams and people with different
perspectives are best suited to drive performance and foster
innovative thinking. Our ambition is that within five years of the
launch of our diversity strategy at the end of 2008, all senior
management teams will include employees of both genders
and different nationalities.
At the end of 2009, diversity was reflected in 50% of senior
management teams, compared to 43% at the end of 2008. While
we have chosen to report on our progress annually, changing our
organisational culture is a long-term objective that involves training
and mentoring, talent management and succession planning.
To help foster opportunity, greater transparency has been
introduced into the succession-planning process. For all key
positions, succession planning must consider and include
employees of both genders as well as both local and non-local
employees.
Training in diversity and cultural inclusion is offered to all
employees and is integrated into the company’s leadership
development programmes for vice presidents, managers
and young talent to build leadership capabilities. We have
also established diversity networks in the US and Europe.
Photo: Per Valstorp, senior vice president, Product Supply, has successfully
fostered an innovation culture and mindset through the company’s cLEAN®
programme. Implementation has been driven by an 80% focus on culture
and mindset and 20% on operational and technical tools.
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32 Novo Nordisk Annual Report 2009
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Innovative culture
In 2009, we undertook an assessment of the current state of our
innovation systems and culture to determine how to build on and
increase innovative activity. One example of how innovation is
fostered throughout the organisation is our cLEAN® programme.
cLEAN® is our version of LEAN – a well-known process optimisation
philosophy. The ‘c’ stands for current and emphasises that working
with cLEAN® is a continuous journey.
The cLEAN® mindset is an example of our values in action,
empowering employees to be accountable, ambitious and ready
for change. The programme has also involved a substantial
investment in training to improve capabilities at all levels as well
as development of leadership competences to stimulate an
innovation culture.
Developed over the past six years, cLEAN® has allowed us to
transform proprietary knowledge into value-optimising quality,
delivery and cost. Progress toward many of our environmental
targets and much of the recent improvement in our gross margin
are attributable to cLEAN® process innovations. Savings from
process innovations have been invested in research and devel-
opment activities and sales force expansion, helping to secure
the long-term future of the company.
To challenge ourselves to continuously improve, we are intro-
ducing new pilot programmes in 2010 to foster innovation in new
ways. One project involves managing innovation across the value
chain – from governance to incentives – to make launching
innovative projects routine.
Our ambition is that by
2014 all senior management
teams will include employees
of both genders and
different nationalities.
Life-changing careers
Our global employer branding programme, Life-changing
careers, launched in 2008, aims to attract and retain employees,
particularly in countries where competition remains high. To
attract and retain the talented people needed to drive our
business, we must provide an attractive work environment. Novo
Nordisk has consistently been named among the best places to
work in Denmark. During 2009, we were also recognised as
being among the best places to work in other markets, including
Argentina, France, Poland, South Africa and the US.
We now have a consistent, transparent target-setting and
performance management process across our business which
supports employee mobility across regions. Employees typically
have two target appraisals a year when, together with their
manager, they set goals for the year, assess achievements and
also define a preferred career path.
Talent and leadership programmes are in place targeting all
levels, and several new programmes have been implemented
to facilitate early talent-spotting. As our business grows,
we have sought to ensure that all new managers with no
prior management responsibility at Novo Nordisk complete
leadership training within the first six months of their
appointment. More than 500 managers completed this
programme in 2009.
Talent development programmes such as our Lighthouse
programme for vice presidents and general managers use
cooperative learning processes, including engagement with local
hospitals, communities and non-governmental organisations.
Participants are encouraged to find creative ways to implement
Novo Nordisk’s commitment to patients, stakeholders and
sustainable business practices.
Working with integrity
Maintaining and building trust is key to sustaining our licence to
operate and innovate, and this requires that we operate ethically
and with transparency across our value chain, from conducting
clinical research to interactions with healthcare providers and
patient organisations.
Institutionalising ethical conduct requires more than codes
and standards; it requires the fostering of a healthy corporate
culture. The Novo Nordisk Way of Management (see p 28)
outlines expectations for employee behaviour in all spheres, and
adherence to the corporate values, which include accountability,
is monitored as part of our ongoing facilitation process.
Our business ethics policy is one of 13 policies that are part of
the framework of the Novo Nordisk Way of Management. We
have also implemented policies and procedures tailored to our
operations and regulatory environment to provide guidance on
governing the business conduct of our employees, agents and
contractors. Our approach includes global procedures, backed
by mandatory training and review by internal auditors.
Establishing standards
Our business ethics policy is implemented through three separate
but complementary procedures. Two apply to everyone at Novo
Nordisk, providing guidance on business ethics and interaction
with third-party agents such as marketing consultants. The third
outlines standards for interacting with healthcare professionals
and applies to relevant employees.
Performance management
and leadership development
Developing the leadership we need for long-term sustainable
growth requires that we support our people to develop
their qualifications, competences, employability and career
opportunities. We also offer competitive remuneration and
employment conditions. Increasingly, we are integrating
performance management in leadership processes, moving
towards performance leadership.
The procedures explain minimum requirements to ensure
adherence to standards and compliance with local laws.
We continuously seek to strengthen and update standards
to reflect the dynamic regulatory environment, and integration
of new and updated policies and regulations is ongoing. The
procedures were revised for the second time in four years at
the end of 2009. Circumstances under which employees are
obliged to report possible misconduct for investigation have
been clarified.
Novo Nordisk Annual Report 2009 33
We have further strengthened our global procedures governing
clinical investigations and observational studies to prepare for
significant growth in the number of participants who will be
involved in our clinical research programmes in the next few
years. To ensure that everyone involved in clinical development
lives up to the new standards, we are launching an e-learning
programme for clinical research ethics in 2010.
In partnership with the University of Copenhagen and Henk
ten Have, director of UNESCO’s Division of Ethics of Science and
Technology, we are developing a set of online tools to support
ethical decision-making for bioethics dilemmas. The tools will
be launched in 2010 and it is our intention that they will be
hosted by a third party and made widely available online.
Training and implementation
We are committed to all necessary steps of communicating
and implementing the standards, policies and procedures,
and this includes continual training on our ethical and legal
obligations. As we grow, adding more than 4,000 new
employees annually, ongoing training helps ensure that all
new employees are familiar with their responsibilities. Training
content is selected through an analysis of ethical trends and
a formalised risk assessment.
All staff involved in sales, marketing, regulatory affairs and
public affairs must complete training that provides guidance,
including examples of what constitutes unacceptable behaviour.
Business ethics training was also required of all managers
throughout the company for the first time in 2009. Of this
group, 91% completed the required training. A global procedure
ensures that in-house legal counsel and regulatory experts
review and approve marketing materials and activities, and the
review of promotional materials is documented in an electronic
review system. The procedure, intended to be a minimum
requirement, also involves a second-tier review at the affiliate
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How we work with business ethics
Leadership
Board of Directors and
Executive Management
• Communication
• Role models
Programme oversight
Business Ethics Steering Group
• Monitor performance
• Review resources
Audit and assurance
Group Internal Audit
and facilitators
• Audits
• Assurance
• Hotline
• Facilitations
• Investigations
Implementation
and sanctions
Management
• Leadership
• Implementation
• Sanctions
• Role models
Strategic development
and compliance
Business Ethics
Compliance Offi ce
• Policy and procedures
• Strategy development
• Compliance advice
• Implementation tools
• Training
• Societal engagement
• Investigations
Local
implementation
Regional and local lawyers
• Policy and procedures
• Local trendspotting
• Compliance advice
• Training
• Investigations
34 Novo Nordisk Annual Report 2009
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level to ensure compliance with local regulations in the market
where materials will be used.
another employee for good faith reports of potential or
suspected violations of laws, regulations or company policies.
Our dedicated internal website includes business ethics
proce dures and other information in eight languages, including
descriptions of controls and investigations and a toolbox with
tools for local training.
Monitoring and oversight
We monitor adherence to ethical standards in several ways,
ensuring a consistent, multifaceted approach. First, our
facilitation process includes interviews with more than 3,000
employees throughout the organisation each year to monitor
how our values are being lived and implemented throughout
our business.
Business ethics audits are conducted by Group Internal Audit, using
risk assessments to determine which units to audit. These audits
include on-site interviews and reviews of documentation to assess
knowledge of Novo Nordisk’s business ethics procedures and how
effectively those procedures are being implemented. More than
30 business ethics audits were conducted in 2009 and more than
100 findings have been issued.
Maintaining and building trust
is key to sustaining our licence
to operate and innovate, and
this requires that we operate
ethically and with transparency
in all aspects of our business.
Investigations of suspected business ethics misconduct are also
conducted by Group Internal Audit. Actions taken on substan-
tiated cases have included training activities or disciplinary actions
such as warnings and dismissal of employees.
Employees are encouraged to ask questions about compliance
issues. They also have an obligation to report possible or suspected
misconduct. Employees can report misconduct to their immediate
manager, through our internal compliance hotline, to the local or
corporate counsel or to the Business Ethics Compliance Office,
or to the investigations unit of Group Internal Audit, which has
a formal reporting line to the Audit Committee of the Board of
Directors. Fourteen business ethics cases were reported through
the compliance hotline in 2009.
Staff and stakeholders are also invited to confidentially report
business ethics concerns and financial fraud to the Audit
Committee through our global whistleblower system. Reports
of misconduct are treated confidentially and employees who
use the compliance hotline or the whistleblower system may
choose to remain anonymous. Managers who receive reports
of misconduct are obligated to report this directly to the Audit
Committee Secretary or through the local counsel.
While ethical issues can be reported anonymously, we also
have a policy prohibiting retaliation by any employee against
We investigate all reported allegations of misconduct and initiate
corrective action where appropriate. Although each situation is
considered individually, Novo Nordisk evaluates and implements
the appropriate action to address inappropriate conduct and
deter future violations. Disciplinary action may include retraining,
dismissal or other appropriate discipline of the individual involved
as well as discipline of the supervisor.
The Business Ethics Steering Group sets strategy and oversees
implementation of ethical standards, procedures and training
by the Business Ethics Compliance Office. The steering group is
comprised of senior executives from across the organisation and
supports the development, operation and monitoring of ethics
and compliance activities.
Responsibility for implementing business ethics rests with the
Business Ethics Compliance Office, which reports to the general
counsel and has the authority to report directly to the Audit
Committee. The Business Ethics Compliance Office identifies
and assesses compliance risks, enforces procedures related to
business ethics, provides advice to the organisation on compliance
issues, and is responsible for developing and revising policies as
necessary.
Environmental
responsibility
This was a particularly notable year from a climate perspective,
both for our company and the global community. At the end
of 2009, we had exceeded our 2014 target of a 10% absolute
reduction in CO2 emissions compared to 2004.
Since 2004, emissions growth has been kept below the rate
of production increases, and in 2008 we achieved an absolute
emission reduction while production continued to grow. The
reduction target was supported by key performance indicators
tied to our internal Balanced Scorecard and our long-term
incentive programme (described on p 39).
A global climate framework
Our commitment to reducing environmental impact goes beyond
what we are able to accomplish in our own facilities. “The trans-
formation to a carbon-neutral economy is necessary to secure
global sustainable development,” says Lise Kingo, executive vice
president and chief of staffs. “This will require collaboration
between government, business and science to drive innovative
change, supported by a long-term, stable policy framework that
incentivises more sustainable practices.”
To raise awareness of the need for a successful outcome of
the UN Climate Change Conference held in Copenhagen in
December 2009, Novo Nordisk provided seed money and was
a driving force behind the World Business Summit on Climate
Change held in May 2009. The summit was organised by the
Copenhagen Climate Council and supported by the Danish
government, UN Global Compact, and the World Business
Council for Sustainable Development. The summit produced
a list of six items that the business community believed to be
necessary ingredients of an effective global climate agreement.
Novo Nordisk Annual Report 2009 35
To manage water usage, we conducted an assessment of the
water we use in our production processes and our impact on
local water supplies, identifying areas of risk where greater
control was needed as well as opportunities for additional
reductions in consumption. The assessment identified oppor-
tunities to reduce the amount of water used at our insulin
filling plants.
Total water
consumption
Water used at all
production sites
1,000 m3
4.0
3.5
3.0
2.5
2.0
2005 2006 2007 2008 2009
At our Chartres production facility in France, our focused efforts
led to a 50% drop in water usage at the site between 2005 and
2009. The amount of water used to produce each Penfill® 3 ml
holder for NovoPen® 3 dropped to 0.75 liters from 2.5 liters,
a reduction of 70%. Production at Chartres increased by 60%
during this four-year period.
During 2009, we conducted detailed water mapping and
identified opportunities for water savings at our Montes Claros
facility in Brazil. This is our largest insulin filling facility, and it
is located in a water-stressed area. A number of projects to
optimise water use have been initiated. Total output at Montes
Claros is increasing, so we anticipate that water usage will still
increase, but at a substantially lower rate. Water mapping of
other production facilities continues.
The additional production facility we are currently constructing
in Tianjin, China, has been designed to optimise water and energy
use and to be more water-efficient than the newest similar facility
in Brazil.
Reducing waste
Performance improvements were seen in all of our environmental
indicators in 2009 with the exception of waste. We are intent
on reducing the impact of our operations and during 2009 we
established a waste reduction plan, focusing on areas where we
have the greatest opportunities for reducing waste from our
production activities. To support waste reduction projects and
facilitate knowledge sharing, we are launching an internal waste
forum. Our plan is to develop longer-term waste reduction
targets beginning in 2011.
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We are, however, disappointed with the Copenhagen Accord,
the final outcome of the climate summit in Copenhagen at the
end of 2009. As a global business we had hoped for an ambitious,
binding and long-term global framework that would help guide
business decisions for future operations and chart the course
towards a low-carbon global economy. We recognise, though,
that it is at least a step in the right direction to have a formal
agreement on the need for deep cuts in global emissions to
hold the increase in global temperature below 2°C.
For the business community, we find it now more urgent than
ever to keep up momentum on initiatives that will mitigate
climate change, contribute to adaptation and drive sustainable
development. We will continue our work to develop a next-
generation climate action strategy, taking into account signals
from the summit process.
Creating value by reducing emissions
Savings from reduced energy consumption at our Danish
production facilities have been earmarked to purchase electricity
from a new offshore wind farm opened by our Danish energy
supplier in September 2009. Our energy consumption in
Denmark has dropped by 30 million kWh, and the cost savings
from these cuts are enough to purchase sufficient wind electricity
for all of the power needs at our Danish facilities once the new
wind farm, Horns Rev 2, is fully operational in 2010. Switching to
wind-generated electricity will result in an annual CO2 reduction
of 90,000–100,000 tons.
During 2009, we exceeded
our long-term target of
a 10% absolute reduction
in CO2 emissions.
Our commitment to reduce energy consumption and use
alternative energy sources where possible is global in scope.
Our Brazilian facility makes extensive use of hydroelectric
energy and biomass. As a result, the site has the lowest CO2
emissions among Novo Nordisk production sites worldwide.
We have participated in the Carbon Disclosure Project, which
measures disclosure on climate risk management, since its
inception in 2000. We are also a member of the project’s Nordic
Carbon Disclosure Leadership Index.
To further improve our disclosure and carbon risk management,
we are extending our climate strategy focus from production areas
to emissions from all transportation, including product distribution,
company cars and business travel. During 2010, we will assess
a baseline for emissions from company cars in our affiliates and
consolidate plans to reduce emissions from the entire car fleet.
Water usage
We recognise widespread concerns about water scarcity and the
potential effects of climate change on access to fresh water. In
line with our efforts to effectively manage resources, we have
intensified our focus on conserving water during the past two
years. In 2009, our water usage fell by 20% compared to 2008.
36 Novo Nordisk Annual Report 2009
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Corporate
governance
Our company is part of the Novo Group, a family of independent
companies with a common history and shared values. The Novo
Group comprises a holding company, Novo A/S, wholly owned
by the Novo Nordisk Foundation.
The framework for our corporate governance system consists
of internal principles as well as external regulation and codes,
including compliance with applicable securities laws in Denmark,
the US and the UK. We are also in full compliance with the Danish
Corporate Governance Recommendations and are in general
compliance with corporate governance standards as a foreign
issuer listed on the New York Stock Exchange and the London
Stock Exchange. We expect to receive approval to delist our
shares from the London Stock Exchange during 2010.
Novo Nordisk’s values are consistent with principles of good
governance, and the Novo Nordisk Way of Management forms
the internal values-based governance framework (see p 28).
Governance
Accountability to shareholders
Novo Nordisk holds itself accountable to shareholders for its
performance. The company seeks to enhance the accuracy,
completeness and reliability of the information provided in the
company’s annual financial and non-financial reporting through
internal controls, assurance and independent audits. Reporting helps
shareholders assess the actions of the Board and management.
Shareholder rights
Novo Nordisk’s share capital is divided into A shares and B shares.
All A shares are held by Novo A/S, a Danish limited liability
company wholly owned by the Novo Nordisk Foundation, which
is a commercial, profit-making foundation. The B shares are
traded on the stock exchanges in Copenhagen and London and
in the form of ADRs on the New York Stock Exchange. The
company will, however, apply for delisting from the London Stock
Exchange in the first quarter of 2010. See p 48.
Each A share (= nominal value 1 Danish krone) carries 1,000
votes and each B share (= nominal value 1 Danish krone) carries
100 votes (see p 48). Special rights attached to A shares include
pre emptive subscription rights in case of an increase of the
A share capital and preemptive purchase rights in case of a sale
of A shares and priority dividend if the dividend is below 0.5%,
while B shares take priority for dividend between 0.5% and 5%
and B shares take priority for winding-up proceedings.
We are not aware of the existence of any agreements with
or between shareholders on the exercise of votes or control.
Shareholders have ultimate authority over the company and
exercise their right to make decisions regarding Novo Nordisk at
general meetings, either in person or by proxy. Resolutions can
generally be passed by a simple majority, while resolutions to
amend the articles are subject to adoption by at least two-thirds
of votes cast and capital represented unless stricter require-
ments are imposed by Danish company law. At the annual
general meeting, shareholders approve the annual report and any
amendments to the company’s articles. They also elect board
members and the independent auditor. All shareholders may,
no later than 1 February, request that proposals for resolutions
be included on the agenda. All shareholders may also ask
questions at the general meetings. Simultaneous interpretation
between English and Danish is available, and the meeting is
webcast live.
The Novo Nordisk Foundation
The Foundation supports Novo Nordisk in achieving its vision
and adhering to the Charter for Companies in the Novo Group.
All strategic and operational matters are solely decided by the
Board and the management of Novo Nordisk. Overlapping board
memberships help to ensure that the Foundation and Novo
Nordisk share a common vision and strategy.
Board of Directors
The company has a two-tier board structure consisting of the Board
of Directors and Executive Management. The two bodies are
separate and no person serves as a member of both. On behalf
of the shareholders, the Board determines the company’s overall
strategy and actively contributes to developing the company as
a focused global pharmaceutical company. The Board supervises
Executive Management in its decisions and operations and the
company may issue new shares or buy back shares in accordance
with authorisations granted by the general meeting and recorded
in the minutes.
The Board has 11 members, seven of whom are elected by
shareholders at general meetings and four by employees.
Shareholder-elected board members serve a one-year term and
may be re-elected at the general meeting. Board members must
retire at the first general meeting after reaching the age of 70.
A proposal for nomination of Board members is presented by
the Chairmanship to the Board, taking into account required
competences and reflecting the result of a self-assessment
process. The assessment process is based on written question-
naires and evaluates whether each Board member and executive
participates actively in board discussions and contributes with
independent judgement.
In nominating candidates, the Chairmanship seeks to achieve
a balance between renewal and continuity. Four of the share-
holder-elected board members are independent as defined by the
Danish Corporate Governance Recommendations, while three
shareholder-elected board members are related to the majority
shareholder through board or executive positions, and two
of these have also previously been executives in Novo Nordisk
(see pp 43–45).
Under Danish law, Novo Nordisk employees in Denmark are entitled
to be represented by half of the total number of board members
elected at the general meeting. Board members elected by
employees serve a four-year term and have the same rights, duties
and responsibilities as shareholder-elected board members. In 2009,
the Board met seven times. Four meetings were attended by all
board members; three of the members had to be excused from
attending one meeting each during the year. With the exception
of agenda items reserved for the Board’s internal discussion at each
meeting, executives attend and may speak, without voting rights,
at board meetings to ensure that the Board is adequately informed
of the company’s operations. Executives’ regular feedback from
meetings with investors allows board members an insight into major
shareholders’ views of the company.
Novo Nordisk Annual Report 2009 37
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Chairmanship
A chairman and a vice chairman elected by the Board from
among its members form the Chairmanship of the Board.
In 2009, the Chairmanship held seven meetings and both
members participated in all meetings. The Chairmanship carries
out administrative tasks such as planning board meetings to
ensure a balance between overall strategy-setting and financial
and managerial supervision of the company. It also reviews the
fixed asset investment portfolio. Other tasks include recom-
mending the remuneration of directors and executives and
suggesting candidates for election by the general meeting.
In practice, the Chairmanship has the roles and responsibilities
of a nomination committee and a remuneration committee.
In March 2009, the Board re-elected Sten Scheibye chairman
and Göran A Ando vice chairman.
Research and development facilitator
The Board has appointed a research and development facilitator
to assist the Board and Executive Management in preparing the
Board’s discussions about research and development. The key tasks
are reviewing R&D strategies and evaluating the competitiveness of
the R&D organisation, processes and projects. In March 2009, the
Board re-elected Göran A Ando as R&D facilitator.
Audit Committee
The Audit Committee currently has three members elected by
the Board from among its members. All members qualify as
independent and have been designated as financial experts as
defined by the US Securities and Exchange Commission (SEC).
In addition, two members have been designated as financial
experts under Danish law. In 2009, the Audit Committee held
four meetings and all members participated in all meetings except
for one occasion when one member was absent.
The Audit Committee assists the Board of Directors with
oversight of the external auditors, the internal audit function,
complaints regarding financial fraud and business ethics,
the financial reporting process and reviews of investments.
The Audit Committee conducts a self-assessment annually,
evaluating whether each member participates actively in
discussions and contributes with independent judgement.
In March 2009, the Board re-elected Kurt Anker Nielsen as
chairman and re-elected Jørgen Wedel as a member of the
Audit Committee. At the same time, Hannu Ryöppönen was
elected to the Audit Committee as a new member.
Whistleblower programme
Concerns over possible breaches of ethical business conduct
and financial fraud may be raised anonymously with the Audit
Committee by telephone or on the web in eight languages,
with no subsequent disciplinary or retaliatory action towards
the whistleblower. The whistleblower system is managed by an
external vendor. Employees may also report ethical misconduct
to our internal compliance hotline. See p 35.
Management of the company
The Board has delegated responsibility for day-to-day management
to Executive Management. Executive Management consists of the
president and chief executive officer and four other executives (see
p 46) and is responsible for organisation of the company as well
as allocation of resources, determination and implementation
of strategies and policies, direction-setting and ensuring timely
reporting and provision of information to the Board and the stake
holders of Novo Nordisk. Executive Management meets at least
once a month and often more frequently. The Board appoints
members of Executive Management and determines remuneration.
The Chairmanship reviews the performance of the executives.
The Novo Nordisk model
of corporate governance
Corporate governance
codes and practices
Novo Nordisk is in full compliance with the
Danish Corporate Governance Recommendations
and – as a foreign listed issuer – is in general
compliance with the corporate governance
standards of the stock exchanges in London
and the New York Stock Exchange, where Novo
Nordisk’s B shares and ADRs, respectively, are
listed. We expect that our B shares will be delisted
from the London Stock Exchange during 2010.
The applicable corporate governance codes for
each exchange and a detailed review of Novo
Nordisk’s compliance are available at novonordisk.
com/about_us.
The Novo Nordisk corporate governance model
sets the direction and is the framework within
which the com pany is managed (see also p 28).
38 Novo Nordisk Annual Report 2009
Governance structure
Framework
Shareholders
Assurance
External
codes and
regulations
Novo Nordisk
Way of
Management
Board of Directors
Chairmanship
Audit
Committee
R&D
facilitator
Executive Management
Organisation
Financial
audit and
non-fi nancial
assurance
Facilitation
Organisational
audit
Quality audit
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Assurance
External audit
The company’s financial reporting and the internal controls
over financial reporting processes are audited and assessed by
an external auditor elected by the annual general meeting. The
auditor acts in the interest of shareholders and the public (see
p 106). The auditor reports any significant findings regarding
accounting matters and any significant internal control deficien-
cies via the Audit Committee to the Board and in the Auditor
Long-Form report to the Board.
As part of the company’s commitment to financial, environmental
and social responsibility, Novo Nordisk voluntarily includes an
assurance report for non-financial reporting in its annual report
(see p 107). The assurance provider reviews whether the non-
financial performance information included in the annual
report is inclusive, covers aspects deemed to be material and
is responsive to company stakeholders.
Internal audit
The internal audit function provides independent and objective
assurance primarily within internal control and governance. To
ensure that the function works independently of management,
its charter, audit plan and budget are approved by the Audit
Committee.
The Audit Committee must approve the appointment, remuneration
and dismissal of the head of the internal audit function.
Internal control
Novo Nordisk’s risk management and internal controls in
relation to financial processes are designed with the purpose
of effectively controlling the risk of material misstatements.
A detailed description of the implemented internal controls
and risk management system in relation to financial reporting
processes is available at novonordisk.com/about_us/corporate_
governance/internal_control.asp.
Novo Nordisk is in compliance with US Sarbanes–Oxley Act
section 404, which requires detailed documentation of the
design and operation of financial reporting processes. Novo
Nordisk must ensure that there are no material weaknesses in the
internal controls that could lead to a material misstatement in its
financial reporting. The company’s conclusion and the auditor’s
evaluation of these processes are included in its Form 20-F filing
to the US Securities and Exchange Commission.
Executive
remuneration
Board members
The remuneration of the Board of Directors is aligned with other
major Danish companies, and payments made to members of
the Board are reported in detail on pp 78–80. The remuneration
of board members is presented for approval by the annual
general meeting. Under this separate agenda item, the actual
remuneration of the Board of Directors for the previous year
and the level for the current year are approved.
Each board member receives a fixed fee per year. Board members
receive a fixed amount (the base fee) while the chairman receives
2.5 times the base fee and the vice chairman 1.5 times. Service
on the Audit Committee entitles members to additional payments
of 0.5 times the base fee or, in the case of the committee chair,
1.25 times the base fee. Individual board members may take on
specific ad hoc tasks outside the normal assigned duties. In such
cases the Board determines a fixed fee for the work. This is the
case for the R&D facilitator. Expenses, such as travel and accom-
modation in relation to board meetings as well as relevant
training, are reimbursed. It was decided at the 2009 Annual
General Meeting that all board members residing outside
Denmark are to be paid a fixed travel allowance per meeting
attended in Denmark. No travel allowance is paid to board
members when attending board meetings outside Denmark.
Board members are not offered stock options, warrants or other
incentive schemes.
Executives
Executive remuneration is proposed by the Chairmanship and
requires the approval of the entire Board. Detailed reporting of
2009 executive pay appears on pp 76–80. Levels are evaluated
annually against a Danish benchmark of large companies with
international activities. This information is supplemented by
information on remuneration levels for similar positions in the
international pharmaceutical industry. Executive remuneration
packages consist of a fixed base salary, a short-term cash bonus,
a long-term share-based incentive, pensions and other benefits.
For executives being expatriated at the request of the company,
the remuneration package is based on current Danish remune-
ration levels, including pension entitlements, while a specific
expatriation package is added for the period of expatriation.
The short-term cash incentive bonus may yield a maximum
annual payout equal to four months’ fixed base salary plus
pension contribution. The long-term incentive programme may
result in a maximum allocation per year equal to eight months’
fixed base salary plus pension contribution.
Fixed base salary
The fixed base salary for each executive is between 40% and 60%
of the total value of the remuneration package.
Short-term incentive programme
The short-term incentive programme consists of a cash bonus
linked to the achievement of predefined functional and individual
business targets for each executive. The targets for the chief
executive officer are set by the chairman of the Board, while
targets for executive vice presidents are set by the chief executive
officer.
The chairman of the Board evaluates the degree of target
achievement for each executive and presents this, along with
proposed cash bonus payments, for approval by the Board.
Long-term incentive programme
In January each year the Board decides whether to establish
a long-term incentive programme for the calendar year. The
programme is based on a calculation of shareholder value
creation compared with budgeted performance. Aligned with
Novo Nordisk’s long-term financial targets, the calculation of
shareholder value creation is based on reported operating profit
after tax reduced by a weighted average cost of capital-based
return requirement on average invested capital. A proportion of
the calculated shareholder value creation is allocated to a joint
pool for the participants, which includes Executive Management
and other members of the Senior Management Board.
Novo Nordisk Annual Report 2009 39
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For executives the joint pool operates with a yearly maximum
allocation per participant equal to eight months’ fixed base salary
plus pension contribution. The joint pool may, subject to the
Board’s assessment, be reduced in the event of lower-than-planned
performance in significant research and development projects or
key sustainability projects. Targets for non-financial performance
may include achievement of certain milestones by set dates.
Once the joint pool has been approved by the Board, the total cash
amount is converted into Novo Nordisk B shares at market price.
The market price is calculated as the average trading price for Novo
Nordisk B shares on NASDAQ OMX Copenhagen in the open
trading window following the release of financial results for the
year prior to the bonus year. The shares in the joint pool are
allocated to the participants on a pro rata basis: the chief executive
officer has three units, executive vice presidents have two units
each and other members of the Senior Management Board have
one unit each. Joint pool shares for a given year are locked up
for three years before they are transferred to participants. If a
participant resigns during the lock-up period, his or her shares will
remain in the joint pool to the benefit of the other participants.
In the lock-up period, the Board may remove shares from the
joint pool in the event of lower-than-planned value creation in
subsequent years if, for example, the economic profit falls below
a predefined threshold compared with the budget for a particular
year. In the lock-up period the value of the joint pool will change
depending on the development in the share price, aligning the
interests of participants with those of shareholders.
Pension
The pension contribution for executives is between 25% and 30%
of the fixed base salary including bonus.
Other benefits
Executives receive non-monetary benefits, such as a company car
and phone. Such other benefits are approved by the Board by
delegation of powers to the Chairmanship. The Chairmanship
informs the Board of the process and outcome. In addition, the
executives may participate in programmes that are offered to all
Novo Nordisk employees. Expenses incurred by the executives in
connection with business travel, conferences, education, etc, are
reimbursed.
Severance
In addition to their notice period, executives are entitled, in the
event of termination, whether by Novo Nordisk or by the individual
due to a merger, acquisition or takeover of Novo Nordisk, to a
severance payment of up to 36 months’ fixed base salary plus
pension contribution. This amounts to between 14.3 million and
24.4 million Danish kroner per executive. The severance payment is
three months’ fixed base salary plus pension contribution per year
of employment as an executive, but in no event less than 12 or
more than 36 months’ fixed base salary plus pension contribution.
The Remuneration Policy for Novo Nordisk board members and
Executive Management is available at novonordisk.com/about_us/
corporate_governance/remuneration.asp. Application of the
Remuneration Policy in 2009 is described in notes 29 and 30
on pp 76–80. Remuneration for board members and Executive
Management will be in accordance with this policy for 2010.
This is also expected to be the case for 2011.
Global remuneration strategy
We aspire to be an employer of choice. The company’s remune-
ration strategy aims to attract, retain and motivate employees
40 Novo Nordisk Annual Report 2009
around the world. Compensation is designed to be competitive
and to align interests with those of shareholders.
On a global basis, compensation packages are guided by five
broad principles:
• A total rewards approach
In addition to base pay, incentives and benefits, non-financial
remuneration such as continuing education, career progression
and working environment are important elements of the ‘total
rewards’ package.
• Market linked
Salaries, incentives and benefits are positioned and main-
tained at the level required to be competitive in local
markets, generally between the local market median and
upper quartile. Novo Nordisk also provides adequate life
insurance, healthcare and pension provisions irrespective
of local competitive practice.
• Performance linked
There is a transparent, direct link between employee performance
and remuneration. Variable pay is used to reward performance,
with base pay increases reflecting market conditions.
• Transparency
Clear communication of remuneration programmes is a priority,
and all costs associated with compensation practices are known
and publicly disclosed.
• Flexibility
Subject to corporate governance or legal requirements,
flexibility is encouraged. Flexible solutions must be cost
neutral to Novo Nordisk, and adequate levels of insurance
must be maintained.
Risk management
Executive Management, reporting to the Board of Directors,
is responsible for maintaining and monitoring a systematic,
integrated process to continually assess the risks of a wide range
of issues. The Risk Management Board, representing senior
managers from all parts of the value chain and chaired by the
chief financial officer, sets the strategic direction for the risk
management process and challenges the overall risk and control
profile for Novo Nordisk.
Risk management is also embedded in our governance system
as a part of the policy framework of the Novo Nordisk Way of
Management. Our policy for risk management is that risks are
managed to enable the continued growth of our business and
to protect our people, assets and reputation. This means we will:
• utilise an effective and integrated risk management process
while maintaining business flexibility
• identify and assess material risk to enable continued growth
of our business
• monitor, manage and mitigate risks.
Risk management process
Each quarter, all major business areas in the company are required
to report to the Risk Office their most significant risks,
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considering both financial and non-financial risks, along with
plans or processes to manage these risks. The risk identification
process is both top down and bottom up, with risks escalated
from all parts of the organisation. The Risk Office, acting as the
secretariat for the Risk Management Board, challenges business
areas about reported risks and encourages exploration of
longer-term concerns. Reported risks are then consolidated
into a ranking and assessment of the company’s key risks. This
information is presented to the Risk Management Board and
from here to Executive Management and the Board of Directors.
Our policy for risk
management is that risks
are managed to enable the
continued growth of our
business and to protect our
people, assets and reputation.
All assessments of risk take into account the likelihood of an
event and its potential impact on the business. Impacts are
quantified and assessed in terms of potential financial loss and
reputational damage. Risks are assessed both as gross risk and
net risk. The assessment of gross risk assumes that no mitigating
actions have been implemented, whereas net risk assessment
takes into account mitigating actions and their anticipated
effect. Enterprise risk management increases our ability to assess
and understand risks separately and in relation to each other
from a global perspective but with local control.
The risks that we deem of greatest importance to our business
are categorised and described below. They are not, however,
ranked. Many of these issues are also discussed elsewhere in
the report.
Market risks
Price pressures
Novo Nordisk focuses on developing differentiated products that
offer improved treatment options for patients and economic
benefits to healthcare systems. As healthcare costs have risen,
outstripping the pace of economic growth, there is increasing
economic, political and regulatory pressure to contain pharma-
ceutical prices. In the US, healthcare reform legislation under
consideration at the beginning of 2010 targets drug prices,
constituting a key risk for Novo Nordisk in the short term. We
believe expanded access to healthcare will ultimately result in
more people receiving treatment for chronic diseases such as
diabetes. Documenting treatment benefits is critical to ensuring
that innovation is properly valued. Novo Nordisk is increasing the
number of clinical and health-economic studies to substantiate
the benefits of its products to patients and society, particularly
for improved diabetes treatment.
Biosimilar competition
The market for therapeutic proteins is becoming more attractive
to biosimilar producers as more lenient regulatory rules in Europe
have made it easier for producers to introduce biosimilar products
when patent protection for branded products expires. More
lenient rules have also been proposed in the US. The introduction
of lower-priced, biosimilar products could potentially result in a
significant reduction in net sales. Traditional, earlier generations
of insulin products have been off patent for years so this is a
risk with which Novo Nordisk is familiar and has considerable
experience addressing. Biosimilar products have been present
on the European market for several years but have had only a
marginal impact. In countries such as India and China, where the
company has long had biosimilar competition, Novo Nordisk has
maintained an insulin volume market share of approximately
60%.
R&D risks
Bringing new products to market
Continued growth in our business, particularly as patents
expire, depends on the company’s ability to develop and offer
better treatments or breakthrough products to patients. While
we commit substantial effort and resources to research and
development activities, certain challenges could delay the
introduction of new products. These include an increasingly
difficult regulatory environment, recruitment of patients
for large-scale clinical trials and issues related to production
processes.
Regulatory approval
Before a new treatment can be launched, it must receive regulatory
approval based on its safety and efficacy. The approval process for
new products is generally lengthy and can be subject to delays.
Failure to obtain, or delays in obtaining, regulatory clearance to
market products could adversely affect the results of operations.
Even after a product is approved, it may be subject to regulatory
action based on newly discovered findings about safety or efficacy.
One example of such a potential risk could be the issue raised in
Diabetologia, the journal of the European Association for the Study
of Diabetes, concerning the potential carcinogenicity of certain
insulin analogues2. Regulatory action may adversely affect product
marketing, require changes to product labelling or even lead to
withdrawal of regulatory approval.
Production and quality risks
Supply disruptions
Failure or breakdown in any of the company’s vital production
facilities could adversely affect the results of operations, as well
as possibly causing employee injuries or infrastructure damage.
Fire-prevention design, alarms and fire instructions, annual
inspections, back-up facilities and safety inventories are aimed
at mitigating this risk. To spread this risk geographically and
optimise costs and supply logistics, we are expanding production
capacity beyond the company’s European base to the US, Brazil
and China. As our sourcing becomes more global, our supply
chain expands, which increases risks involved in supply chain
management.
Risk of product recalls
Product safety is directly linked to patient well-being, so safety
and product quality are paramount concerns from both financial
and reputational perspectives. While the gross risk is very high,
with product safety having the potential to adversely affect
operations, we believe that our vigorous efforts to manage and
mitigate this risk effectively reduce the company’s net risk profile.
We have a corporate quality system in place, with quality audits,
quality improvement plans and systematic management reviews.
Novo Nordisk Annual Report 2009 41
or reputational risk. Our reputation as a trusted healthcare
partner is integral to effectively maintain and grow our business.
At the same time, the regulatory context for marketing activity is
constantly changing. A business ethics policy and global business
ethics procedures, paired with close monitoring of performance
and enhanced reporting requirements, all aim to mitigate these
risks. The policy supplements long-standing local ethics and
compliance policies. Significant resources are also dedicated to
training marketing and sales people around the world.
Legal risks
Intellectual property
Patent rights are a very important tool for promoting innovation,
leading to new and better products and processes, and stimu-
lating long-term economic growth and job creation. We will
enforce our patent rights towards infringing parties if deemed
advisable by Executive Management after having carefully
analysed the commercial and legal aspects of such enforcement.
Novo Nordisk patent rights will be defended against legal chal-
lenges with respect to validity and enforceability if deemed
advisable after a similar analysis.
Legal issues related to intellectual property are included on
pp 84–85.
Other legal risks
Legal issues related to product liability claims and business
practices are included in the overview of current legal cases
on pp 84–85.
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People-related risks
Attracting and retaining talented people
Our ability to develop innovative products and ensure growth and
high performance depends on our ability to attract and develop
talented people. The global financial crisis has had significant
impact on the labour market, which has been expressed in terms
of more applicants to vacant positions across functional areas and
geographies, as well as increased retention of employees. In most
markets the turnover rates are lower than the local market bench-
mark. We make substantial investments in training, and this makes
our people attractive to other companies, particularly those
seeking to build a strong platform within the diabetes segment.
Appropriately managing remuneration, non-financial benefits
and recognition are critical success factors in conjunction with
offering our people the best development opportunities working
for a good cause. This is critical to the company’s long-term success
and is prioritised accordingly.
Financial risks
Exchange rates
As a global business, fluctuations in currency exchange rates
impact the reported performance. Novo Nordisk’s reporting
currency and the functional currency of corporate operations is
the Danish krone, which is closely linked to the euro in a narrow
range of ±2.25%. However, the company has substantial
exposure to other currencies, including the US dollar, Japanese
yen, Chinese yuan and British pound. For information on how
the company manages these risks, see note 28 in the financial
statements on p 75.
Ethical risks
Marketing practices
In a competitive environment with increasing public scrutiny and
regulation, marketing practices can be the source of legal action
Managing risks
throughout our business
External stakeholders
Board of Directors
Executive Management
Risk Management Board
The entire range of
risks is consolidated
and challenged every
quarter. Key risks are
identifi ed throughout
the global organisation
while control is
maintained locally.
t
c
a
p
m
I
Critical
Major
Moderate
Minor
Unlikely
Possible
Likely
Likelihood
Very likely
• Gross assessment
• Net assessment after mitigation
42 Novo Nordisk Annual Report 2009
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Board of Directors
Sten Scheibye, picture 1
From 1995 to 2008, Mr Scheibye was president and CEO of Coloplast
A/S, Denmark. Before joining Coloplast in 1993, Mr Scheibye served
as senior vice president, sales and marketing in Leo Pharma A/S,
Denmark. He joined Leo Pharma in 1981. Mr Scheibye is chairman
of the Board of Directors of the Trade Council of Denmark and the
Board of Governors of DTU (the Technical University of Denmark) and
a member of the boards of Danske Bank A/S, Rambøll Gruppen A/S,
DADES A/S, the Danish Industry Foundation and the Aase and Ejnar
Danielsen Foundation, all in Denmark. Furthermore, he is chairman
of the Denmark–America Foundation and vice chairman of the
Danish Fulbright Commission.
Mr Scheibye has an MSc in Chemistry and Physics from 1978 and
a PhD in Organic Chemistry from 1981, both from the University of
Aarhus, Denmark, and a BComm from the Copenhagen Business
School, Denmark, from 1983.
The special competences possessed by Mr Scheibye that are
important for the performance of his duties are his knowledge
of the healthcare industry, particularly in relation to patients
requiring chronic care, and managerial skills relating to inter-
national organisations.
Dr Ando qualified as a medical doctor at Linköping Medical University,
Sweden, in 1973, and as a specialist in general medicine at the same
institution in 1978.
The special competences possessed by Dr Ando that are important
for the performance of his duties are his medical qualifications and
his extensive executive background within the international
pharmaceutical industry.
Dr Ando became vice chairman of the Novo Nordisk A/S Board in
2006. Dr Ando has also been designated research and development
facilitator by the Board of Novo Nordisk A/S.
Henrik Gürtler, picture 3
Henrik Gürtler has been president and CEO of Novo A/S, Denmark,
since 2000. He was employed by Novo Industri A/S, Denmark, as
an R&D chemist in the Enzymes Division in 1977. After a number of
years in various specialist and managerial positions within this area,
Mr Gürtler was appointed corporate vice president of Human
Resource Development in Novo Nordisk A/S in 1991, and in 1993 he
was appointed corporate vice president of Health Care Production.
From 1996 to 2000, he was a member of Corporate Management
of Novo Nordisk A/S with special responsibility for Corporate Staffs.
Mr Gürtler is chairman of the boards of Novozymes A/S,
Copenhagen Airports A/S and COWI A/S, all in Denmark.
Mr Scheibye became vice chairman of the Novo Nordisk A/S Board
in 2004 and chairman in 2006.
Mr Gürtler has an MSc in Chemical Engineering from DTU (the
Technical University of Denmark) (1976).
Göran A Ando, picture 2
Dr Ando was CEO of Celltech Group plc, UK, until 2004. He joined
Celltech from Pharmacia, now Pfizer, US, where he was executive
vice president and president of R&D with additional responsibilities
for manufacturing, IT, business development and M&A from 1995
to 2003. From 1989 to 1995, Dr Ando was medical director, moving
to deputy R&D director and then R&D director of Glaxo Group, UK.
He was also a member of the Glaxo Group Executive Committee.
Dr Ando is a specialist in general medicine and a founding fellow
of the American College of Rheumatology in the US. Dr Ando serves
as chairman of the Board of Novexel SA, France, as vice chairman
of the Board of S*Bio Pte Ltd, Singapore, and as a board member
of Novo A/S, Denmark, EDBI Pte Ltd, Singapore, NicOx SA, France,
EUSA Pharma, UK, CBio Ltd, Australia, and Albea Pharmaceuticals
AG, Switzerland. Dr Ando also serves as a senior advisor to Essex
Woodlands Health Ventures UK Ltd. and is chairman of the Scientific
Advisory Board, Southwest Michigan First, US.
The special competences possessed by Mr Gürtler that are important
for the performance of his duties are his knowledge of the Novo
Group’s business and its policies and his knowledge of the inter-
national biotech industry.
Johnny Henriksen, picture 4
Johnny Henriksen joined Novo Nordisk in January 1986 and currently
works as an environmental advisor in Product Supply.
Mr Henriksen has an MSc in Biology from the University of
Copenhagen, Denmark (1977).
Pamela J Kirby, picture 5
From 2001 to 2003, Pamela J Kirby was CEO of the contract
research organisation Quintiles Transnational Corporation, US, and
before that Dr Kirby was director of Global Strategic Marketing of
F. Hoffman-La Roche Limited, Switzerland, from 1998 to 2001.
Name (male/female)
Sten Scheibye (m)
Göran A Ando (m)
Henrik Gürtler (m)
Johnny Henriksen2 (m)
Pamela J Kirby (f)
Anne Marie Kverneland2 (f)
Kurt Anker Nielsen (m)
Søren Thuesen Pedersen2 (m)
Hannu Ryöppönen (m)
Stig Strøbæk2 (m)
Jørgen Wedel (m)
First elected
2003
2005
2005
2002
2008
2000
2000
2006
2009
1998
2000
Term
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
Nationality
Danish
Swedish
Danish
Danish
British
Danish
Danish
Danish
Finnish
Danish
Danish
Date of birth
03 Oct 1951
06 Mar 1949
11 Aug 1953
19 Apr 1950
23 Sep 1953
24 Jul 1956
08 Aug 1945
18 Dec 1964
25 Mar 1952
24 Jan 1964
10 Aug 1948
Independence3
Independent
Not independent1
Not independent1
Not independent
Independent
Not independent
Not independent1,4
Not independent
Independent4
Not independent
Independent4
1 Member of management or the Board of Novo A/S or the Novo Nordisk Foundation.
2 Elected by employees of Novo Nordisk.
3 In accordance with Section V4 of Recommendations for Corporate Governance designated by NASDAQ OMX Copenhagen.
4 Mr Nielsen, Mr Ryöppönen and Mr Wedel qualify as independent Audit Committee members as defined by the US Securities and Exchange Commission (SEC).
Novo Nordisk Annual Report 2009 43
From 1996 to 1998, Dr Kirby was commercial director at British
Biotech plc, UK, and from 1979 to 1996, Dr Kirby was employed
by Astra (now AstraZeneca) in various international positions, most
recently as regional director/vice president of Corporate Strategy,
Marketing and Business Development.
Dr Kirby is chairman of the Board of Scynexis Inc, US, and a board
member of Smith & Nephew plc, UK, and Informa plc, Switzerland.
Dr Kirby has a BSc in Pharmacology (1975) and a PhD in Clinical
Pharmacology (1978), both from the University of London, UK.
The special competences possessed by Dr Kirby that are important
for the performance of her duties are her scientific qualifications
and her extensive executive background within the international
pharmaceutical and biotech industries, particularly as relates to
marketing, strategic planning, clinical trials and life cycle manage-
ment in relation to pharmaceutical products.
Anne Marie Kverneland, picture 6
Anne Marie Kverneland joined Novo Nordisk in July 1981 as a laboratory
technician and is currently working as a full-time shop steward.
Ms Kverneland has a degree in medical laboratory technology from
the Copenhagen University Hospital, Denmark (1980).
Kurt Anker Nielsen, picture 7
Kurt Anker Nielsen was initially employed in Novo Industri A/S in 1974
as an economist. He served as CFO and deputy CEO of Novo Nordisk
A/S until 2000, and from 2000 to 2003 he was CEO of Novo A/S.
He serves as vice chairman of the Board of Novozymes A/S and as
a member of the boards of the Novo Nordisk Foundation, LifeCycle
Pharma A/S, Denmark, and ZymoGenetics, Inc, US. He is chairman
of the Board of Reliance A/S, Denmark, and a member of the board
of Vestas Wind Systems A/S, Denmark. He is also elected Audit
Committee chairman for Novozymes A/S, LifeCycle Pharma A/S,
ZymoGenetics, Inc. and Vestas Wind Systems A/S. Mr Nielsen serves as
chairman of the Board of Directors of Collstrups Mindelegat, Denmark.
Mr Nielsen has an MSc in Commerce and Business Administration
from the Copenhagen Business School, Denmark (1972).
The special competences possessed by Mr Nielsen that are important
for the performance of his duties are his in-depth knowledge of Novo
Nordisk A/S and its businesses, his working knowledge of the global
pharmaceutical industry and his experience with accounting,
financial and capital markets issues.
Mr Nielsen has been chairman of the Audit Committee at Novo
Nordisk A/S since 2004 and is also designated as financial expert
(as defined by the SEC)9.
Søren Thuesen Pedersen, picture 8
Søren Thuesen Pedersen joined Novo Nordisk in January 1994 and
is currently working as a specialist in Global Quality Development.
Mr Pedersen has been an employee-elected member of the Board of
Directors of the Novo Nordisk Foundation since 2002. Mr Pedersen
has a BSc in Chemical Engineering from the Danish Academy of
Engineers (1988).
Hannu Ryöppönen, picture 9
Hannu Ryöppönen was CFO and deputy CEO of Stora Enso Oyj,
Finland, until 2009. Before that he was CFO and an executive in Royal
Ahold, the Netherlands, from 2003 to 2005 and served on the Board
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of Directors of the ICA Group, Sweden, including the chairmanship
of the Audit Committee. From 1999 to 2003, Mr Ryöppönen was
finance director of Industri Kapital Group, UK. Mr Ryöppönen served
as CFO of the IKEA Group, Denmark, from 1985 to 1998, including
a position as deputy CEO in IKANO Asset Management from 1998 to
1999. From 1977 to 1985, Mr Ryöppönen held various management
positions at Chemical Bank in the US and the UK, as well as at Alfa
Laval in the US and Sweden.
Mr Ryöppönen is the chairman of the Board of Directors of Tiimari
Oyj, a member of the Board of Directors of Neste Oil Oyj, Amer
Sports Oyj and Rautaruukki Oyj, all in Finland. Mr Ryöppönen is
also the chairman of the Audit Committees of Amer Sports Oyj and
Rautaruukki Oyj, and a member of the Audit Committee of Neste Oil
Oyj. Finally, Mr Ryöppönen is chairman of the Board of Directors of
the Altor private equity funds, Altor 2003 GP Limited, Altor Fund II
GP Limited and Altor III GP Limited, Jersey, Channel Islands, and a
member of the Board of Directors of the private equity fund Value
Creation Investments Limited, Jersey, Channel Islands.
Mr Ryöppönen has a BA in Business Administration (1976) from
Hanken School of Economics, Helsinki, Finland.
The special competences possessed by Mr Ryöppönen that are
important for the performance of his duties are his international
executive background and thorough understanding of managing
finance operations in global organisations, in particular in relation
to accounting, financing and capital markets issues, but also his
experience within private equity and Mergers & Acquisitions (M&A).
In March 2009, the Board of Directors of Novo Nordisk A/S elected
Mr Ryöppönen as a member of the Audit Committee and designated
him financial expert under both Danish and US law9.
Stig Strøbæk, picture 10
Stig Strøbæk joined Novo Nordisk in 1992 as an electrician and is
currently working as a full-time union steward. Stig Strøbæk has
been an employee-elected member of the Board of Directors of
the Novo Nordisk Foundation since 1998.
Mr Strøbæk has a diploma in electrical engineering and a diploma
in further training for board members from the Danish Employees’
Capital Pension Fund.
Jørgen Wedel, picture 11
Jørgen Wedel was executive vice president of the Gillette Company, US,
until 2001. He was responsible for Commercial Operations, International,
and was a member of Gillette’s Corporate Management Group. From
2004 to 2008, he was a board member of ELOPAK AS, Norway.
Mr Wedel has an MSc in Commerce and Business Administration
from the Copenhagen Business School, Denmark (1972), majoring
in accounting and financing, and an MBA from the University of
Wisconsin, US (1974).
The special competences possessed by Mr Wedel that are important
for the performance of his duties are his background as a senior sales
and marketing executive in a globally consumer-oriented company
within the fast-moving consumer goods industry, as well as particular
insight into the US market. In addition, he possesses competences in
relation to auditing and accounting.
Mr Wedel has been a member of the Audit Committee at Novo
Nordisk A/S since 2005, and in March 2009 he was designated
as financial expert under both Danish and US law 9.
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Executive
Management
Lars Rebien Sørensen, picture A
Lars Rebien Sørensen joined Novo Nordisk’s Enzymes Marketing in
1982. Over the years, he has been stationed in several countries,
including the Middle East and the US. Mr Sørensen was appointed
a member of Corporate Management in May 1994 and given special
responsibility within Corporate Management for Health Care in
December 1994. He was appointed president and CEO in November
2000. Mr Sørensen is a member of the boards of ZymoGenetics, Inc,
US, DONG Energy A/S and Danmarks Nationalbank, both Denmark, as
well as a member of the Bertelsmann AG Supervisory Board, Germany.
Mr Sørensen received the French award Chevalier de l’Ordre National
de la Légion d’Honneur in 2005. Mr Sørensen has an MSc in Forestry
from the Royal Veterinary and Agricultural University (now the University
of Copenhagen), Denmark, from 1981, and a BSc in International
Economics from the Copenhagen Business School, Denmark, from
1983. Since October 2007, Mr Sørensen has been adjunct professor at
the Life Sciences Faculty of the University of Copenhagen. Mr Sørensen
is a Danish national, born on 10 October 1954.
Jesper Brandgaard, picture B
Jesper Brandgaard joined Novo Nordisk in 1999 as corporate vice
president of Corporate Finance and was appointed CFO in November
2000. He serves as chairman of the boards of SimCorp A/S, NNE
Pharmaplan A/S and NNIT A/S, all in Denmark. Mr Brandgaard has
an MSc in Economics and Auditing from 1990 as well as an MBA
from 1995, both from the Copenhagen Business School, Denmark.
Mr Brandgaard is a Danish national, born on 12 October 1963.
Lise Kingo, picture C
Lise Kingo joined Novo Nordisk in 1988 and has worked over the years
to build up the company’s Triple Bottom Line approach. Ms Kingo was
appointed senior vice president in 1999 and executive vice president,
Corporate Relations, in 2002. Ms Kingo serves as chair of the board
of the Steno Diabetes Center A/S, Denmark. She is also associate
professor at the Medical Faculty, Vrije Universiteit, Amsterdam, the
Netherlands. Ms Kingo has a BA in Religions and a BA in Ancient Greek
Art from the University of Aarhus, Denmark, from 1986, a BComm
in Marketing Economics from the Copenhagen Business School,
Denmark, from 1991, and an MSc in Responsibility and Business
Practice from the University of Bath, UK, from 2000. Ms Kingo
is a Danish national, born on 3 August 1961.
Kåre Schultz, picture D
Kåre Schultz joined Novo Nordisk in 1989 as an economist in Health
Care, Economy & Planning. In November 2000, he was appointed chief
of staffs. In March 2002, he took over the position of COO. Mr Schultz
is a member of the Board of LEGO A/S, Denmark. Mr Schultz has
an MSc in Economics from the University of Copenhagen, Denmark,
from 1987. Mr Schultz is a Danish national, born on 21 May 1961.
Mads Krogsgaard Thomsen, picture E
Mads Krogsgaard Thomsen joined Novo Nordisk in 1991. He was
appointed CSO in November 2000. He sits on the editorial boards of
international journals and is a member of the Board of Cellartis AB,
Sweden. Dr Thomsen has a DVM from the Royal Veterinary and
Agricultural University (now the University of Copenhagen), Denmark,
from 1986, where he also obtained a PhD in 1989 and a DSc in 1991,
and became adjunct professor of pharmacology in 2000. He is a former
president of the National Academy of Technical Sciences (ATV),
Denmark. Dr Thomsen is a Danish national, born on 27 December 1960.
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Other members of the Senior Management Board
Kim Bundegaard – Business Assurance
Jesper Bøving – CMC Supply
Flemming Dahl – Biopharmaceuticals
Claus Eilersen – Japan & Korea*
Peter Bonne Eriksen – Regulatory Affairs
Lars Green – Corporate Finance
Jerzy Gruhn – North America
Susanne Hundsbæk-Pedersen – Devices & Sourcing
Jesper Høiland – International Operations
Lars Fruergaard Jørgensen – IT & Corporate Development
Terje Kalland – Biopharmaceuticals Research Unit
Lars Guldbæk Karlsen – Global Quality
Jesper Kløve – Device Research & Development
Per Kogut – NNIT
Peter Kristensen – Global Development
Peter Kurtzhals – Diabetes Research Unit
Lars Christian Lassen – Corporate People & Organisation
Patrick Loustau – Global Marketing
Ole Ramsby – Legal Affairs
Jakob Riis – Liraglutide
Martin Soeters – Europe
Kim Tosti – Diabetes Finished Products
Per Valstorp – Product Supply
Hans Ole Voigt – NNE Pharmaplan
Henrik Wulff – Diabetes API
* As of 1 January 2010, Korea is included as a region with Japan. Australia and New Zealand are
included in International Operations. See p 63.
46 Novo Nordisk Annual Report 2009
Shares
and capital
structure
We aim to communicate openly with stakeholders about
the company’s financial and business development as well
as strategies and targets. Through active dialogue, we seek
to obtain fair and efficient pricing of Novo Nordisk shares.
To keep investors updated on financial and operating performance
as well as the progress of clinical programmes, Novo Nordisk hosts
conference calls with Executive Management following key events
and the release of financial results, which are also accessible by
webcast. Executive Management and Investor Relations also travel
extensively to ensure that all investors with a major holding of Novo
Nordisk shares can meet with Novo Nordisk on a regular basis and
that a high number of smaller investors or potential investors also
have access to the company. Roadshows are primarily held in major
European and North American financial centres.
A wide range of other investor activities are held during the year.
Investors and financial analysts are welcome to visit our headquar-
ters in Bagsværd, Denmark, as well as our regional headquarters.
In 2009, meetings with investor groups were held at regional
headquarters in Princeton, US, Beijing, China, and Tokyo, Japan.
Investors and analysts are also invited every year to presentations
of the most recent scientific results in connection with the two
major scientific diabetes conferences, the American Diabetes
Association and the European Association for the Study of
Diabetes. We expect to host similar investor events in 2010.
Share price performance
Novo Nordisk’s share price increased by 22.5% from its 2008
close of 271 Danish kroner to its 31 December 2009 close of 332
kroner. This was less than the 2009 performance of the NASDAQ
OMX Copenhagen 20 Index, which increased by 36% following
a significant decline in 2008, reflecting the non-cyclical nature of
the pharmaceutical industry. In 2008, Novo Nordisk’s share price
and the NASDAQ OMX Copenhagen 20 Index decreased by 19%
and 47%, respectively.
In 2009, Novo Nordisk’s share price performed better than the
MSCI Europe Health Care Index, increasing by 14% measured
in Danish kroner. Measured in US dollars, the price of the Novo
Nordisk B share increased by 24%, above the dollar gain of 18%
for the MSCI US Health Care Index.
We believe the positive development of the company’s share
price is a reflection of our relatively solid position in a growing
market with strong operating performance and ongoing progress
in research and development.
In 2009, factors believed to have impacted the share price
positively include a solid operating performance bolstered by
steady sales growth, driven by modern insulins and NovoSeven®.
Substantial productivity increases, achieved through the
production efficiency improvement programme cLEAN®, also
contributed to a solid improvement in the gross margin of around
1.8 percentage points in 2009.
In Europe, Victoza® received marketing authorisation in June
2009 and was by the end of the year launched in Germany, the
UK, Denmark, Ireland, Norway, Switzerland, the Netherlands,
Greece and Sweden. Good launch performance, with GLP-1
leadership positions in Germany and Denmark by the end of
2009, is believed to have impacted the share price positively.
Within research and development particular focus has been on
developments related to liraglutide, the once-daily human GLP-1
analogue, primarily in the US and Europe. This has been reflected
in the share price, which was negatively impacted by the discussions
of liraglutide’s overall risk–benefit profile at the Advisory Committee
meeting organised by the Food and Drug Administration on 2 April
in connection with the regulatory approval process in the US. In
January 2010, Victoza® was approved in both the US and Japan.
Progress made with Degludec and DegludecPlus, Novo Nordisk’s
two new-generation insulin projects, which initiated phase 3 clinical
development in September 2009, is also believed to have had a
positive impact on the share price.
Capital structure
The Board of Directors believes that the current capital and share
structure of Novo Nordisk serves the interests of the shareholders
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Price development
and monthly turn-
over of Novo
Nordisk’s B shares
on NASDAQ OMX
Copenhagen 2009
Novo Nordisk’s B share
closing prices in DKK (left)
(cid:81) Turnover of B shares
in DKK billion (right)
DKK
500
400
300
200
100
0
DKK billion
15
12
9
6
3
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Index: 3 January 2005 = 100
Price development
of Novo Nordisk’s
B shares relative to
the MSCI Europe
Health Care Index
measured in DKK
(cid:3) Novo Nordisk’s B
shares (prices in DKK)
MSCI Europe Health
Care Index
500
400
300
200
100
0
2005 2006 2007 2008 2009
Index: 3 January 2005 = 100
Price development
of Novo Nordisk’s
B shares relative
to the MSCI US
Health Care Index
measured in USD
(cid:3) Novo Nordisk’s B
shares (prices in USD)
MSCI US Health
Care Index
500
400
300
200
100
0
2005 2006 2007 2008 2009
Novo Nordisk Annual Report 2009 47
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Dividend payments
and payout ratio
(cid:81) Dividend for the year (left)
Payout ratio (right)
* 2007 payout ratio adjusted for the AERx®
discontinuation cost and the divestment
of Dako’s business activities.
DKK
10
8
6
4
2
0
2005 2006 2007* 2008 2009E
%
50
45
40
35
30
Breakdown of shareholders
% of capital
(cid:81) Novo A/S, Bagsværd,
Denmark 26% (72%)*
(cid:81) Novo Nordisk A/S 5% (0%)*
(cid:81) Other 69% (28%)*
* % of votes, excl treasury shares.
Geographical distribution
of share capital
% of capital
(cid:81) Denmark 50%
(cid:81) North America 24%
(cid:81) UK 20%
(cid:81) Other 6%
and the company. “Our guiding policy is that any excess capital,
after the funding of organic growth opportunities and potential
acquisitions, is returned to investors,” says Jesper Brandgaard,
executive vice president and chief financial officer. “We apply
a pharmaceutical industry payout ratio to dividend payments
complemented by long-term share repurchase programmes.”
As decided at the Annual General Meeting 2009, a reduction of
the company’s B share capital, corresponding to approximately
2% of the total share capital, was effected in June 2009 by
cancellation of treasury shares. This enables Novo Nordisk to
continue to buy back shares without exceeding the limit for a
total holding of treasury shares of 10% of the total share capital.
In 2009, we repurchased shares worth 6.5 billion Danish kroner,
compared to 4.7 billion kroner in 2008. This completed the
19 billion kroner share repurchase programme for the period
2006–2009. For 2010, Novo Nordisk has initiated a new share
repurchase programme with an expected total repurchase value
of B shares amounting to a cash value of 7.5 billion kroner. Since
2008, the share repurchase programme has primarily been
conducted in accordance with the provisions of the European
Commission’s Regulation no 2273/2003 of 22 December 2003,
also known as the ‘Safe Harbour Regulation’. This programme
48 Novo Nordisk Annual Report 2009
gives the selected financial institutions the mandate to purchase
shares independently of Novo Nordisk A/S.
As part of the agenda for the Annual General Meeting 2010,
the Board of Directors will propose a reduction of the company’s
B share capital, corresponding to approximately 3% of the total
share capital, by cancellation of treasury shares.
Share capital and ownership
Our total share capital of 620,000,000 Danish kroner is divided
into A share capital of nominally 107,487,200 kroner, and B share
capital of nominally 512,512,800 kroner, of which 32,137,945
kroner is held as treasury shares (figures as of 31 December
2009). The company’s A shares (each 1 krone) are not listed and
are held by Novo A/S, a Danish public limited liability company
which is 100% owned by the Novo Nordisk Foundation.
According to the Articles of Association of the Foundation, the
A shares cannot be divested by Novo A/S or the Foundation. As
of 31 December 2009, Novo A/S also held 50,612,800 kroner of B
share capital. Each holding of 1 krone of the A share capital carries
1,000 votes. Each holding of 1 krone of the B share capital carries
100 votes. With 25.5% of the total share capital, Novo A/S controls
72.4% of the total number of votes, excluding treasury shares. The
total market value of Novo Nordisk’s B shares excluding treasury
shares was 159 billion kroner at the end of 2009.
Novo Nordisk’s B shares are quoted on the NASDAQ OMX
Copenhagen and the London Stock Exchange, and on the New
York Stock Exchange in the form of ADRs. The B shares are traded
in units of 1 krone and the ratio of Novo Nordisk’s B shares to
ADRs is 1:1. The B shares are issued to the bearer but may, on
request, be registered in the holder’s name in Novo Nordisk’s
register of shareholders. As Novo Nordisk B shares are in bearer
form, no official record of all shareholders exists. Based on
available sources of information on the company’s shareholders
as of 31 December 2009, it is estimated that shares were distributed
as shown in the charts on this page. At the end of 2009, the free
float was 69%.
Novo Nordisk has decided to terminate its listing on the London
Stock Exchange as the required international exposure is obtained
through the listings on NASDAQ OMX Copenhagen and the New
York Stock Exchange. The low volume of trade in the company’s
shares on the London Stock Exchange is not believed to justify the
listing. The delisting is expected to be effective upon approval by
the regulatory body and the exchange, which is expected to take
place in the first quarter of 2010.
Form 20-F
The Form 20-F Report for 2009 is expected to be filed with the
United States Securities and Exchange Commission in February
2010. The report can be downloaded from novonordisk.com/
investors.
Payment of dividends
Shareholders’ enquiries concerning dividend payments, transfer
of share certificates, consolidation of shareholder accounts and
tracking of lost shares should be addressed to Novo Nordisk’s
transfer agents (see back cover). Novo Nordisk does not pay a
dividend on its holding of treasury shares. As illustrated in the
figure above Novo Nordisk has consistently increased both the
payout rate and the paid dividend over the last five years. The
dividend for 2008 paid in March 2009 was 6.00 Danish kroner
per share of 1 krone.
The proposed dividend payments for Novo Nordisk shares are
noted in the table below:
Proposed dividend payment for 2009
A shares of DKK 1
B shares of DKK 1
ADRs
DKK 7.50
DKK 7.50
DKK 7.50
Analyst coverage
Our company is currently covered by about 30 analysts, including
the major global investment banks that regularly produce research
reports about Novo Nordisk. A list of analysts covering Novo Nordisk
can be found at novonordisk.com/investors.
Internet
Our homepage for investors is novonordisk.com/investors.
It includes historical and updated information about Novo
Nordisk’s activities: press releases from 1995 onwards, financial
and non-financial results, a calendar of investor-relevant events,
investor presentations, background information and recent
annual reports.
Financial calendar 2010
Annual General Meeting 24 March 2010
Dividend
Ex-dividend
Record date
Payment
B shares
25 March 2010
29 March 2010
30 March 2010
ADRs
25 March 2010
29 March 2010
5 April 2010
Announcement of financial results
First three months
Half year
First nine months
Full year
27 April 2010
5 August 2010
27 October 2010
2 February 2011
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Novo Nordisk Annual Report 2009 49
Novo Nordisk
at a glance
Novo Nordisk is a focused healthcare company and a world leader
in diabetes care. Key market figures for the diabetes care business
are on p 19.
In its other business segment, biopharmaceuticals, Novo Nordisk
has a leading position within the therapeutic areas of haemostasis
management, growth hormone therapy and hormone replacement
therapy. See p 27 for key market figures.
Europe
Sales:
34% of total sales
Insulin volume share:
54% of the total market
Modern insulin volume share:
51% of the segment
n
o
i
t
a
m
r
o
f
n
i
r
o
t
s
e
v
n
I
Japan & Oceania*
Sales:
11% of total sales
Insulin volume share:
67% of the total market
Modern insulin volume share:
59% of the segment
North America
Sales:
36% of total sales
Insulin volume share:
42% of the total market
Modern insulin volume share:
34% of the segment
• Production sites
Ain-Allah, Dely Brahim, Algeria
Bagsværd, Denmark
Chartres, France
Clayton, North Carolina, US
Gentofte, Denmark
Hillerød, Denmark
Hjørring, Denmark
Kalundborg, Denmark
Koriyama, Japan
Køge, Denmark
Mexico City, Mexico
Montes Claros, Brazil
Måløv, Denmark
Tianjin, China
Værløse, Denmark
• R&D facilities
Bagsværd, Denmark
Beijing, China
Gentofte, Denmark
Hillerød, Denmark
Måløv, Denmark
Seattle, Washington, US
• Clinical development centres
Beijing, China
Princeton, New Jersey, US
Tokyo, Japan
Zürich, Switzerland
• Regional and business
area offices
• Representative offices
• Affiliates
International Operations
Sales:
19% of total sales
Insulin volume share:
56% of the total market
Modern insulin volume share:
56% of the segment
* As of 1 January 2010, Korea is included as a region with Japan. Australia and New Zealand are included in International Operations. See p 63.
50 Novo Nordisk Annual Report 2009
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Consolidated
financial and
non-financial
statements
2009
52 Statement of comprehensive income
53 Balance sheet
54 Statement of cash flow
55 Statement of changes in equity
56 Notes to the Consolidated financial statements
88 Financial definitions
89 Statement of non-financial reporting
90 Notes to the Consolidated non-financial statement
96 Summary of financial data 2005 –2009 in EUR (unaudited)
97 Quarterly financial figures 2008 and 2009 (unaudited)
98 Financial statements of the Parent company
105 Management’s statement
106 Independent auditor’s reports
Novo Nordisk Annual Report 2009 51
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c
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a
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y
e
h
t
r
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f
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m
o
c
n
i
e
v
i
s
n
e
h
e
r
p
m
o
c
f
o
t
n
e
m
e
t
a
t
S
Statement of comprehensive income for the year ended 31 December
DKK million
Income statement
Sales
Cost of goods sold
Gross profit
Sales and distribution costs
Research and development costs
– hereof costs related to discontinuation of all pulmonary diabetes projects
Administrative expenses
Licence fees and other operating income, net
Operating profit
Share of profit or loss of associated companies, net of tax
Financial income
Financial expenses
Profit before income taxes
Income taxes
Net profit for the year
Earnings per share:
Basic earnings per share (DKK)
Diluted earnings per share (DKK)
Statement of comprehensive income
Net profit for the year
Other comprehensive income
Gains and losses arising from translating the financial statements of
foreign operations and re-measuring available-for-sale financial assets
Adjustment of cash flow hedges for the year
Share of other comprehensive income of associated companies
Other
Income taxes relating to Other comprehensive income
Other comprehensive income for the year, net of tax
Note
2009
2008
2007
3, 4
5, 7
5, 7
5, 7
1
5, 6, 7
8
16
9
10
11
13
13
12
11
51,078
10,438
40,640
15,420
7,864
–
2,764
341
14,933
(55)
375
1,265
13,988
3,220
10,768
45,553
10,109
35,444
12,866
7,856
(325)
2,635
286
12,373
(124)
1,127
681
41,831
9,793
32,038
12,371
8,538
(1,325)
2,508
321
8,942
1,233
1,303
507
12,695
10,971
3,050
9,645
2,449
8,522
17.97
17.82
15.66
15.54
13.49
13.39
10,768
9,645
8,522
527
1,252
9
10
(25)
1,773
(482)
(1,555)
39
(45)
81
(1,962)
65
271
(41)
21
(93)
223
Total comprehensive income for the year
12,541
7,683
8,745
52 Novo Nordisk Annual Report 2009
Balance sheet at 31 December
DKK million
Assets
Intangible assets
Property, plant and equipment
Investments in associated companies
Deferred income tax assets
Other non-current financial assets
Total non-current assets
Inventories
Trade receivables
Tax receivables
Other current assets
Marketable securities and financial instruments
Cash at bank and in hand
Total current assets
Total assets
Equity and liabilities
Share capital
Treasury shares
Retained earnings
Other reserves
Total equity
Non-current debt
Deferred income tax liabilities
Retirement benefit obligations
Provisions for other liabilities
Total non-current liabilities
Current debt and financial instruments
Trade payables
Tax payables
Other current liabilities
Provisions for other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Note
2009
2008
14
15
16
23
17
18
17, 19
17, 20
17
17
21
21
17, 22
23
24
25
17
17
17, 26
25
s
t
n
e
m
e
t
a
t
s
l
a
i
c
n
a
n
i
f
d
e
t
a
d
i
l
o
s
n
o
C
r
e
b
m
e
c
e
D
1
3
t
a
t
e
e
h
s
e
c
n
a
a
B
l
1,037
19,226
176
1,455
182
22,076
10,016
7,063
799
1,962
1,530
11,296
32,666
54,742
620
(32)
34,435
711
35,734
970
3,010
456
1,157
5,593
418
2,242
701
6,813
3,241
13,415
19,008
54,742
788
18,639
222
1,696
194
21,539
9,611
6,581
1,010
1,704
1,377
8,781
29,064
50,603
634
(26)
33,433
(1,062)
32,979
980
2,404
419
863
4,666
1,334
2,281
567
5,853
2,923
12,958
17,624
50,603
Novo Nordisk Annual Report 2009 53
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a
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a
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y
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h
t
r
o
f
w
o
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f
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a
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f
o
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a
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S
Statement of cash flow for the year ended 31 December
DKK million
Net profit for the year
Adjustments for non-cash items:
Income taxes
Depreciation, amortisation and impairment losses
Interest income and interest expenses
Other adjustments
Income taxes paid
Interest received
Interest paid
Cash flow before change in working capital
(Increase)/decrease in trade receivables and other current assets
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and other current liabilities
Exchange rate adjustment
Note
2009
2008
2007
10,768
9,645
8,522
11
7
9, 10
27
3,220
2,551
71
859
(1,998)
284
(98)
15,657
(740)
(405)
921
(55)
3,050
2,442
(385)
614
(3,172)
656
(247)
2,449
3,007
(16)
(37)
(2,607)
295
(324)
12,603
11,289
(700)
(591)
1,228
323
(638)
(620)
331
(375)
Cash flow from operating activities
15,378
12,863
9,987
Purchase of intangible assets and non-current financial assets
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net change in marketable securities (maturity exceeding three months)
Dividend received
Cash flow from investing activities
Repayment of non-current debt
Purchase of treasury shares
Proceeds from sale of treasury shares
Dividends paid to the Parent company’s owners
Cash flow from financing activities
Net cash flow
Unrealised gain/(loss) on exchange rates and marketable securities
included in cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Additional information:
Cash and cash equivalents at the end of the year
Bonds with original term to maturity exceeding three months
Undrawn committed credit facilities *)
Financial resources at the end of the year
Cash flow from operating activities
+ Cash flow from investing activities
– Net change in marketable securities (maturity exceeding three months)
Free cash flow
15
16
21
21
13
17
(433)
1
(2,632)
–
18
(3,046)
–
(6,512)
117
(3,650)
(10,045)
(264)
18
(1,772)
466
170
(1,382)
(153)
(4,717)
295
(2,795)
(7,370)
(118)
40
(2,367)
(541)
1,470
(1,516)
(18)
(4,835)
241
(2,221)
(6,833)
2,287
4,111
1,638
21
2,308
8,726
11,034
11,034
1,013
4,465
16,512
15,378
(3,046)
–
12,332
(2)
(6)
4,109
4,617
8,726
8,726
997
7,451
1,632
2,985
4,617
4,617
1,486
7,457
17,174
13,560
12,863
(1,382)
466
11,015
9,987
(1,516)
(541)
9,012
*) At year-end, the Group had an undrawn committed credit facility amounting to DKK 4,465 million (DKK 7,451 million in 2008). The undrawn committed credit facility is a
EUR 600 million facility committed by a number of Danish and international banks. The facility matures in 2012.
54 Novo Nordisk Annual Report 2009
Statement of changes in equity at 31 December
Share
capital
Treasury
shares
Retained
earnings
Other reserves
Total
Exchange
rate
adjust-
ments
Deferred
gain/(loss)
on cash
flow hedges
Other
adjust-
ments
DKK million
2009
Balance at the beginning of the year
Total comprehensive income for the year
634
(26)
33,433
10,768
(256)
527
(859)
1,252
53
(6)
32,979
12,541
Transactions with owners, recognised
directly in equity:
Dividends (refer to note 13)
Share-based payments
Purchase of treasury shares
Sale of treasury shares
Reduction of the B share capital
Balance at the end of the year
(22)
2
14
(32)
(14)
620
(3,650)
259
(6,490)
115
(3,650)
259
(6,512)
117
–
34,435
271
393
47
35,734
Share
capital
Treasury
shares
Retained
earnings
Other reserves
Total
Exchange
rate
adjust-
ments
Deferred
gain/(loss)
on cash
flow hedges
Other
adjust-
ments
DKK million
2008
Balance at the beginning of the year
Total comprehensive income for the year
647
(26)
30,661
9,645
209
(465)
678
(1,537)
13
40
32,182
7,683
Transactions with owners, recognised
directly in equity:
Dividends (refer to note 13)
Share-based payments
Purchase of treasury shares
Sale of treasury shares
Reduction of the B share capital
Balance at the end of the year
(16)
3
13
(26)
(13)
634
(2,795)
331
(4,701)
292
(2,795)
331
(4,717)
295
–
33,433
(256)
(859)
53
32,979
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Novo Nordisk Annual Report 2009 55
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1 Critical accounting estimates and judgements
The preparation of financial statements in conformity with International
Financial Reporting Standards requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date(s) of the financial
statements and the reported amounts of revenues and expenses during the
reporting period(s).
Management bases its estimates on historical experience and various other
assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgements about the
reported carrying amounts of assets and liabilities and the reported amounts
of revenues and expenses that may not be readily apparent from other
sources. Actual results could differ from those estimates.
Management believes the following are the critical accounting estimates
and judgements used in the preparation of the consolidated financial state-
ments.
Sales rebate accruals and provisions
Sales rebate accruals and provisions are established in the same period as
the related sales. The sales rebate accruals and provisions are recorded as a
reduction in sales and are included in Other current liabilities and Provisions
for other liabilities. Sales rebates are predominately issued in region North
America.
The accruals and provisions are based upon historical rebate payments.
They are calculated on the basis of a percentage of sales for each product as
defined by the contracts with the various customer groups.
Significant sales rebates and discounts amounts are rebates from sales
covered by Medicaid and Medicare, the US public healthcare insurance
system. Provisions for Medicaid and Medicare rebates have been calculated
using a combination of historical experience, product and population
growth, price increases, the impact of contracting strategies and specific
terms in the individual agreements. For Medicaid, the calculation of rebates
involves inter pretation of relevant regulations, which are subject to chal-
lenge or change in interpretative guidance by government authorities.
Although accruals are made for Medicaid and Medicare rebates at the time
sales are recorded, the Medicare and Medicaid rebates related to the spe -
cific sale will typically be invoiced to Novo Nordisk up to six months later.
Due to the time lag, in any particular period the rebate adjustments to sales
may incorporate revisions of accruals for prior periods.
Customer rebates are offered to a number of managed healthcare plans.
These rebate programmes provide that the customer receives a rebate after
attaining certain performance parameters relating to product purchases,
formulary status and pre-established market share milestones relative to
competitors. Since they are contractually agreed upon, rebates are esti -
mated according to the specific terms in each agreement, historical experi-
ence, anticipated channel mix, product growth rates and market share
information. Novo Nordisk considers the sales performance of products
subject to managed healthcare rebates and other contract discounts and
adjusts the provision periodically to reflect actual experience.
Wholesaler charge-backs relate to contractual arrangements existing
between Novo Nordisk and indirect customers, mainly in the US, whereby
products are sold at prices lower than the list price charged to wholesalers.
A wholesaler charge-back represents the difference between the invoice
price to the wholesaler and the indirect customer’s contract price. Provisions
are calculated for estimated charge-backs using a combination of factors
such as historical experience, current wholesaler inventory levels, contract
terms and the value of claims received but not yet processed. Wholesaler
charge-backs are generally settled within one to three months of incurring
the liability.
Novo Nordisk believes that the accruals and provisions established for sales
rebates are reasonable and appropriate based on current facts and circum-
stances. However, the actual amount of rebates and discounts may differ
from the amounts estimated by management.
The following table is a reconciliation of gross sales to net sales for North
America (the US and Canada):
DKK million
Gross sales
Gross-to-net sales adjustments:
Medicaid and Medicare rebates
Managed healthcare rebates
Wholesaler charge-backs
Cash discounts
Sales returns
Other rebates and allowances
2009
2008
2007
27,890
22,639
20,109
(2,447)
(2,121)
(3,720)
(567)
(168)
(588)
(1,672)
(1,543)
(2,949)
(433)
(512)
(376)
(1,279)
(1,333)
(2,594)
(381)
(432)
(344)
Total gross-to-net sales adjustments
(rebates)
(9,611)
(7,485)
(6,363)
Net sales
18,279
15,154
13,746
The carrying amount of sales rebate accruals and provisions is DKK 2,886
million as at 31 December 2009. Please refer to note 3 for disclosure of
sales from business and geographic segments and note 4 and 25 for further
information on sales provisions.
Provisions and contingencies
Pending litigations
Management of the Group makes judgements about provisions and
con tingencies, including the probability of pending and potential future
litigation outcomes that in nature are dependent on future events that are
inherently uncertain. In making its determinations of likely outcomes of
litigations etc, management considers the evaluation of external counsel
knowledgeable about each matter, as well as known outcomes in case law.
Provisions for pending litigations are recognised under Provisions for other
liabilities. Please refer to notes 25 and 32 for a description of significant
litigations pending.
Deferred income tax assets and liabilities
Novo Nordisk recognises deferred income tax assets if it is probable that
sufficient taxable income will be available in the future against which the
temporary differences and unused tax losses can be utilised. Management
has considered future taxable income in assessing whether deferred income
tax assets should be recognised.
The carrying amount of deferred income tax assets and deferred income
tax liabilities is DKK 1,455 million and DKK 3,010 million, respectively, as at
31 December 2009. Please refer to note 23 for further information.
Returned products
As part of normal business, Novo Nordisk issues credit notes for expired
goods. Consequently, a provision for future returns is made, based on
historical statistical product returns.
Revenue recognition for new product launches is based on specific facts
and circumstances for the specific products, including estimated demand
and acceptance rates from well-established products with similar market
characteristics. In recent years, the products launched by Novo Nordisk have
been comparable with either other products already on the market or
products in therapy areas well known to Novo Nordisk, and therefore un -
certainties surrounding product returns on new products launched have
been limited.
The carrying amount of provision for returned products is DKK 588 million
as at 31 December 2009. Please refer to note 25 for further information.
Indirect production costs (IPCs)
Production costs for work in progress and finished goods include IPCs such
as employee costs, depreciation, maintenance etc.
IPCs are measured based on a standard cost method which is reviewed
regularly in order to ensure relevant measures of utilisation, production lead
time and other relevant factors. Changes in the parameters for calculation
of IPCs, including utilisation levels, production lead time etc could have
an impact on the gross margin and the overall valuation of inventories. The
carrying amount of IPCs is DKK 5,046 million as at 31 December 2009.
Please refer to note 18 for further information.
56 Novo Nordisk Annual Report 2009
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a
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Allowances for doubtful trade receivables
Trade receivables are stated at amortised cost less allowances for potential
losses on doubtful trade receivables.
Novo Nordisk maintains allowances for doubtful trade receivables for
estimated losses resulting from the subsequent inability of customers to
make required payments. If the financial conditions of the customers were
to deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required in future periods. Management
specifically analyses trade receivables and examines historical bad debt,
customer concentrations, customer creditworthiness, current economic
trends and changes in the customer payment terms when evaluating the
adequacy of the allowance for doubtful trade receivables.
The carrying amount of allowances for doubtful trade receivables is DKK
600 million as at 31 December 2009. Please refer to note 19 for further
information.
Non-recurring costs related to discontinuation
of all pulmonary diabetes projects
Towards the end of 2007, Novo Nordisk conducted a detailed analysis of
the future prospects for inhaled insulin and a review of the medical and
commercial potential of the AERx ® iDMS inhaled insulin system (AERx ®). This
analysis resulted in a non-recurring impairment cost regarding intangible
assets and manufacturing activities related to the AERx ® system and cost of
discontinuing all clinical development in the amount of DKK 1,325 million,
which was recorded and negatively impacted operating profit in 2007.
In April 2008, Novo Nordisk also decided to discontinue the remainder of
its pulmonary activities. As a result of these decisions, an additional cost of
DKK 325 million was expensed in 2008.
In 2008 and 2007, Novo Nordisk recorded the following charges related
to the impairment of pulmonary diabetes projects. No charges have been
recorded in 2009 as all pulmonary activities have been closed down.
DKK million
2009
2008
2007
Impairment of intangible assets
Severance pay and other employee-
related costs
Impairment of tangible assets
Commitments regarding clinical trials
Lease and investment commitments
Other costs related to closure of
pulmonary diabetes projects
Total costs
–
–
–
–
–
–
–
–
155
53
–
42
75
325
117
–
753
326
129
–
1,325
These charges were included in Research and development costs. In addi-
tion, a cost of DKK 52 million, related to the AERx ® discontinuation, was
included as financial expense in 2007.
2 Accounting policies
The principal accounting policies applied to the preparation of the con -
solidated financial statements are set out below. These policies have been
applied consistently for all the years presented.
Basis of preparation
The consolidated financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the Inter -
national Accounting Standards Board (IASB) and with International Financial
Reporting Standards as endorsed by the EU.
Furthermore, the Annual Report is prepared in accordance with additional
Danish disclosure requirements for annual reports for listed companies. The
Financial statements of the Parent company, Novo Nordisk A/S, as presented
on pps 98 –104, are prepared in accordance with The Danish Financial
Statements Act.
The Consolidated financial statements are prepared in accordance with the
historical cost convention, as modified by the revaluation of available-for-
sale financial assets, and financial assets and liabilities (derivatives) at fair
value through profit or loss.
Accounting standards effective in 2009
Novo Nordisk has adopted all new or amended and revised accounting
standards and interpretations (‘IFRSs’) endorsed by the EU effective for the
accounting period beginning on 1 January 2009. Based on an analysis made
by Novo Nordisk, most of the IFRSs effective for 2009 have no material im-
pact or are not relevant to the Group. However, the following revised
standard has a material impact on the presentation and disclosure of the
consolidated financial statements:
• IAS 1 (Revised), ‘Presentation of Financial Statements’. The revised
standard prohibits the presentation of items of income and expenses (that
is ‘non-owner changes in equity’) in the statement of changes in equity,
requiring ‘non-owner changes in equity’ to be presented separately from
owner changes in equity (statement of comprehensive income).
As a result the Group presents in the consolidated Statement of changes
in equity all owner changes in equity, whereas all non-owner changes
in equity are presented in Other comprehensive income. Comparative
information has been re-presented so that it also conforms with the
revised standard. Since the change in accounting policy only impacts
presentation aspects, there is no impact on Operating profit, Equity or
earnings per share.
Amendments and interpretations to existing accounting standards
that are not yet effective and have not been early adopted
During 2009 IASB issued a number of IFRSs, amendments and interpre -
tations which have been endorsed by the EU as per 31 December 2009 and
are mandatory for the Group’s accounting periods beginning on or after
1 January 2010.
Novo Nordisk has thoroughly assessed the impact of the IFRSs, amendments
and interpretations that are not yet effective and determined that most of
them will not have a material impact on the consolidated financial state-
ments going forward. Consequently, no early adoption has been made.
However, the following revised standard can in future have a material im-
pact on the Consolidated financial statements:
• IFRS 3 (Revised), ‘Business combinations’. The revised standard continues
to apply the acquisition method to business combinations, with some
significant changes. For example, all payments to purchase a business are
to be recorded at fair value at the acquisition date, with contingent con-
siderations classified as debt subsequently measured through the Income
statement. IFRS 3(2008) is to be applied prospectively.
Principles of consolidation
The Consolidated Financial Statements include the financial statements of
Novo Nordisk A/S (the Parent company) and all the companies in which
Novo Nordisk A/S directly or indirectly owns more than 50% of the voting
rights or in some other way has a controlling influence (subsidiaries). Novo
Nordisk A/S and these companies are referred to as the Group.
Companies that are not subsidiaries, but in which the Group holds 20% to
50% of the voting rights, or in some other way has a significant influence
on the operational and financial management, are treated as associated
companies.
The Consolidated financial statements are based on the Financial state-
ments of the Parent company and of the subsidiaries applying group
accounting policies, and are prepared by combining items of a uniform
nature and eliminating inter company transactions, shareholdings, balances
and unrealised inter company profits and losses.
Acquired and divested companies are included in the consolidation during
the period of Novo Nordisk’s ownership. Comparative figures are not
adjusted for disposed or acquired companies.
Novo Nordisk Annual Report 2009 57
Forward exchange contracts and currency swaps hedging recognised as
assets or liabilities in foreign currencies are measured at fair value at the end
of the reporting period. Value adjustments are recognised in Other com -
prehensive income, along with any value adjustments of the hedged asset
or liability that is attributable to the hedged risk.
The value adjustments on forward exchange contracts and interest rate
swaps designated as hedges of forecasted transactions are recognised
directly in Other comprehensive income, given hedge effectiveness. The
cumulative value adjustment of these contracts is reclassified from Other
comprehensive income to the Income statement as a reclassification adjust-
ment under ‘Financial income’ or ‘Financial expenses’ when the hedged
transaction is recognised in the Income statement.
Currency swaps used to hedge net investments in subsidiaries are measured
at fair value based on the difference between the swap exchange rate and
the exchange rate at the end of the reporting period. The value adjustment
is recognised in Other comprehensive income.
Further to the above, the Group uses currency option hedges of forecasted
transactions. Currency options are initially recognised at cost which equals
fair value of considerations paid and subsequently re-measured at their fair
values at the end of the reporting period. While providing effective eco -
nomic hedges under the Group’s risk management policy, the current use of
currency options does not meet the detailed requirements for allowing
hedge accounting. Currency options are therefore recognised directly in the
Income statement under Financial income or Financial expenses.
The accumulated net fair value of derivatives is presented as Marketable
securities and financial instruments, if positive, or Current debt and financial
instruments, if negative.
Determination of fair value
The fair value of financial assets and liabilities is measured on the basis of
quoted market prices of financial instruments traded in active markets.
If an active market exists, fair value is based on the most recently observed
market price at the end of the reporting period.
If a financial instrument is quoted in a market that is not active, the Group
bases its valuation on the most recent transaction price. Adjustment is made
for subsequent changes in market conditions, for instance by including
transactions in similar financial instruments that are assumed to be motiv -
ated by normal business considerations.
If an active market does not exist, the fair value of standard and simple
finan cial instruments, such as interest rate and currency swaps and unlisted
bonds, is measured according to generally accepted valuation techniques.
Market-based parameters are used to measure fair value.
Derecognition of hedging instrument
When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in the Income statement. When a fore-
cast transaction is no longer expected to occur, the cumulative gain or loss
that was reported in equity is immediately transferred to the Income state-
ment within Financial income or Financial expenses.
Provisions
Provisions, including tax and legal cases, are recognised where a legal or
constructive obligation has been incurred as a result of past events and it is
probable that it will lead to an outflow of resources that can be reliably
estimated. In this connection, Novo Nordisk makes the estimate on the basis
of an evaluation of the individual most likely outcome of the cases. In cases
where a reliable estimate cannot be made, these are disclosed as contingent
liabilities.
Provisions are measured at the present value of the expenditures expected
to be required to settle the legal or constructive obligation using a pre-tax
rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to
the passage of time is recognised as interest expense.
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Significant accounting policies
Novo Nordisk’s management considers the following to be the most signifi-
cant accounting policies for the Group.
Sales and revenue recognition
Sales comprise the fair value of the sale of goods excluding value added
tax and after deduction of provisions for returned products, rebates, trade
discounts and allowances.
Provisions and accruals for rebates to customers are provided for in the
period the related sales are recorded. Historical data are readily available
and reliable, and are used for estimating the amount of the reduction in
sales.
Sales are recognised when realised or realisable and earned. Revenues
are considered to have been earned when Novo Nordisk has substantially
accomplished what it must do to be entitled to the revenues.
Revenue from the sale of goods is recognised when all the following specific
conditions have been satisfied:
• Novo Nordisk has transferred to the buyer the significant risk and rewards
of ownership of the goods
• Novo Nordisk retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the
goods sold
• The amount of revenue can be measured reliably
• It is probable that the economic benefits associated with the transaction
will flow to Novo Nordisk
• The costs incurred or to be incurred in respect of the transaction can be
measured reliably.
These conditions are usually met by the time the products are delivered to
the customers.
Research and development
Due to the long development period and significant uncertainties relating
to the development of new products, including risks regarding clinical trials
and regulatory approval, it is concluded that the Group’s internal develop-
ment costs in general do not meet the capitalisation criteria. Consequently,
the technical feasibility criteria are not considered fulfilled before regulatory
filing. Therefore, all internal research and development costs are expensed
in the Income statement as incurred. The same principles are used for
property, plant and equipment developed as part of a research and
development project.
For acquired in-process research and development projects, the effect of
probability is reflected in the cost of the asset and the probability recognition
criteria are therefore always considered satisfied. As the cost of acquired in-
process research and development projects can often be measured reliably,
these projects fulfil the criteria for capitalisation as intangible assets upon
acquisition. However, further internal development costs subsequent to
acquisition are treated as other internal development costs.
Property, plant and equipment used for general research and development
purposes are capitalised and depreciated over their estimated useful lives.
Financial instruments
The Group uses forward exchange contracts, interest rate swaps and cur -
rency swaps to hedge forecasted transactions, assets and liabilities, and net
investments in foreign subsidiaries in foreign currencies in accordance with
the specific rules of IAS 39 ‘Financial Instruments: Recognition and
Measure ment’.
Upon initiation of the contract, the Group designates each derivative finan-
cial contract that qualifies for hedge accounting as either:
• Hedges of the fair value of a recognised asset or liability or a firm commit-
ment (fair value hedge),
• Hedges of the fair value of a forecast financial transaction (cash flow
hedge); or
• Hedges of a net investment in a foreign operation (net investment hedge).
All contracts are initially recognised at fair value and subsequently re-
measured at their fair values based on current bid prices at the end of the
reporting period.
58 Novo Nordisk Annual Report 2009
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Other accounting policies
Translation of foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities
are measured using the currency of the primary economic environment in
which the entity operates (functional currency). The Consolidated financial
statements are presented in Danish kroner (DKK), which is the functional
and presentation currency of the Parent company.
Translation of transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates ruling at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such trans -
actions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the
Income statement, except when deferred in Other comprehensive income
as qualifying cash flow hedges and qualifying net investment hedges.
Translation differences on non-monetary items, such as financial assets
classified as available for sale, are included in the fair value reserve in Other
comprehensive income.
Translation of Group companies
Financial statements of foreign subsidiaries are translated into Danish
kroner at exchange rates ruling at the end of the reporting period for assets
and liabilities and at average exchange rates for Income statement items.
All exchange rate adjustments are recognised in the Income statement with
the exception of exchange gains and losses arising from:
• The translation of foreign subsidiaries’ net assets at the beginning of the
year at the exchange rates at the end of the reporting period
• The translation of foreign subsidiaries’ income statement using average
exchange rates, whereas balance sheet items are translated using the
exchange rates ruling at the end of the reporting period
• The translation of non-current intercompany receivables that are con -
sidered to be an addition to net investments in subsidiaries
• The translation of investments in associated companies.
The above exchange gains and losses are recognised in Other compre -
hensive income.
Licence fees and other operating income
Licence fees and other operating income comprise licence fees and income
of a secondary nature in relation to the main activities of the Group. Licence
fees are recognised on an accrual basis in accordance with the terms and
substance of the relevant agreement. Licence fees and other operating
income also includes non-recurring income items in respect of sale of intel-
lectual property.
As a principal rule, sale of intellectual property rights is recorded as income
at the time of the sale. Where the Group assumes an obligation in con -
nection with a sale of intellectual property rights, the income is recognised
in accordance with the term of the obligation. On the sale of intellectual
property rights where the final sale is conditional on future events, the
amount is deferred and recorded as income at the occurrence of such future
events.
Intangible assets
Goodwill
Goodwill represents any cost in excess of identifiable net assets, measured
at fair value, in the acquired company. Goodwill recorded under Intangible
assets is related to subsidiaries.
Other intangible assets
Patents and licences that include acquired patents and licences to in-process
research and development projects are carried at historical cost less accu -
mulated amortisation and any impairment loss. Amortisation is calculated
using the straight-line method to allocate the cost of patents and licences
over their estimated useful lives. The amortisation commences in the year in
which the rights first generate sales.
Internal development of software and other development costs related to
major IT projects for internal use that are directly attributable to the design
and testing of identifiable and unique software products controlled by the
Group are recognised as intangible assets under Other intangible assets if
the recognition criteria are met. Amortisation is provided under the straight-
line method over the estimated useful life of 3–10 years.
Property, plant and equipment
Property, plant and equipment is measured at historical cost less accu -
mulated depreciation and any impairment loss. The cost of self-constructed
assets includes costs directly attributable to the construction of the assets.
Subsequent cost is included in the asset’s carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. In general, constructions of
major invest ments are self-financed and thus no material interest on loans
(borrowings) is capitalised as part of the cost.
Depreciation is provided under the straight-line method over the estimated
useful lives of the assets as follows:
• Buildings: 12– 50 years
• Plant and machinery: 5 –16 years
• Other equipment: 3 –16 years
• Land is not depreciated
The assets’ residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period. An asset’s carrying amount
is written down to its recoverable amount if the asset’s carrying amount is
higher than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are recognised in the Income statement.
Leases
Leases of assets whereby the Group assumes substantially all the risks and
rewards of ownership are capitalised as finance leases under Property, plant
and equipment and depreciated over the estimated useful lives of the
assets, according to the periods listed above. The corresponding finance
lease liabilities are included in liabilities.
Operating lease costs are charged to the Income statement on a current
basis over the period of the lease.
Investments in associated companies
Investments in associated companies are accounted for under the equity
method of accounting (ie at the respective share of the associated com -
panies’ net asset value applying Group accounting policies). Goodwill
relating to associated companies is recorded as part of the investment under
Investments in associated companies.
Impairment of assets
Assets that have an indefinite useful life, for example goodwill, are not
subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation, such as intangible assets and other non-current
assets, are reviewed for impairment whenever events or changes in circum-
stances indicate that the carrying amount may not be recoverable. Factors
considered material by the Group and that could trigger an impairment test
include the following:
• Development of a competing drug
• Changes in the legal framework covering patents, rights or licences
• Advances in medicine and/or technology that affect the medical treat-
ments
• Lower than predicted sales
• Adverse impact on reputation and/or brand names
• Change in the economic lives of similar assets
• Relationship with other intangible or tangible assets
• Changes or anticipated changes in participation rates or reimbursement
policies
If it is determined that the carrying amount of intangible assets, other non-
current assets or goodwill exceeds its recoverable amount based upon the
existence of one or more of the above indicators of impairment, any impair-
ment is measured based on discounted projected cash flows.
Intangible assets and other non-financial assets other than goodwill that
have suffered impairment are reviewed for possible reversal of the impair-
ment at each reporting date.
Novo Nordisk Annual Report 2009 59
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Financial assets
The Group classifies its investments in the following categories: Financial
assets at fair value through profit or loss (derivatives), Loans and receivables
and Available-for-sale financial assets. The classification depends on the
purpose for which the investments were acquired. Management determines
the classification of its investments on initial recognition and re-evaluates
this designation at the end of every reporting period to the extent that such
a designation is permitted and required.
If the expected sales price less completion costs and costs to execute sales
(net realisable value) is lower than the carrying amount, a write-down is
recognised for the amount by which the carrying amount exceeds its net
realisable value.
Tax
Income taxes in the Income statement include tax payable for the year with
addition of the change in deferred tax for the year.
Financial assets at fair value through profit or loss
Derivatives used for cash flow hedging purposes are classified as financial
assets at fair value through profit or loss even though derivatives used for
hedging purposes are recognised in Other comprehensive income. Assets in
this category are classified as Current assets.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or deter-
minable payments that are not quoted in an active market. If collection is
expected in one year or less (or in the normal operating cycle of the business
if longer), they are classified as Current assets. If not, they are presented as
Non-current assets.
Deferred income taxes arise from temporary differences between the
accounting and taxable values of the individual consolidated companies and
from realisable tax-loss carry-forwards, using the liability method. The tax
value of tax-loss carry-forwards is included in deferred tax assets to the
extent that the tax losses and other tax assets are expected to be utilised
in the future taxable income. The deferred income taxes are measured
according to current tax rules and at the tax rates expected to be in force on
the elimination of the temporary differences.
Unremitted earnings are retained by subsidiaries for reinvestment. No pro -
vision is made for income taxes that would be payable upon the distribution
of such earnings.
Trade receivables and Other current assets are recognised initially at fair
value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. A provision for impairment
of trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original
terms of the receivables.
Employee benefits
Wages, salaries, social security contributions, paid annual leave and sick
leave, bonuses and non-monetary benefits are accrued in the year in which
the associated services are rendered by employees of the Group. Where
the Group provides long-term employee benefits, the costs are accrued to
match the rendering of the services by the employees concerned.
The carrying amount of Trade receivables is reduced with the provision for
impairment, and the amount of the loss is recognised in the Income state -
ment within Sales and distribution costs. When a trade receivable is uncol -
lectible, it is written off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are credited
against Sales and distribution costs in the Income statement.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either
design ated in this category or not classified in any of the other categories.
They are included in Other non-current assets unless management intends
to dispose of the investment within 12 months of the end of the reporting
period. Market able securities under current assets are classified as available-
for-sale financial assets.
Recognition and measurement
Purchases and sales of investments are recognised on the settlement date.
Investments are initially recognised at fair value plus transaction costs for all
financial assets not classified as fair value through profit or loss.
Currency options, available-for-sale financial assets and financial assets at
fair value through profit or loss are subsequently carried at fair value. Loans
and receivables are carried at amortised cost using the effective interest
method.
Unrealised gains and losses arising from changes in the fair value of finan-
cial assets classified as available-for-sale are recognised in Other com -
prehensive income. When financial assets classified as available-for-sale are
sold or impaired, the accumulated fair value adjustments are included in
the Income statement.
Fair value disclosures are made separately for each class of financial instru-
ments at the end of the reporting period.
The fair values of quoted investments (incl bonds) are based on current bid
prices. Financial assets for which no active market exists are carried at cost if
no reliable valuation model can be applied (unlisted shares).
Investments are derecognised when the rights to receive cash flows from
the investments have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership.
Inventories
Inventories are stated at the lowest of cost and net realisable value. Cost is
determined using the first-in, first-out method. Cost comprises direct pro-
duction costs such as raw materials, consumables, energy and labour, and
production overheads such as employee costs, depreciation, maintenance
etc. The production overheads are measured based on a standard cost
method which is reviewed regularly in order to ensure relevant measures of
utilisation, production lead time etc.
60 Novo Nordisk Annual Report 2009
Pensions
The Group operates a number of defined contribution plans throughout
the world. In a few countries, the Group still operates defined benefit plans.
The costs for the year for defined benefit plans are determined using the
projected unit credit method. This reflects services rendered by employees
to the dates of valuation and is based on actuarial assumptions primarily
regarding discount rates used in determining the present value of benefits,
projected rates of remuneration growth and long-term expected rates of
return for plan assets. Discount rates are based on the market yields of high-
rated corporate bonds in the country concerned.
Actuarial gains and losses are recognised as income or expense when the
net cumulative unrecognised actuarial gains and losses for each individual
plan at the end of the previous reporting period exceed 10% of the higher
of the defined benefit obligation and the fair value of plan assets at that
date. These gains or losses are recognised over the expected average re-
maining working lives of the employees participating in the plans.
Past service costs are allocated over the average period until the benefits
become vested.
Pension assets are only recognised to the extent that the Group is able to
derive future economic benefits in the way of refunds from the plan or
reduc tions of future contributions.
The Group’s contributions to the defined contribution plans are charged to
the Income statement in the year to which they relate.
Share-based compensation
The Group operates equity-settled, share-based compensation plans. The
fair value of the employee services received in exchange for the grant of the
options or shares is recognised as an expense and allocated over the vesting
period.
The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options or shares granted, excluding the
impact of any non-market vesting conditions. The fair value is fixed at grant
date. Non-market vesting conditions are included in assumptions about
the number of options or shares that are expected to vest. At each reporting
period end, the Group revises its estimates of the number of options or
shares that are expected to vest. Novo Nordisk recognises the impact of the
revision of the original estimates, if any, in the Income statement and a cor-
responding adjustment to Equity (change in proceeds) over the remaining
vesting period. Adjustments relating to prior years are included in the
Income statement in the year of adjustment.
Liabilities
Generally, liabilities are stated at amortised cost unless specifically men-
tioned otherwise.
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any differ-
ence between the proceeds (net of transaction costs) and the redemption
value is recognised in the Income statement over the period of the borrow-
ings using the effective interest method. Borrowings are classified as Current
debt unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting period.
Equity
Treasury shares
Treasury shares are deducted from the share capital at their nominal value
of DKK 1 per share. Differences between this amount and the amount paid
for acquiring, or received for disposing of, treasury shares are deducted
from retained earnings.
Statement of cash flows
The statement of cash flows and financial resources is presented in accor-
dance with the indirect method commencing with net profit for the year.
The statement shows cash flows for the year, the net change in cash and
cash equivalents for the year, and cash and cash equivalents at the begin-
ning and end of the year.
Cash and cash equivalents consist of cash and marketable securities, with
original maturity of less than three months, less short-term bank loans.
Financial resources consist of cash and cash equivalents, bonds with original
term to maturity exceeding three months, and undrawn committed credit
facilities expiring after more than one year.
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Novo Nordisk Annual Report 2009 61
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3 Segment information
Operating segments are reported in a manner consistent with the internal
reporting provided to Executive Management and the Board of Directors.
Business segments
For management reporting purposes, the Group operates in two global
business segments based on different therapies:
Diabetes care
The business segment includes discovery, development, manufacturing and
marketing of products within the areas of insulin, GLP-1 and related delivery
systems as well as oral antidiabetic products (OAD).
Biopharmaceuticals
The business segment includes discovery, development, manufacturing and
marketing of products within the areas of haemophilia, growth hormone
therapy, hormone replacement therapy, inflammation therapy and other
therapy areas.
No operating segments have been aggregated to form the above reportable
operating segments.
Management monitors the operating results of its business segments
separately for the purpose of making decisions about resource allocation
and performance assessment. Segment performance is evaluated based on
operating profit consistent with the consolidated financial statements.
Group financing (including financial expenses and financial income) and
income taxes are managed on a Group basis and are not allocated to
operating segments.
Business segments
DKK million
Segment sales and results
Sales
Modern insulins (insulin analogues)
Human insulins
Protein-related sales
Oral antidiabetic products (OAD)
Diabetes care total
NovoSeven ®
Norditropin ®
Hormone replacement therapy
Other products
Biopharmaceuticals total
Sales
Change in DKK (%)
Change in local currencies (%)
Cost of goods sold
Sales and distribution costs
Research and development costs
– hereof costs related to discontinuation of all pulmonary diabetes projects
Administrative expenses
Licence fees and other operating income
Operating profit
Operating profit (excl costs related to discontinuation of all pulmonary diabetes projects)
2009
2008
2007
Diabetes care *)
21,471
11,315
2,064
2,652
37,502
17,317
11,804
1,844
2,391
14,008
12,572
1,749
2,149
33,356
30,478
37,502
12.4%
11.1%
9,001
12,877
5,257
–
2,044
187
8,510
8,510
33,356
9.4%
12.7%
8,705
10,497
4,791
(325)
1,936
142
7,569
7,894
30,478
9.4%
14.1%
8,404
9,962
6,116
(1,325)
1,916
179
4,259
5,584
Geographical information
2009
2008
2007
2009
2008
2007
DKK million
Sales
Change in DKK (%)
Change in local currencies (%)
Property, plant and equipment
Total assets
North America
Europe **)
18,279
20.6%
15.2%
905
3,232
15,154
10.2%
17.7%
973
3,532
13,746
11.9%
21.8%
998
2,873
17,540
1.9%
5.2%
15,445
42,933
17,219
5.3%
6.7%
15,624
40,849
16,350
6.9%
6.8%
16,398
38,428
*) Total assets for the Diabetes care segment amounts to DKK 29.8 billion (DKK 30.5 billion and DKK 30.3 billion in 2008 and 2007, respectively) and for the Biopharmaceuticals
segment DKK 8.1 billion (DKK 6.6 billion and DKK 6.7 billion in 2008 and 2007, respectively). The remaining part of total assets that has not been allocated to any of the two
business segments includes Cash at bank and in hand, Marketable securities and financial instruments etc and amounts to DKK 16.8 billion (DKK 13.5 billion and DKK 10.7 billion
in 2008 and 2007, respectively).
**) Novo Nordisk’s country of domicile is Denmark which is included in the Europe geographic segment.
62 Novo Nordisk Annual Report 2009
There are no sales or other transactions between the business segments.
Costs have been split between business segments based on a specific
allocation with the addition of a minor number of corporate overheads
allocated systematically to the segments. Other operating income has
been allocated to the two segments based on the same principle. Segment
assets comprise the assets that are applied directly to the activities of the
segment, including intangible assets, property, plant and equipment, non-
current financial assets, inventories, trade receivables and other receivables.
No single customer represents more than 10% of the total revenue.
Geographical information
The Group operates in four geographical regions:
• North America: The US and Canada
• Europe: the EU, EFTA, Albania, Bosnia-Herzegovina, Croatia, Macedonia,
Serbia, Montenegro and Kosovo
• Japan & Oceania: Japan, Australia and New Zealand
• International Operations: All other countries
Sales are attributed to geographical regions based on the location of the
customer. There are no sales between regions. Total assets and additions to
property, plant and equipment, and intangible assets are based on the
location of the assets.
Effective 1 January 2010, changes to the regional structure have been
made. Korea joins Japan to form Region Japan & Korea while Australia and
New Zealand become part of International Operations. The change does
not impact the segment reporting or other disclosures in the Annual Report
2009.
2009
2008
2007
2009
2008
2007
Biopharmaceuticals *)
Total
21,471
11,315
2,064
2,652
37,502
7,072
4,401
1,744
359
13,576
51,078
12.1%
10.6%
10,438
15,420
7,864
–
2,764
341
14,933
14,933
17,317
11,804
1,844
2,391
14,008
12,572
1,749
2,149
33,356
30,478
6,396
3,865
1,612
324
5,865
3,511
1,668
309
12,197
11,353
45,553
8.9%
12.2%
10,109
12,866
7,856
(325)
2,635
286
12,373
12,698
41,831
8.0%
12.9%
9,793
12,371
8,538
(1,325)
2,508
321
8,942
10,267
7,072
4,401
1,744
359
13,576
13,576
11.3%
9.3%
1,437
2,543
2,607
–
720
154
6,423
6,423
6,396
3,865
1,612
324
5,865
3,511
1,668
309
12,197
11,353
12,197
7.4%
11.1%
1,404
2,369
3,065
–
699
144
4,804
4,804
11,353
4.4%
9.9%
1,389
2,409
2,422
–
592
142
4,683
4,683
2009
2008
2007
2009
2008
2007
2009
2008
2007
International Operations
Japan & Oceania
9,826
16.6%
18.5%
2,686
7,537
8,425
15.5%
20.5%
1,827
5,267
7,295
12.3%
17.8%
2,031
5,648
5,433
14.3%
1.3%
190
1,040
4,755
7.1%
2.1%
215
955
4,440
(4.9%)
3.1%
178
782
51,078
12.1%
10.6%
19,226
54,742
Total
45,553
8.9%
12.2%
18,639
50,603
41,831
8.0%
12.9%
19,605
47,731
s
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Novo Nordisk Annual Report 2009 63
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4 Sales rebate accruals and provisions
7 Depreciation, amortisation and impairment losses
DKK million
At the beginning of the year
Adjustments to previous year’s accruals
and provisions
Additional accruals and provisions
Payments and grants of rebates
used during the year
Exchange rate adjustments
At the end of the year
Specification of sales rebate accruals
and provisions:
Other current liabilities
Provisions for other liabilities
Total sales rebate accruals and provisions
2009
2,400
(90)
6,119
(5,500)
(43)
2,886
2008
2007
DKK million
2009
2008
2007
1,833
1,847
(209)
4,157
(168)
3,176
(3,469)
88
(2,835)
(187)
2,400
1,833
Included in the Income statement:
Cost of goods sold
Sales and distribution costs
Research and development costs *)
Administrative expenses
1,851
43
528
129
1,831
38
473
100
1,652
31
1,205
119
Total depreciation, amortisation and
impairment losses
2,551
2,442
3,007
*) In 2008 and 2007 cost related to discontinuation of pulmonary diabetes projects
amounted to DKK 53 million and DKK 870 million, respectively.
263
2,623
2,886
119
2,281
89
1,744
2,400
1,833
8 Licence fees and other operating income (net)
DKK million
2009
2008
2007
5 Employee costs
DKK million
2009
2008
2007
Licence fees
Net income from IT, engineering and
other services
Other income
11,775
10,541
9,792
Total licence fees and other operating
income (net)
130
96
115
341
2009
313
62
–
–
375
146
229
50
90
26
66
286
321
2008
2007
631
–
462
34
322
–
911
70
1,127
1,303
9 Financial income
DKK million
Interest income
Foreign exchange gain (net)
Foreign exchange gain on
derivatives (net)
Gains on currency options (net)
Total financial income
10 Financial expenses
DKK million
2009
2008
2007
Interest expenses
Foreign exchange loss (net)
Foreign exchange loss on
derivatives (net)
Loss on currency options (net)
Capital loss on investments etc
Other financial expenses
384
–
757
56
16
52
246
355
–
–
28
52
324
71
–
–
60
52
Total financial expenses
1,265
681
507
Wages and salaries
Share-based payment costs
(refer to note 29)
Pensions – defined contribution plans
Pensions – retirement benefit
obligations (refer to note 24)
Other contributions to social security
Other employee costs
259
822
152
853
1,270
331
745
128
714
1,169
130
724
109
709
1,094
Total employee costs
15,131
13,628
12,558
Included in the Income statement:
Cost of goods sold
Sales and distribution costs
Research and development costs
Administrative expenses
Included in the Balance sheet:
Capitalised employee costs related
to assets in course of construction
Change in employee costs included
in inventories
3,952
6,063
3,218
1,811
3,676
5,083
3,040
1,654
3,519
4,498
2,813
1,563
66
21
29
146
58
107
Total employee costs
15,131
13,628
12,558
In addition, employee costs of DKK 1,699 million (DKK 1,657 million in 2008
and DKK 1,442 million in 2007) from NNE Pharmaplan and NNIT are con -
solidated in License fees and other operating income (net). Furthermore,
employee costs of DKK 345 million (DKK 297 million in 2008 and DKK 264
million in 2007) from NNE Pharmaplan have been capitalised as assets in
course of construction.
For information on remuneration to the Board of Directors and Executive
Management, please refer to note 30.
Average number of full-time employees
Year-end number of full-time employees
27,985
28,809
26,069
26,575
24,344
25,516
6 Fees to statutory auditors
DKK million
Statutory audit
Audit-related services
Tax advisory services
Other services
Total
2009
2008
2007
25
6
13
3
47
25
4
16
1
46
25
6
15
1
47
64 Novo Nordisk Annual Report 2009
11 Income taxes
DKK million
Current tax on profit for the year
Deferred tax on profit for the year
Tax on profit for the year
Adjustments related to previous years – current tax
Adjustments related to previous years – deferred tax
Income taxes in the Income statement
Computation of effective tax rate:
Statutory corporate income tax rate in Denmark
Deviation in foreign subsidiaries’ tax rates compared to the Danish tax rate (net)
Non-tax income less non-tax deductible expenses (net)
Effect on deferred tax related to change in the Danish tax rate in 2007
Other
Effective tax rate
Tax on exchange rate adjustment of investments in subsidiaries
Tax on fair value adjustments on financial instruments
Tax on other adjustments
Income tax relating to Other comprehensive income
12 Components of other comprehensive income
DKK million
Adjustment of cash flow hedges for the year:
Deferred gain/(loss) on cash flow hedge at the beginning of the year
Effect of hedged forecast transactions transferred to the Income statement
Fair value adjustments for the year on cash flow hedges
Adjustment of cash flow hedges for the year through Other comprehensive income
Deferred gain/(loss) on cash flow hedges at the end of the year
13 Earnings per share and dividend
DKK million
Net profit for the year
Average number of shares outstanding *)
Dilutive effect of outstanding share bonus pool and options ‘in the money’ **)
in 1,000 shares
in 1,000 shares
Average number of shares outstanding including dilutive effect of options ‘in the money’
in 1,000 shares
Basic earnings per share *)
Diluted earnings per share *)
DKK
DKK
In 2007, there was a stock split of the company’s A and B shares. The trade unit was changed from DKK 2 to DKK 1.
*)
**) For further information on outstanding share bonus pool and options, please refer to note 29 and 30.
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2009
2,382
840
3,222
(54)
52
3,220
25.0%
(2.2%)
0.2%
–
0.0%
23.0%
–
1
24
25
2008
2,233
851
3,084
(218)
184
3,050
25.0%
(0.3%)
(0.4%)
–
(0.3%)
2007
2,835
(347)
2,488
(11)
(28)
2,449
25.0%
2.9%
(3.2%)
(2.0%)
(0.4%)
24.0%
22.3%
(8)
(18)
(55)
(81)
–
12
81
93
2009
2008
2007
(859)
900
352
1,252
393
696
(615)
(940)
(1,555)
(859)
425
(363)
634
271
696
2009
10,768
599,197
5,126
604,323
17.97
17.82
2008
9,645
2007
8,522
615,780
4,947
631,783
4,639
620,727
636,422
15.66
15.54
13.49
13.39
Dividend
At the end of 2009, proposed dividends (not yet declared) of DKK 4,400 million (DKK 7.50 per share) are included in Retained earnings.
The declared dividend included in Retained earnings was DKK 3,650 million (DKK 6.00 per share) and DKK 2,795 million (DKK 4.50 per share) in 2008 and
2007, respectively.
No dividend is declared on treasury shares.
Novo Nordisk Annual Report 2009 65
14 Intangible assets
DKK million
2009
Cost at the beginning of 2009
Additions during the year
Disposals during the year
Exchange rate adjustments
Cost at the end of 2009
Amortisation and impairment losses at the beginning of 2009
Amortisation for the year
Impairment losses for the year
Amortisation and impairment losses reversed on disposals during the year
Exchange rate adjustments
Amortisation and impairment losses at the end of 2009
Carrying amount at the end of 2009
2008
Cost at the beginning of 2008
Additions during the year
Disposals during the year
Exchange rate adjustments
Cost at the end of 2008
Amortisation and impairment losses at the beginning of 2008
Amortisation for the year
Impairment losses for the year
Amortisation and impairment losses reversed on disposals during the year
Amortisation and impairment losses at the end of 2008
Carrying amount at the end of 2008
*) Includes primarily internally developed software and costs related to major IT projects.
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Goodwill
Patents and
licences etc
Other
intangible
assets *)
136
3
–
–
139
65
–
–
–
–
65
74
133
5
(2)
–
136
65
–
–
–
65
71
700
277
(49)
–
928
219
21
92
(49)
–
283
645
520
172
–
8
700
153
16
50
–
219
481
609
113
(6)
11
727
373
40
–
(6)
2
409
318
572
22
(7)
22
609
336
34
8
(5)
373
236
Total
1,445
393
(55)
11
1,794
657
61
92
(55)
2
757
1,037
1,225
199
(9)
30
1,445
554
50
58
(5)
657
788
The impairment test in 2009 and 2008 was based upon management’s projections and anticipated net present value of future cash flows from cash
generating units. Management has determined the discount rates (WACC) used based on the risk inherent in the related activity’s current business model and
industry comparisons. The used WACC is currency specific and dependent, among other things, on interest rate level and creditworthiness compared to DKK.
Terminal values used are based on the expected life of products, forecasted life cycle and forecasted cash flow over that period and the useful live of the
underlying assets.
In 2009 Novo Nordisk in-licensed a monoclonal antibody developed by ZymoGenetics and capitalised an upfront payment of DKK 124 million (USD 24 million).
In continuance hereof it was decided to close down the Anti-IFN-a project with Argos and recognise an impairment loss of DKK 40 million. In addition,
Novo Nordisk has terminated the development activities of rFXIII within the cancer indication and recognised an impairment loss of DKK 26 million. In 2008,
Novo Nordisk decided to exit the oncology area and recognised an impairment loss of DKK 50 million.
66 Novo Nordisk Annual Report 2009
Total
32,388
2,632
(328)
–
519
35,211
13,749
2,243
155
(279)
117
15,985
19,226
32,608
1,772
(1,761)
–
(231)
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a
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a
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–
s
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N
15 Property, plant and equipment
DKK million
2009
Cost at the beginning of 2009
Additions during the year
Disposals during the year
Transfer from/(to) other items
Exchange rate adjustments
Cost at the end of 2009
Depreciation and impairment losses at the beginning of 2009
Depreciation for the year
Impairment losses for the year
Depreciation and impairment losses reversed on disposals during the year
Exchange rate adjustments
Depreciation and impairment losses at the end of 2009
Land and
buildings
Plant and
machinery
Other
equipment
12,280
232
(81)
190
234
15,699
259
(129)
615
265
12,855
16,709
3,792
528
100
(73)
40
4,387
8,471
1,418
52
(105)
77
9,913
2,620
179
(118)
54
5
2,740
1,486
297
3
(101)
–
1,685
Payments on
account and
assets in
course of
construction
1,789
1,962
–
(859)
15
2,907
–
–
–
–
–
–
Carrying amount at the end of 2009
8,468
6,796
1,055
2,907
2008
Cost at the beginning of 2008
Additions during the year
Disposals during the year
Transfer from/(to) other items
Exchange rate adjustments
Cost at the end of 2008
Depreciation and impairment losses at the beginning of 2008
Depreciation for the year
Impairment losses for the year
Depreciation and impairment losses reversed on disposals during the year
Exchange rate adjustments
Depreciation and impairment losses at the end of 2008
12,208
164
(448)
472
(116)
15,564
261
(335)
378
(169)
12,280
15,699
3,618
516
6
(333)
(15)
3,792
7,317
1,399
92
(311)
(26)
8,471
2,289
164
(183)
335
15
2,620
1,366
265
3
(152)
4
1,486
2,547
1,183
(795)
(1,185)
39
1,789
32,388
702
–
53
(755)
–
13,003
2,180
154
(1,551)
(37)
–
13,749
Carrying amount at the end of 2008
8,488
7,228
1,134
1,789
18,639
16 Investments in associated companies
DKK million
Carrying amount of investments at the beginning of the year
Additions during the year
Disposals during the year
Share of profit/(loss) recognised in the Income statement
Dividend received from associated companies *)
Exchange rate adjustments and other equity movements
Carrying amount of investments at the end of the year
*) Dividend received from Harno Invest A/S (formerly Dako A/S).
2009
2008
222
15
–
(55)
(18)
12
176
500
–
(18)
(124)
(170)
34
222
In 2009 the associated companies realised DKK 170 million in sales and generated a net loss of DKK 598 million. Total assets amounted to DKK 2,168 million
whereas the total liabilities amounted to DKK 1,772 million.
Values of shareholdings in listed associated companies:
– ZymoGenetics, Inc. (NASDAQ symbol: ZGEN)
– Innate Pharma SA (Euronext symbol: IPH)
Please refer to note 34 for a list of Novo Nordisk associated companies.
Carrying
amount
–
126
2009
Market
value
693
100
Carrying
amount
32
125
2008
Market
value
331
48
Novo Nordisk Annual Report 2009 67
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a
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a
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d
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a
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i
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–
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N
17 Financial assets and liabilities
DKK million
Assets at the end of the year
2009
Available-for-sale financial assets
– Other non-current financial assets (equity investments)
– Marketable securities *)
Assets at fair value through profit and loss
– Derivative financial instruments (refer to note 31)
Loans and receivables
– Other non-current financial assets
– Trade receivables
– Other current assets less prepayments
– Cash at bank and in hand
Total
2008
Available-for-sale financial assets
– Other non-current financial assets (equity investments)
– Marketable securities *)
Assets at fair value through profit and loss
– Derivative financial instruments (refer to note 31)
Loans and receivables
– Other non-current financial assets
– Trade receivables
– Other current assets less prepayments
– Cash at bank and in hand
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Total
8
500
550
–
7,063
1,271
11,296
20,688
15
–
307
–
6,581
1,111
8,781
–
513
(33)
–
–
–
–
137
–
–
37
–
–
–
480
174
–
997
58
–
–
–
–
153
–
41
–
–
–
145
1,013
517
37
7,063
1,271
11,296
21,342
168
997
365
41
6,581
1,111
8,781
Total
16,795
1,055
194
18,044
*) Danish AAA-rated mortgage bonds issued by Danish credit institutions governed by The Danish Financial Supervisory Authority. Redemption yield on the bond portfolio is 1.79%
(4.3% in 2008) which matured 1 January 2010 (DKK 500 million) and 1 January 2011 (DKK 513 million).
DKK million
Liabilities at the end of the year
2009
Financial liabilities at amortised cost
– Non-current debt
– Current debt
– Trade payables
– Other current liabilities less taxes and duties payable
Derivatives used for hedging
– Derivative financial instruments (refer to note 31)
Total
2008
Financial liabilities at amortised cost
– Non-current debt
– Current debt
– Trade payables
– Other current liabilities less taxes and duties payable
Derivatives used for hedging
– Derivative financial instruments (refer to note 31)
Total
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Total
–
263
2,242
6,551
71
9,127
–
55
2,281
5,718
1,084
9,138
563
–
–
–
84
647
518
–
–
–
195
713
407
–
–
–
–
407
462
–
–
–
–
462
970
263
2,242
6,551
155
10,181
980
55
2,281
5,718
1,279
10,313
For a description of credit quality of financial assets such as Trade receivables, Cash at bank and in hand, Current debt and financial instruments, please refer
to note 28 and 31.
68 Novo Nordisk Annual Report 2009
17 Financial assets and liabilities (continued)
Financial assets that are measured in the Balance sheet at fair value can be categorised by the following fair value measurement hierarchy:
DKK million
2009
Available-for-sale financial assets
Other non-current financial assets (equity investments)
Marketable securities (bonds)
Assets at fair value through profit and loss
Derivative financial instruments
Total
2008
Available-for-sale financial assets
Other non-current financial assets (equity investments)
Marketable securities (bonds)
Assets at fair value through profit and loss
Derivative financial instruments
Total
Active
market
data *)
Directly or
indirectly
observable
market
data **)
Not based on
observable
market
data ***)
8
1,013
–
1,021
15
997
–
1,012
–
–
517
517
–
–
365
365
137
–
–
137
153
–
–
153
Total
145
1,013
517
1,675
168
997
365
1,530
*)
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets
held by the Group is the current bid price.
**) The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques.
***) If there is no observable market data, the instrument is included in the last category.
There were no significant transfers in and out of the first two categories in 2008 and 2009.
The following table presents the changes in the category “Not based on observable market data” for the year ended 31 December.
DKK million
Other non-current financial assets (equity investments)
Balance at the beginning of the year
Total gains/(losses) recognised in the Income statement
Total unrealised gains/(losses) recognised in Other comprehensive income
Purchases
Balance at the end of the year
2009
2008
153
(33)
–
17
137
98
(41)
3
93
153
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Novo Nordisk Annual Report 2009 69
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18 Inventories
DKK million
Raw materials and consumables
Work in progress
Finished goods
Total inventories
20 Other current assets
2008
DKK million
1,279
6,659
1,673
9,611
Prepayments *)
Interest receivable
Amounts owed by affiliated companies
Rent deposit
Other receivables **)
2009
1,143
6,694
2,179
10,016
2009
2008
691
83
118
344
726
593
54
146
305
606
Total other current assets
1,962
1,704
*) Comprise prepayments to ongoing research and development activities and pay-
ments made concerning subsequent financial years etc.
**) Other receivables comprise VAT receivables, miscellaneous duties and work in
progress for third parties etc.
Indirect production costs included in work
in progress and finished goods
5,046
4,633
Amount of write-down of inventories
recognised as expense during the year
Amount of reversal of write-down of
inventories during the year
19 Trade receivables
DKK million
Trade receivables (gross)
Allowances at the beginning of the year
Change in allowance during the year
Receivables written off during the year
as uncollectible
Allowances at the end of the year
314
115
733
48
2009
7,663
602
18
(20)
600
2008
7,183
542
69
(9)
602
Trade receivables (net)
7,063
6,581
Trade receivables (net) are equal to an
average credit period of (days)
Trade receivables (gross) can be specified as follows:
– Not yet due
– Overdue by between 1 and 179 days
– Overdue by between 180 and 359 days
– Overdue by more than 360 days
Trade receivables (gross)
50
53
6,193
741
513
216
7,663
5,699
901
263
320
7,183
70 Novo Nordisk Annual Report 2009
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21 Share capital
DKK million
Development in share capital:
2004 and before
2005
2006
2007
2008
At the beginning of the year
2009
At the end of the year
A share
capital
B share
capital
Total share
capital
107
–
–
–
–
107
–
107
602
–
(35)
(27)
(13)
527
(14)
513
709
–
(35)
(27)
(13)
634
(14)
620
At the end of 2009, the share capital amounted to DKK 107,487,200 in A share capital (equal to 107,487,200 A shares of DKK 1) and DKK 512,512,800
in B share capital (equal to 512,512,800 B shares of DKK 1).
Treasury shares
Number of As % of share
capital before
cancellation
B shares
of DKK 1
As % of share
capital after
cancellation
Market value
DKK million
Holding at the beginning of the year
Cancellation of treasury shares
25,721,095
(14,000,000)
4.06%
(2.21%)
Holding of treasury shares, adjusted for cancellation
11,721,095
1.85%
1.89%
Purchase during the year
Sale during the year
Value adjustment
Holding at the end of the year
21,661,949
(1,245,099)
–
32,137,945
6,970
(3,794)
3,176
6,512
(117)
1,099
3.49%
(0.20%)
5.18%
10,670
Acquisition of treasury shares during the year is part of the 2006 –2009 share buy-back programs of Novo Nordisk B shares. The DKK 19 billion program was
initiated in order to align the capital structure with the expected development in free cash flow. Sale of treasury shares relates to exercised share options and
employee shares.
At the end of the year 8,051,217 shares of the treasury B shareholding shares are regarded as hedges for the share-based incentive schemes and restricted
stock awards to employees.
22 Non-current debt
DKK million
Mortgage debt and other secured loans *)
Unsecured loans and other non-current loans **)
Total non-current debt
The debt is denominated in the following currencies:
DKK
EUR
USD
Total non-current debt
2009
2008
503
467
970
2
501
467
970
504
476
980
2
502
476
980
Adjustment of the above loans to market value at year-end 2009 would result in a loss of DKK 22 million (a loss of DKK 2 million at year-end 2008).
*) Terms to maturity between 2016 and 2022 and a weighted average interest rate of 1.31%.
**) Terms to maturity in 2011 and a weighted average interest rate of 0.35%.
Novo Nordisk Annual Report 2009 71
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23 Deferred income tax assets and liabilities
DKK million
At the beginning of the year
Deferred tax on profit for the year
Adjustment relating to previous years
Deferred tax on items recognised in Other comprehensive income
Exchange rate adjustments
Total deferred tax assets/(liabilities), net
2009
(708)
(840)
(52)
(14)
59
(1,555)
DKK million
Assets
Liabilities
Specification
The deferred tax assets and liabilities are allocable
to the various items in the Balance sheet as follows:
Property, plant and equipment
Intangible assets
Indirect production costs
Unrealised profit on intercompany sales
Provisions for doubtful trade receivables
Tax-loss carry-forward
Other
165
475
–
2,106
101
44
288
3,179
(1,432)
(5)
(1,262)
–
–
–
(2,035)
(4,734)
2009
Total
(1,267)
470
(1,262)
2,106
101
44
(1,747)
(1,555)
Assets
Liabilities
129
628
–
1,997
72
52
453
3,331
(1,502)
(7)
(1,158)
–
(2)
–
(1,370)
(4,039)
2008
176
(851)
(184)
108
43
(708)
2008
Total
(1,373)
621
(1,158)
1,997
70
52
(917)
(708)
Netting of deferred tax assets and deferred tax liabilities related to
income taxes for which there is a legally enforceable right to offset
(1,724)
1,724
–
(1,635)
1,635
–
Total deferred tax assets/(liabilities), net
1,455
(3,010)
(1,555)
1,696
(2,404)
(708)
Tax-losses carried forward
Further to the above, the tax value of tax losses carried forward of DKK 285 million (DKK 276 million in 2008) has not been recognised in the Balance sheet
due to the likelihood that the tax losses will not be realised in the future.
24 Retirement benefit obligations
Most employees in the Group are covered by post-employment retirement plans in the form of primarily defined contribution plans or alternatively defined
benefit plans. Group companies sponsor these plans either directly or by contributing to independently administered funds. The nature of such plans varies
according to the legal regulations, fiscal requirements and economic conditions of the countries in which the employees are employed, and the benefits
are generally based on the employees’ remuneration and years of service. The obligations relate both to existing retirees’ pensions and to pension entitlements
of future retirees.
The Group’s defined benefit plans are primarily located in Japan, Germany, the United States and Switzerland. Post-employment benefit plans are usually
funded by payments from group companies and by employees to funds independent of the Group. Where a plan is unfunded, a liability for the retirement
obligation is recognised in the Balance sheet. In accordance with the Accounting Policies, the costs recognised for post-employment benefits are included
in Cost of goods sold, Sales and distribution costs, Research and development costs or Administrative expenses.
Other post-employment benefits consist mostly of post-retirement healthcare plans, principally in the United States. The following shows a five-year summary
reflecting the funding of retirement obligations and the impact of historical deviations between expected and actual return on plan assets and actuarial
adjustments on plan liabilities:
DKK million
Retirement obligations
Fair value of plan assets
(Over)/under funding
Unrecognised actuarial gains/(losses)
Net retirement obligations recognised in the Balance sheet
Actuarial (gain)/loss on plan assets
Actuarial (gain)/loss on plan liabilities
2009
1,063
(620)
443
13
456
14
(29)
2008
2007
2006
2005
1,103
(649)
454
(35)
419
56
24
885
(566)
319
43
362
(3)
(151)
938
(495)
443
(113)
330
(3)
7
875
(435)
440
(124)
316
6
77
72 Novo Nordisk Annual Report 2009
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24 Retirement benefit obligations (continued)
DKK million
DKK million
2009
2008
Pension
plans
Medical
benefits
Total
Total
Changes in the retirement
obligations
At the beginning of the year
Current service costs
Interest cost
Actuarial (gains)/losses
Past service costs
Benefits paid
Curtailments
Settlements
Exchange rate adjustments
Other
At the end of the year
907
85
33
(26)
(4)
(50)
(2)
(104)
0
(7)
832
196
33
12
(3)
0
(3)
–
–
(3)
(1)
231
1,103
118
45
(29)
(4)
(53)
(2)
(104)
(3)
(8)
1,063
885
112
41
24
1
(52)
17
–
72
3
1,103
Costs recognised in the Income statement
for the year
Current service costs
Interest cost on pension obligation
Expected return on plan assets *)
Actuarial (gains)/losses recognised in the year
Curtailment/settlement gains
Past service costs
Total charge to the Income statement
*) Actual return on plan assets was DKK 6 million in 2009
(a loss of DKK 33 million in 2008).
The costs are recognised in the Income statement
as employee costs by function and consist of:
Defined benefit pension plans
Post-employment medical benefits
Total charge to the Income statement
2009
2008
118
45
(20)
30
(20)
(1)
152
112
41
(24)
(2)
–
1
128
107
45
152
92
36
128
DKK million
Changes in the fair value of plan assets
of the year
At the beginning of the year
Expected return on plan assets
Actuarial gains/(losses)
Employer contributions
Benefits paid to employees
Curtailments
Settlements
Exchange rate adjustments
Other
At the end of the year
DKK million
Amounts recognised in the Balance sheet
are determined as
Present value of funded obligations
Fair value of plan assets
Net retirement obligations funded
Present value of unfunded obligations
(Over)/ under funding
Unrecognised actuarial gains/(losses)
on pension benefit plans (net)
Unrecognised actuarial gains/(losses)
on post-employment medical plans (net)
Unrecognised past service costs
Net obligation recognised in the Balance sheet
2009
2008
The Group expects to contribute DKK 67 million to its defined benefit
pension plans in 2010.
649
20
(14)
68
(40)
3
(67)
1
0
620
566
24
(56)
81
(24)
11
–
44
3
649
Weighted average asset
allocation of funded
retirement obligations
Equities
Bonds
Cash at bank
Property
2009
2008
Total
2009
DKK
million
%
DKK
million
311
190
99
20
620
50%
31%
16%
3%
100%
142
376
98
33
649
2008
%
22%
58%
15%
5%
100%
832
(620)
212
231
443
(26)
37
2
456
870
(649)
221
233
454
(68)
36
(3)
419
DKK million
2009
2008
The weighted average assumptions used
for computation and valuation of defined
benefit plans and post-employment
medical benefits are as follows
Discount rate
Projected return on plan assets
Projected future remuneration increases
Healthcare cost trend rate
Inflation rate
4%
3%
3%
6%
2%
5%
4%
4%
6%
2%
For all major defined benefit plans, actuarial computations and valuations
are performed annually.
The effect of one percentage point increase or decrease in the medical cost
trend rate is shown below. The Group’s major postemployment medical
plans are for US employees.
Amounts recognised in the Balance sheet for post-employment defined
benefit pension plans and medical benefits are predominantly non-current
and are reported as Non-current debt.
DKK million
Changes in the retirement obligations
recognised in the Balance sheet
At the beginning of the year
Recognised in the Income statement
Employer contributions
Benefit paid to employees (net)
Settlements
Curtailments
Exchange rate adjustment
At the end of the year
DKK million
2009
2008
Current service cost and interest cost
Defined benefit obligation
Increase
Decrease
2
13
(3)
(14)
419
152
(68)
(13)
(37)
7
(4)
456
362
128
(81)
(28)
–
10
28
419
Novo Nordisk Annual Report 2009 73
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25 Provisions for other liabilities
DKK million
At the beginning of the year
Adjustments to previous year’s provisions
Additional provisions
Used during the year
Exchange rate adjustments
At the end of the year
Specification of other provisions:
Non-current
Current
Total provisions for other liabilities
Provisions
for returned
products *)
Provisions
for sales
rebates **)
Other
provisions
***)
594
(24)
245
(228)
1
588
–
588
588
2,281
(90)
4,933
(4,460)
(41)
911
(33)
323
(50)
36
2,623
1,187
–
2,623
2,623
1,157
30
1,187
2009
Total
3,786
(147)
5,501
(4,738)
(4)
4,398
1,157
3,241
4,398
2008
Total
3,640
(329)
3,975
(3,555)
55
3,786
863
2,923
3,786
*) Novo Nordisk issues credit notes for expired goods as a part of normal business. Consequently, a provision for future returns is made based on historical statistical product
**)
returns, which represents management’s best estimate. The provision is expected to be used within the normal operating cycle.
In some countries, the actual rebates depend on which customers purchase the products. Factors complicating the rebate calculations are the identification of which
products have been sold subject to a rebate, on which customer or government price terms apply, and the estimated time lag between sale and payment of the rebate.
Please refer to notes 1 and 4 for further information on rebates deducted from sales.
***) Other provisions consist of various types of provisions, including provisions for legal disputes, which represent management’s best estimate. Please refer to note 32 for further
information on commitments and contingencies.
26 Other current liabilities
DKK million
Employee costs payable
Taxes and duties payable
Deferred income
Amounts owed to affiliated companies
Other payables *)
Total other current liabilities
2009
2,742
262
50
38
3,721
6,813
2008
2,272
135
78
79
3,289
5,853
*) Other payables primarily consist of accruals related to ongoing R&D clinical trials,
royalty payments, staff accruals and interest accruals etc.
27 Other adjustments for non-cash items
DKK million
Share-based payment costs
Increase/(decrease) in provisions
and benefit obligations
(Gain)/loss from sale of property,
plant and equipment
Change in provisions for doubtful
trade receivables
Unrealised (gain)/loss on shares and
bonds etc
Unrealised foreign exchange (gain)/loss
Share of (profit)/loss in associated
companies
Other, including difference between
average exchange rate and year-end
exchange rate
Other adjustments for non-cash items
2009
259
649
(3)
18
21
(253)
55
113
859
2008
2007
331
221
95
69
30
24
130
490
140
119
54
37
124
(1,233)
(280)
614
226
(37)
74 Novo Nordisk Annual Report 2009
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28 Financial risk
Novo Nordisk has centralised the management of the Group’s financial risks.
The overall objective and policies for the company’s financial risk manage-
ment are outlined in the Treasury Policy, which is approved by the Board of
Directors. The Treasury Policy consists of the Foreign Exchange Policy, the
Investment Policy, the Financing Policy and the Policy regarding Credit Risk
on Financial Counterparts, and includes a description of allowed financial
instruments and risk limits.
Novo Nordisk only hedges commercial exposures and consequently does not
enter into derivative transactions for trading or speculative purposes. Novo
Nordisk uses a fully integrated Treasury Management System to manage all
financial positions. All positions are marked-to-market based on real-time
quotes and risk is assessed using generally accepted standards.
Foreign exchange risk
Foreign exchange risk is the principal financial risk for Novo Nordisk and
as such has a significant impact on the Income statement and the Balance
sheet.
The bulk of Novo Nordisk’s sales is in EUR, USD, JPY, CNY and GBP, while
most production, research and development costs are carried in DKK. As a
consequence, Novo Nordisk’s foreign exchange risk is most significant in
USD, JPY, CNY and GBP, excluding EUR for which the exchange rate risk is
regarded as low due to the Danish fixed-rate policy towards the EUR.
The overall objective of foreign exchange risk management is to limit the
short-term negative impact on earnings and cash flow from exchange rate
fluctuations, thereby increasing the predictability of the financial results.
Novo Nordisk hedges existing assets and liabilities in major currencies as
well as future expected cash flows up to 24 months forward. Currency
hedging is based upon expectations of future exchange rates and takes
place using mainly foreign exchange forwards and foreign exchange options
matching the due dates of the hedged items. Expected cash flows are
continuously assessed using historical inflows, budgets and monthly sales
forecasts. Hedge effectiveness is assessed on a regular basis.
In 2009, the USD, the JPY and the CNY depreciated by 1.8%, 3.9%, and
1.7% versus DKK, respectively. In 2008, the USD, the JPY and the CNY
appreciated by 4.1%, 30.3%, and 11.3% versus DKK, respectively. The GBP
appreciated by 7.6% in 2009. In 2008, the GBP de preciated by 24.6%.
At year-end 2009, Novo Nordisk covered the foreign exchange exposures
on the Balance sheet together with 17 months of expected future cash flow
in USD and CNY. For JPY and GBP, the equivalent cover was 15 months and
14 months of expected future cash flow, respectively. At the end of 2008,
the USD and CNY cover was 15 months, and for JPY and GBP the cover was
13 months.
A 5% increase/decrease in the following currencies will have a full-year
impact on operating profit of approximately:
DKK million
USD
JPY
CNY
GBP
CAD
Estimated
for
2010
580
150
100
80
40
2009
530
150
80
80
40
At the end of 2009, a 5% increase in all other currencies versus EUR and
DKK would result in a decrease of the value of the net financial instruments
of the Group of approximately DKK 927 million (DKK 661 million in 2008).
A 5% decrease in all other currencies versus EUR and DKK would result
in an increase of the value of the net financial instruments of the Group of
approximately DKK 977 million (DKK 669 million in 2008).
The financial instruments included in the foreign exchange sensitivity
analysis are the Group’s Cash, Accounts receivable and Account payable,
Current and non-current loans, Current and non-current financial invest-
ments, foreign exchange forwards and foreign exchange options hedging
transaction exposure. Furthermore, interest rate swaps and cross-currency
swaps are included. Not included are anticipated currency transactions,
investments and fixed assets. Cross-currency swaps hedging translation
exposure are excluded from the sensitivity analysis, as the effects of chang-
ing exchange rates hereon are recognised directly in Other comprehensive
income.
Novo Nordisk only hedges invested equity in major foreign affiliates to a
very limited extent. Equity hedging takes place using long-term cross-
currency swaps. At the end of 2009, hedged equity made up 16% of the
Group’s JPY equity. At the end of 2008, 12% of the Group’s JPY equity
was hedged.
Interest rate risk
DKK and EUR interest rates fell during most of 2009, particularly during the
first quarter of the year. The Danish two-year interest rate was 2.42% at the
end of 2009, down from 3.57% at the end of 2008. Short-term interest
rates fell even more. The three month Cibor was 1.55% at the end of 2009,
down from 4.91% at the end of 2008.
Changes in interest rates have an effect on Novo Nordisk’s financial instru-
ments. At the end of 2009, an increase in the interest rate level of one
percentage point would, everything else being equal, increase the fair value
of Novo Nordisk’s financial instruments by DKK 19 million (DKK 19 million
in 2008).
The financial instruments included in the sensitivity analysis consist of
Marketable securities, Deposits, Current and non-current loans, Interest rate
swaps and cross-currency swaps. Not included are foreign exchange for-
wards and foreign exchange options due to the limited effect that a parallel
shift in interest rates in all currencies has on these instruments.
Liquidity risk
Novo Nordisk ensures availability of required liquidity through a combina-
tion of cash management, highly liquid investment portfolios and uncom-
mitted as well as committed facilities. Novo Nordisk uses cash pools for
optimisation and centralisation of cash management. For non-cash pool
affiliates, surplus cash above the balance required for working capital
management is deposited with the parent company, who invests surplus
cash in money market deposits and marketable securities.
Counterparty risk
The use of derivatives and money market deposits gives rise to counterparty
exposure. To manage the credit risk on financial counterparties, Novo
Nordisk only enters into derivative financial contracts and money market
deposits with financial counterparties which have a satisfactory long-term
credit rating assigned by both Standard and Poor’s and Moody’s. At the end
of 2009, the majority of Novo Nordisk deposits are secured by the general
Danish State guarantee until September 2010. Furthermore, maximum
credit lines defined for each counterparty limit the overall counterparty risk.
The credit risk on bonds is limited as investments are made in highly liquid
bonds with solid credit ratings.
Credit risk on Trade receivables and Other current assets is limited as Novo
Nordisk has no significant concentration of credit risk, with exposure being
spread over a large number of counterparties and customers.
Capital structure
Novo Nordisk’s capital structure is characterised by a substantial equity
ratio. This is in line with the general capital structure of the pharmaceutical
industry and reflects the inherent long-term investment horizons in an
industry with typically more than 10 years’ development time for pharma-
ceutical products. Novo Nordisk’s equity ratio, calculated as equity to total
liabilities, was 65.3% at the end of the year (65.2% at the end of 2008).
Novo Nordisk Annual Report 2009 75
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29 Share-based payment schemes
The total number of shares in the joint pools relating to the years 2007,
2008 and 2009:
DKK million
2009
2008
2007
Year allocated to pool
Number of shares
Vesting
Total share-based payment costs
recognised in the Income statement
Employee shares (DK-based employees)
Employee shares (outside DK)
Long-term share-based incentive
programme (Senior Management Board)
Long-term share-based incentive
programme and share options
(management group below
Senior Management Board) *)
Share-based payment expensed in the
Income statement
–
49
54
156
259
156
15
55
–
9
43
105
78
331
130
*) Includes long-term share-based incentive programme for 2007 to 2009 and share
option programme for 2004 to 2006.
Long-term share-based incentive programme
For a description of the programme, please refer to the section Executive
Remuneration on pp 39 – 40.
In 2009, the allocation to the joint pool for members of the Senior
Management Board amounted to DKK 54 million, corresponding to 7.0
months’ salary. This amount was expensed in 2009. The cash amount was
converted into 177,066 Novo Nordisk B shares of DKK 1 using a share price
of DKK 307, equal to the average trading price for Novo Nordisk B shares
on NASDAQ OMX Copenhagen from 29 January to 12 February 2009.
Based on the split of participants at the establishment of the joint pool, ap -
proximately 30% of the pool will be allocated to the members of Executive
Management and 70% to members of the Senior Management Board.
The shares allocated to the joint pool for 2006 (261,500 shares) were
released to the individual participants on 1 February 2010 following the
approval of the Annual Report 2009 by the Board of Directors.
For the management group below the Senior Management Board, a similar
share-based incentive programme was introduced in 2007. For the service
entities NNIT and NNE Pharmaplan separate share-based incentive pro-
grammes have been setup which are similar to the general Novo Nordisk
programme but operates with entity specific targets.
For 2007, the total group below Senior Management Board including NNIT
and NNE Pharmaplan consisted of about 500 employees. The allocation to
the joint pool was DKK 135 million in 2007, corresponding to 527,665
shares. The cost of this allocation will be amortised equally over the period
2007–2010.
For 2008, this group consisted of about 590 employees. The allocation to
the joint pool was DKK 181 million corresponding to 570,390 shares. The
cost of this allocation will be amortised equally over the period 2008 –2011.
For 2009, this group consisted of about 675 employees. The allocation to
the joint pool was DKK 186 million corresponding to 605,218 shares. The
cost of this allocation will be amortised equally over the period 2009 –2012.
Senior management board
2007
2008
2009
Management group below
Senior management board
2007
2008
2009
Cancelled
Total
166,292
171,492
177,066
514,850
527,665
570,390
605,218
(27,853)
1,675,420
2,190,270
2011
2012
2013
2011
2012
2013
Share options
Novo Nordisk had established share option schemes in 1998 –2006 with the
purpose of motivating and retaining a qualified management group and to
ensure common goals for management and the owners. Each option gives
the right to purchase one Novo Nordisk B share. All share options are
hedged by treasury shares. No options have been granted since 2006 as the
long-term incentive programme from 2007 onwards has been share-based.
The options are exercisable three years after the issue date and will expire
after eight years. The exercise price for options granted based on per -
formance targets for the financial years 2000 –2006 was equal to the
market price of the Novo Nordisk B share at the time when the plan was
established. The options can only be settled in shares.
Assumptions
The market value of the Novo Nordisk B share options has been calculated
using the Black-Scholes option pricing model.
The expected volatility is calculated as one-year historic volatility – average
of daily volatilities.
The assumptions used are shown in the table below:
Expected life of the option in years
(average)
Expected volatility
Expected dividend per share (in DKK)
Risk-free interest rate
(based on Danish government bonds)
Novo Nordisk B share price
at the end of the year
2009
2008
2007
6
26%
7.50
6
29%
6.00
6
21%
4.50
2.00%
3.00%
4.25%
332
271
335
76 Novo Nordisk Annual Report 2009
201
289
201
201
201
201
201
201
201
201
137
137
137
137
137
137
137
137
137
189
1,535
201
(28)
(32)
(18)
(45)
(114)
(31)
(12)
(3)
(505)
948
(35)
(15)
(20)
(25)
(69)
0
(1)
(14)
287
1,056
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Average exercise
price per option
DKK
Market value
per option
DKK
Market
value
DKK million
29 Share-based payment schemes (continued)
Outstanding share options in Novo Nordisk
Outstanding at the end of 2007
Employee share options granted in 2008 *)
Exercised in 2008:
Of 1999 Ordinary share option plan
Of 2000 Ordinary share option plan
Of 2001 Ordinary share option plan
Of 2003 Ordinary share option plan
Of 2004 Launch share option plan
Of 2005 Employee share options **)
Expired in 2008
Cancelled in 2008
Value adjustment ***)
Share options
7,638,748
694,500
(140,500)
(159,525)
(92,700)
(225,225)
(566,516)
(156,380)
(58,070)
(16,000)
140
0
99
99
166
97.5
133.5
0
140
140
Outstanding at the end of 2008
6,918,332
133
Exercised in 2009:
Of 2000 Ordinary share option plan
Of 2001 Ordinary share option plan
Of 2003 Ordinary share option plan
Of 2004 Ordinary share option plan
Of 2005 Ordinary share option plan
Of 2008 Employee share options *)
Expired in 2009
Cancelled in 2009
Value adjustment ***)
Outstanding at the end of 2009
(258,341)
(113,484)
(148,255)
(186,350)
(500,225)
(1,530)
(5,000)
(105,700)
99
166
97.5
133.5
153
0
99
133
5,599,447
135
*) Granted to all employees outside Denmark under the 2008 employee share option programme, with a benefit equal to the benefit obtained by the Danish-based employees
under the employee share option programme.
**) Granted to employees in certain countries outside Denmark under the 2005 employee share option programme, with a benefit equal to the benefit obtained by the Danish-
based employees under the employee share option programme.
***) The market value has been calculated using the Black-Scholes model with the parameters existing at year-end of the respective year.
Exercisable and outstanding
share options in Novo Nordisk
Issued
share
options
Exercised
share
options
2000 Ordinary share option plan
2001 Ordinary share option plan
2003 Ordinary share option plan
2004 Ordinary share option plan
2005 Ordinary share option plan
1,526,000
1,369,960
2,185,000
1,618,832
1,640,468
(1,474,496)
(846,064)
(1,352,490)
(752,866)
(500,225)
Expired
Cancelled
(5,000)
–
–
–
–
(46,504)
(95,788)
(82,666)
(118,000)
(152,818)
–
428,108
749,844
747,966
987,425
Outstanding/
exercisable
share options
Exercise
price
DKK
Exercisable at the end of 2009
8,340,260
(4,926,141)
(5,000)
(495,776)
2,913,343
2006 Ordinary share option plan
2008 Employee share option
2,229,084
694,500
–
(1,530)
–
–
(166,500)
(69,450)
2,062,584
623,520
Outstanding at the end of 2009 *)
11,263,844
(4,927,671)
(5,000)
(731,726)
5,599,447
*) All share options will vest if there is a change of control of Novo Nordisk A/S, please refer to note 32.
Average market price of Novo Nordisk B shares per trading period in 2009
29 January – 12 February
30 April – 14 May
6 August – 20 August
29 October – 12 November
Total exercised options
99
166
98
134
153
175
0
Exercise period
22/2/04 – 21/2/09
8/2/05 – 7/2/10
6/2/07 – 5/2/12
31/1/08 – 30/1/13
31/1/09 – 30/1/14
31/1/10 – 30/1/15
1/11/11
Average
market price
DKK
307
274
313
321
Exercised
share
options
839,996
52,159
195,400
120,630
1,208,185
Novo Nordisk Annual Report 2009 77
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30 Management’s remuneration, share options and shareholdings
For information on the Board of Directors, the members of Executive Management and other members of the Senior Management Board, please refer to
pp 43 – 46 of this Annual Report.
Fee to the Board of Directors and the Audit Committee
In 2009, the base fee for members of the Board of Directors was DKK 400,000 (DKK 400,000 in 2008).
DKK million
Sten Scheibye (chairman of the Board)
Göran A Ando (vice chairman of the Board and R&D facilitator)
Kurt Anker Nielsen (chairman of the Audit Committee)
Jørgen Wedel (Audit Committee member)
Hannu Ryöppönen (Audit Committee member)
Other members of the Board of Directors/Audit Committee
Total
Board of
Directors
Audit
Committee
1.0
0.9
0.4
0.4
0.3
2.5
5.5
–
–
0.5
0.2
0.2
–
0.9
2009
Total
1.0
0.9
0.9
0.6
0.5
2.5
6.4
Board of
Directors
Audit
Committee
1.0
0.9
0.4
0.4
–
2.8
5.5
–
–
0.5
0.2
–
0.1
0.8
2008
Total
1.0
0.9
0.9
0.6
–
2.9
6.3
Executive Management and other members of the Senior Management Board
DKK million
2009
Executive Management:
Lars Rebien Sørensen
Jesper Brandgaard
Lise Kingo
Kåre Schultz
Mads Krogsgaard Thomsen
Executive Management in total
Other members of the Senior Management Board in total *)
Joint pool **)
2008
Executive Management:
Lars Rebien Sørensen
Jesper Brandgaard
Lise Kingo
Kåre Schultz ***)
Mads Krogsgaard Thomsen
Executive Management in total
Other members of the Senior Management Board in total *)
Joint pool **)
Fixed salary
Cash bonus
Pensions
Other
benefits
Share-based
payment
Total
remuneration
6.5
4.2
3.8
4.5
4.2
23.2
59.5
6.3
3.9
3.5
4.9
3.9
22.5
55.3
1.6
1.4
1.3
1.2
1.0
6.5
2.0
1.4
1.2
1.6
1.3
7.5
0.3
0.3
0.3
0.3
0.3
1.5
20.5
19.6
10.6
2.1
1.4
1.2
1.8
1.4
7.9
2.1
1.3
1.2
1.5
1.3
7.4
17.1
17.3
0.3
0.3
0.3
0.9
0.3
2.1
8.1
–
–
–
–
–
–
–
54.4
–
–
–
–
–
–
–
54.5
10.4
7.3
6.6
7.6
6.8
38.7
110.2
54.4
10.8
6.9
6.2
9.1
6.9
39.9
97.8
54.5
*)
The total remuneration for 2009 includes remuneration to 25 senior vice presidents. The total remuneration for 2008 includes remuneration to 26 senior vice presidents, two of
whom resigned during the year.
**) The joint pool is locked up for three years before it is transferred to the participants employed at the end of the three-year period. The value is the cash amount of the share
bonus granted in the year using the grant date market value of Novo Nordisk B shares. Based on the split of participants at the establishment of the joint pool, approximately
30% of the pool will be allocated to the members of Executive Management and 70% to other members of the Senior Management Board (2008: 35% and 65%, respectively).
In the lock-up period the joint pool may potentially be reduced in case of lower-than-planned value creation in subsequent years.
***) The total remuneration in 2008 reflects costs in relation to Kåre Schultz’ expatriation to Switzerland. Out of the total remuneration, approximately 8.9% is related to cost
compensation and associated tax effects of being expatriated.
78 Novo Nordisk Annual Report 2009
30 Management’s remuneration, share options and shareholdings (continued)
The shares allocated to the joint pool for 2006 (261,500 shares) were released to the individual participants following approval by the Board of Directors
on 1 February 2010. Based on the share price at the end of 2009, the value of the released shares is as follows:
Value per 31 December 2009 of shares released 1 February 2010
Executive Management:
Lars Rebien Sørensen
Jesper Brandgaard
Lise Kingo
Kåre Schultz
Mads Krogsgaard Thomsen
Executive Management in total
Other members of the Senior Management Board in total **)
*) The market value of the shares released in 2010 is based on Novo Nordisk B share price at the end of 2009 of DKK 332.
**) In addition 34,872 shares (market value: DKK 11.6 million) were released to retired members of management.
Number Market value *)
DKK million
of shares
26,138
17,430
17,430
17,430
17,430
95,858
130,770
8.6
5.8
5.8
5.8
5.8
31.8
43.4
Lars Rebien Sørensen serves as a member of the Board of Directors of Danmarks Nationalbank and retains the remuneration of DKK 10,000 in 2009 (not a
member in 2008) and as a member of the Board of Directors of ZymoGenetics, Inc. and does not retain any compensation. Furthermore, Lars Rebien Sørensen
serves as a member of the Supervisory Board of Bertelsmann AG and retains the remuneration of EUR 87,500 in 2009 (EUR 55,000 in 2008) and as a member
of the Supervisory Board of DONG Energy A/S and retains the remuneration of DKK 175,000 in 2009 (DKK 168,750 in 2008). Jesper Brandgaard serves as
chairman of the Board of SimCorp A/S and retains the remuneration of DKK 856,400 in 2009 (DKK 442,500 in 2008). Until March 2008 Lise Kingo served as a
member of the Board of Directors of GN Store Nord A/S and retained the remuneration of DKK 100,000. Kåre Schultz serves as a member of the Board of
Directors of Lego A/S and retains the remuneration of DKK 250,000 in 2009 (DKK 250,000 in 2008). Mads Krogsgaard Thomsen serves as a member of the
Board of Directors of Cellartis AB and retains the remuneration of SEK 50,000 (SEK 50,000 in 2008). In 2008 Mads Krogsgaard Thomsen also served as a
member of the Board of Directors of DTU and retained the remuneration of DKK 60,000.
Management’s share options
Share options in Novo Nordisk
Executive Management:
Lars Rebien Sørensen
Jesper Brandgaard
Lise Kingo
Kåre Schultz
Mads Krogsgaard Thomsen
Executive Management in total
At the
beginning
of the year
Exercised
during
the year
Additions
during
the year **)
At the end
of the year
Market
value *)
DKK million
90,000
45,500
19,000
–
45,500
22,000
12,500
–
–
12,500
200,000
47,000
–
–
–
–
–
–
68,000
33,000
19,000
–
33,000
153,000
13.7
6.6
4.4
–
6.6
31.3
46.1
77.4
Other members of the Senior Management Board in total
276,950
42,750
8,750
242,950
Total
476,950
89,750
8,750
395,950
*) Calculation of market values at year-end has been based on the Black-Scholes option pricing model applying the assumptions shown in note 29.
**) Additions during the year cover the holdings of share options by the Senior Management Board members appointed in 2009.
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Novo Nordisk Annual Report 2009 79
30 Management’s remuneration, share options and shareholdings (continued)
Management’s holdings of Novo Nordisk shares
The internal rules for trading by board members, executives and certain employees in Novo Nordisk securities only permit trading in the 15-calendar-day period
following each quarterly announcement.
At the beginning
of the year
Addition
during the year
Sold/released
during the year
At the end Market value *)
DKK million
of the year
Shares in Novo Nordisk
Board of Directors:
Sten Scheibye
Göran A Ando
Anne Marie Kverneland
Henrik Gürtler
Johnny Henriksen
Jørgen Wedel
Kurt Anker Nielsen
Hannu Ryöppönen
Pamela J Kirby
Stig Strøbæk
Søren Thuesen Pedersen
Board of Directors in total
Executive Management:
Lars Rebien Sørensen
Jesper Brandgaard
Lise Kingo
Kåre Schultz
Mads Krogsgaard Thomsen
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800
1,200
3,100
–
760
11,000
98,904
–
–
420
585
–
400
–
–
–
–
–
600
–
–
–
–
–
328
–
–
–
15,200
–
–
–
–
800
1,600
2,772
–
760
11,000
83,704
600
–
420
585
116,769
1,000
15,528
102,241
920
420
220
37,846
420
45,208
27,968
15,468
15,468
27,968
35,208
27,968
15,468
8,214
16,500
10,920
420
220
45,100
11,888
0.3
0.5
0.9
–
0.3
3.7
27.8
0.2
–
0.1
0.2
34.0
3.6
0.1
0.1
15.0
3.9
22.7
19.4
Executive Management in total
39,826
132,080
103,358
68,548
The Senior Management Board in total
29,450
151,666
122,792
58,324
Joint pool for Executive Management and
other members of the Senior Management Board **)
736,324
177,066
186,750
726,640 ***)
241.2
Total
922,369
461,812
428,428
955,753
317.3
*) Calculation of the market value is based on the quoted share price of DKK 332 at the end of the year.
**) The annual allocation to the joint pool is locked up for three years before it is transferred to the participants employed at the end of each three-year period. Based on the split
of participants at the establishment of the joint pool, 30 –35% of the pool will be allocated to the members of Executive Management and 65–70% to other members of the
Senior Management Board. In the lock-up period, the joint pool may potentially be reduced in case of lower-than-planned value creation in subsequent years.
***) Excludes 49,710 shares currently assigned for 4 retired members of management.
80 Novo Nordisk Annual Report 2009
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31 Financial instruments
Novo Nordisk uses a number of derivatives to hedge currency exposure. Novo Nordisk’s currency hedging activities are categorised into hedging of forecasted
transactions (cash flow hedges), hedging of assets and liabilities (fair value hedges) and hedging of net investments.
Hedging of forecasted transactions (cash flow hedge)
The table below shows the fair value of cash flow hedging activities for 2009 and 2008 specified by hedging instrument and the major currencies. The fair
value of the financial instruments qualifying for hedge accounting is recognised directly under Other comprehensive income until the hedged items are
recognised in the Income statement. At year-end, a gain of DKK 388 million is deferred via Other comprehensive income (a loss of DKK 864 million in 2008).
The fair values of the financial instruments not qualifying for hedge accounting are recognised directly in the Income statement.
Hedging of forecasted transactions qualifying for hedge accounting
2009
2008
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
DKK million
Forward contracts, net sales:
USD
JPY
GBP
Other
Total forward contracts
Cross-currency and interest rate swaps:
EUR / EUR
EUR/USD
Total cross-currency and interest rate swaps
12,799
3,728
916
563
18,006
250
503
753
266
132
20
–
418
–
–
–
Total hedging of forecasted transactions
18,759
418
Other forecast transaction hedges for which hedge accounting is not applied
Cross currency and interest rate swaps:
DKK / DKK
EUR / EUR *)
EUR / USD *)
JPY/ DKK
Total cross currency and interest rate swaps
Currency options
310
–
–
314
624
3,274
–
–
–
55
55
37
Total hedging of forecasted transactions
22,657
510
*) The contract value is disclosed only in the upper table.
–
–
–
15
15
4
11
15
30
17
9
40
–
66
–
96
10,326
3,464
1,027
354
15,171
251
504
755
–
–
163
31
194
5
–
5
550
511
–
–
1,061
–
2
2
15,926
199
1,063
310
–
–
314
624
1,080
–
–
–
40
40
17
15
8
32
–
55
–
17,630
256
1,118
The financial contracts existing at the end of the year
(cash flow hedges) cover the expected future cash flow for
the following number of months:
USD
JPY
GBP
2009
2008
17 months
15 months
14 months
15 months
13 months
13 months
The maturity of the swaps existing at the end of 2009 is December 2011 and December 2012 (December 2011 and December 2012 at the end of 2008).
Novo Nordisk Annual Report 2009 81
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31 Financial instruments (continued)
Hedging of assets and liabilities (fair value hedge)
The table below shows the fair value of fair value hedging activities for 2009 and 2008 specified by hedging instrument and the major currencies.
All changes in fair values are recognised in the Income statement amounting to a loss of DKK 49 million in 2009 (a loss of DKK 34 million in 2008).
As the hedges are highly effective, the net gain or loss on the hedged items is similar to the net loss or gain on the hedging instruments.
DKK million
Forward contracts, net sales:
USD
JPY
GBP
Other
Total forward contracts
Total hedging of assets and liabilities
2009
2008
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
2,092
764
304
542
3,702
3,702
–
–
7
–
7
7
25
13
–
18
56
56
1,235
669
326
448
2,678
2,678
2
–
51
56
109
109
–
143
–
–
143
143
The financial contracts existing at the end of the year hedge the currency exposure on assets and liabilities in the Group’s major currencies other than DKK
and EUR, ie primarily assets and liabilities in USD, JPY and GBP.
Hedging of net investments in foreign subsidiaries (net investment hedge)
The table below shows the fair value of hedging activities relating to net investments in foreign subsidiaries for 2009 and 2008 specified by hedging
instrument and the major currencies. All changes in fair values relating to currency are recognised directly in Other comprehensive income, amounting
to a loss of DKK 3 million in 2009 (a loss of DKK 18 million in 2008). All changes relating to interest rates are recognised in the Income statement,
amounting to DKK 1 million in 2009 (DKK 1 million in 2008).
DKK million
Cross-currency swaps:
JPY/ DKK
Total hedging of net investments in foreign subsidiaries
2009
2008
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
166
166
–
–
3
3
100
100
–
–
18
18
The maturity of the swap existing at the end of 2009 is November 2012 (October 2009, at the end of 2008).
The financial contracts existing at the end of the year hedge the following share of the major net investments:
DKK million
USD
JPY
GBP
EUR *)
Other
Total
2009
2008
Net investment
% covered
Net investment
% covered
3,283
1,028
168
3,755
5,400
13,634
0%
16%
0%
0%
0%
2,423
1,013
153
4,301
3,782
11,672
0%
12%
0%
0%
0%
*) Including subsidiaries with EUR as the functional currency regardless of the local currency in the subsidiary.
82 Novo Nordisk Annual Report 2009
31 Financial instruments (continued)
Total hedging activities
The table below summarises the fair values of all the hedging activities of Novo Nordisk.
DKK million
Currency-related instruments
Forward contracts, cash flow hedges
Forward contracts, fair value hedges
Currency options, cash flow hedges
Cross-currency swaps, cash flow hedges
Cross-currency swaps, other forecast transaction hedges
Cross-currency swaps, net investment hedging
Total currency-related instruments
Interest-related instruments
Interest rate swaps, cash flow hedges
Interest rate swaps, other forecast transaction hedges
Total interest-related instruments
Total derivatives included in Marketable securities
and financial instruments and in Current debt and
financial instruments
The fair value adjustments are recognised in
Income statement
– Other forecast transaction hedges for which hedge
accounting is not applied
– Fair value hedges
Other comprehensive income
– Cash flow hedges
– Net investment hedges
(included in exchange rate adjustment)
Total fair values
2009
2008
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
18,006
3,702
3,274
503
314
166
25,965
250
310
560
418
7
37
–
55
–
517
–
–
–
15
56
–
11
40
3
125
4
26
30
15,171
2,678
1,080
504
314
100
19,847
251
310
561
194
109
17
–
40
–
360
5
–
5
1,061
143
–
2
32
18
1,256
–
23
23
26,525
517
155
20,408
365
1,279
92
7
418
–
517
66
56
30
3
155
57
109
199
–
365
55
143
1,063
18
1,279
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Novo Nordisk Annual Report 2009 83
32 Commitments and contingencies
Contingencies
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DKK million
Commitments
Operating lease commitments
The operating lease commitments below are
related to non-cancellable operating leases
primarily related to premises, company cars and
office equipment. Approximately 55% of the
commitments are related to leases outside
Denmark. The lease costs for 2009 and 2008
were DKK 615 million and DKK 547 million,
respectively.
Lease commitments expiring within
the following periods as from the end
of the reporting period:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
Purchase obligations
The purchase obligations primarily relate to
contractual obligations to investments in proper-
ty, plant and equipment as well as purchase
agreements regarding medical equipment and
consumer goods. Novo Nordisk expects to fund
these commitments with existing cash and cash
flows from operations.
Obligations relating to research
and development projects
Novo Nordisk has engaged in research and
development projects with a number of external
corporations. The major part of the obligations
comprises fees on the phase 3 Decludec and
DecludecPlus programmes.
Other guarantees
Other guarantees primarily relate to guarantees
issued by Novo Nordisk in relation to rented
property.
2009
2008
See note 1 for the principles for making accounting estimates and judge-
ments about pending and potential future litigation outcomes.
Pending litigation against Novo Nordisk
As of 1 February 2010, Novo Nordisk Inc., along with a majority of the
hormone therapy product manufacturers in the US, is a defendant in pro -
duct liability lawsuits related to hormone therapy products. These lawsuits
currently involve a total of 52 individuals (as compared to 50 individuals
in January 2009) who allege to have used 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.). According to information received from Pfizer, 63 individuals (as com-
pared to 51 individuals in January 2009) currently allege, in relation to
similar lawsuits against Pfizer Inc, that they also have used a Novo Nordisk
hormone therapy product. Currently, Novo Nordisk does not have any trials
scheduled in 2010. Novo Nordisk does not expect the pending claims to
have a material impact on Novo Nordisk’s financial position, operating profit
or cash flow.
In November 2006, Novo Nordisk A/S and the Italian affiliate Novo Nordisk
Farmaceutici S.P.A. were sued by A. Menarini Industrie Farmaceutiche
Riunite s.r.l. and Laboratori Guidotti S.P.A. (‘Menarini’) in the Civil Court in
Rome. Menarini alleges that Novo Nordisk breached an alleged contract
with Menarini for the sale and distribution of insulin and insulin analogues
in the Italian market or, in the alternative, has incurred a pre-contractual
or extra-contractual liability arising from negotiations between the parties.
Novo Nordisk disputes the claims made by Menarini. A hearing in the
matter is scheduled to take place in January 2011. Novo Nordisk cannot
predict how long the litigation will take or when it will be able to provide
additional information. At this point in time, Novo Nordisk does not expect
the pending claim to have a material impact on Novo Nordisk’s financial
position, operating profit or cash flow.
Novo Nordisk Inc. is currently a defendant in four separate cases filed in the
US alleging that Novo Nordisk and a number of other pharmaceutical com-
panies provided a false Average Wholesale Price for certain drugs covered
by Medicaid. These cases have been brought by the State of Alabama and
the counties of Oswego, Erie and Schenectady, New York. Novo Nordisk was
dismissed from a similar action brought by the State of Mississippi. Further,
in 2005, Novo Nordisk was dismissed in 38 similar cases brought by counties
in the State of New York. Novo Nordisk does not expect the pending claims
to have a material impact on Novo Nordisk’s financial position, operating
profit or cash flow.
670
559
441
346
315
679
579
483
394
302
281
710
3,010
2,749
2,051
2,093
1,989
764
443
412
In addition to the above, the Novo Nordisk Group is engaged in certain
litigation proceedings. In the opinion of management, settlement or
continuation of these proceedings are not expected to have a material
effect on Novo Nordisk’s financial position, operating profit or cash flow.
Security for debt
Land, buildings and equipment, etc at carrying
amount.
1,459
1,401
World Diabetes Foundation
At the Annual General Meeting of Novo Nordisk A/S in 2002, the share -
holders agreed on a donation to the World Diabetes Foundation, obligating
Novo Nordisk A/S for a period of 10 years from 2001 to make annual dona-
tions to the Foundation of 0.25% of the net insulin sales of the Group in the
preceding financial year.
At the Annual General Meeting in 2008, a new donation in supplement to
the existing obligation was agreed by the shareholders. According to the
new donation, Novo Nordisk is obliged to make annual donations to the
Foundation of 0.01% in the period 2008 –2010 and 0.125% in the period
2011–2017 of the net insulin sales of the Group in the preceding financial
year.
However, annual donations for 2010 shall not exceed the lower of
DKK 70 million or 15% of the taxable income of Novo Nordisk A/S and from
the period 2011–2017 the lower of DKK 80 million or 15% of the taxable
income of Novo Nordisk A/S in the financial year in question.
The donation of DKK 68 million in 2009 is recognised in the Income state-
ment.
84 Novo Nordisk Annual Report 2009
Pending claims against Novo Nordisk and investigations
involving Novo Nordisk
In December 2005, the office of the US Attorney for the Eastern District of
New York served Novo Nordisk with a subpoena calling for the production
of documents relating to Novo Nordisk’s US marketing and promotional
practices. Novo Nordisk assess that the investigation is limited to its insulin
products. The subpoena indicates that the documents are necessary for the
investigation of potential criminal offences relating to healthcare benefit
programmes. Novo Nordisk is cooperating with the US Attorney in this
investigation. At this point in time, Novo Nordisk cannot determine or pre-
dict the outcome of the investigation. In addition, Novo Nordisk cannot
predict how long the investigation will take or when the company will be
able to provide additional information.
In May 2009 Novo Nordisk entered into a Deferred Prosecution Agree -
ment (DPA) for a three year period with the US Department of Justice
relating to certain actions undertaken by Novo Nordisk under the Iraq Oil
for Food Programme. Under the terms of the DPA Novo Nordisk must
comply with the DPA (including US regulation related to the Foreign Cor -
rupt Practices Act and Foreign Assets Control) in order for the case to be
dismissed. If Novo Nordisk breaches the DPA, the prosecution may resume.
In light of the DPA, Novo Nordisk has identified potential breaches of US
Foreign Assets Control regulations. An investigation has been initiated in
order to assess the significance and potential future implications.
In January 2010, the Inspector General of the US Department of Defense
issued a subpoena directed to Novo Nordisk to provide documents relating
to NovoSeven ®. Novo Nordisk is cooperating with the Office of the
Inspector General and the US Attorney’s Office for the District of Maryland
in respond ing to the subpoena, but cannot, at this point of time, determine
or predict the outcome of the investigation or when the next update
related to this case will be available given the unpredictable nature of these
investigations.
In addition to the above, the Novo Nordisk Group is engaged in various on-
going tax audits and investigations. In the opinion of management, these
pending audits and investigations are not expected to have a material effect
on Novo Nordisk’s financial position, operating profit or cash flow.
Liability for the debts and obligations of Novozymes following
the demerger of Novozymes in 2000
Novo Nordisk A/S and Novozymes A/S are subject to joint and several
liabilities for any obligation which existed at the time of the announcement
of the demerger in 2000. At the end of the year the remaining part of the
joint and several liabilities in Novozymes A/S amounted to DKK 557 million
(DKK 557 million in 2008).
Debts and obligations pertaining to the period before 1 January 2000,
which are recognised after 1 January 2000 and which cannot be clearly
attributed to either Novo Nordisk A/S or Novozymes A/S, will be distributed
proportionally between the two companies according to an agreement
established in connection with the demerger in November 2000.
Disclosure regarding Change of Control
The EU Takeover Bids Directive, as partially implemented by the Danish
Financial Statements Act, contains certain rules relating to listed companies
on dis closure of information that may be of interest to the market and
potential take-over bidders, in particular in relation to disclosure of change
of control provisions.
For information on the ownership structure of Novo Nordisk, please see
Shares and capital structure on pp 47– 49. For information on change of
control clauses in share option programmes, please see note 29 ‘Share-
based payment schemes’ on pp 76 –77, and in relation to employee
contracts of Executive Management of Novo Nordisk, please see ‘Executive
remuneration’ on p 40.
In addition, Novo Nordisk discloses that the Company has significant agree-
ments to which the Company is a party and which take effect, alter or
terminate upon a change of control of the Company following implementa-
tion of a take-over bid. If effected, a takeover could – at the discretion of
each relevant counterparty – lead to the termination of one or more of such
agreements and a total loss of approximately 5% of Novo Nordisk’s sales,
corresponding to approximately 5% of Novo Nordisk‘s gross profit.
33 Related party transactions
Novo Nordisk A/S is controlled by Novo A/S (incorporated in Denmark),
which owns 25.5% of the shares in Novo Nordisk A/S. The remaining shares
are widely held. The ultimate parent of the Group is the Novo Nordisk
Foundation (incorporated in Denmark). Both entities are considered related
parties.
Other related parties are considered to be the Novozymes Group due to
joint ownership, associated companies, the directors and officers of these
entities and management of Novo Nordisk A/S. Following the demerger
of Novozymes in November 2000, Novo Nordisk A/S has access to certain
assets of and may purchase certain services from Novo A/S and the
Novozymes Group, and vice versa. All agreements relating to such assets
and services are based on the list prices used for sales to third parties where
such list prices exist, or the price has been set at what is regarded as market
price. Most of these agreements cover one year.
The Group has had the following material transactions with related parties:
DKK million
2009
2008
2007
Novo Nordisk Foundation
Donations to Novo Nordisk
Novo A/S
Services provided by Novo Nordisk
Purchase of Novo Nordisk B shares
Sale of treasury shares
(related to share options)
Novozymes
Services provided by Novo Nordisk
Services provided by Novozymes
Associated companies
Purchased intangible assets, fees
and royalties etc paid to associated
companies by Novo Nordisk
Received intangible assets, fees
and royalties etc from associated
companies to Novo Nordisk
(32)
(29)
(30)
(8)
1,111
(2)
(6)
1,016
(7)
2,090
(9)
(8)
(357)
118
(284)
147
(253)
159
184
40
–
(12)
63
–
There have not been any material transactions with any director or officer
of Novo Nordisk, Novozymes, Novo A/S, the Novo Nordisk Founda tion
or associated companies. For information on remuneration to the manage-
ment of Novo Nordisk, please refer to note 30.
There are no material un settled transactions with related parties at the end
of the year.
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Novo Nordisk Annual Report 2009 85
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34 Companies in the Novo Nordisk Group
Country
Year of
incorporation /
acquisition
Issued share capital /
paid-in capital
Percentage
of shares
owned
Activity
l
t
n
e
m
p
o
e
v
e
d
d
n
a
h
c
r
a
e
s
e
R
•
s
t
n
e
m
t
s
e
v
n
I
/
s
e
c
i
v
r
e
S
•
g
n
i
t
e
k
r
a
m
d
n
a
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s
e
a
S
•
n
o
i
t
c
u
d
o
r
P
•
Parent company
Novo Nordisk A/S
Subsidiaries by region
Denmark
1931
DKK
620,000,000
–
•
•
•
•
Europe
Novo Nordisk Pharma GmbH
SA Novo Nordisk Pharma NV
Novo Nordisk Pharma d.o.o.
Novo Nordisk Pharma EAD
Novo Nordisk Hrvatska d.o.o.
Novo Nordisk s.r.o.
Novo Nordisk Region Europe A/S
Novo Nordisk Farma OY
Novo Nordisk Pharmaceutique SAS
Novo Nordisk Production SAS
Novo Nordisk Pharma GmbH
Novo Nordisk Hellas Epe
Novo Nordisk Hungary Sales and Trading Ltd.
Novo Nordisk Limited
Novo Nordisk Farmaceutici S.P.A.
UAB Novo Nordisk Pharma
Novo Nordisk Farma dooel
Novo Nordisk B.V.
Novo Nordisk Scandinavia AS
Novo Nordisk Pharma Sp. z.o.o.
Novo Nordisk Comércio Produtos Farmace˜ uticos
Limitada
Novo Nordisk Farma S.R.L.
Novo Nordisk Pharma d.o.o. Belgrade (Serbia)
Novo Nordisk Slovakia s.r.o.
Novo Nordisk, trzˇenje farmacevtskih izdelkov d.o.o.
Novo Nordisk Pharma S.A.
Novo Nordisk Scandinavia AB
Novo Nordisk FemCare AG
Novo Nordisk Health Care AG
Novo Nordisk Pharma AG
Novo Nordisk Holding Limited
Novo Nordisk Limited
1974
Austria
Belgium
1974
Bosnia and Herzegovina 2009
2005
Bulgaria
2004
Croatia
1997
Czech Republic
2002
Denmark
1972
Finland
2003
France
1959
France
1973
Germany
1979
Greece
1996
Hungary
1978
Ireland
1980
Italy
2005
Lithuania
2006
Macedonia
1983
Netherlands
1965
Norway
1996
Poland
1984
Portugal
Romania
2005
Serbia and Montenegro 2005
2007
Slovakia
2006
Slovenia
1978
Spain
1971
Sweden
2003
Switzerland
2000
Switzerland
1968
Switzerland
1977
United Kingdom
1978
United Kingdom
North America
Novo Nordisk Canada Inc.
Novo Nordisk Region North America A/S
Novo Nordisk US Holdings Inc.
Novo Nordisk Pharmaceutical Industries Inc.
Novo Nordisk Inc.
Japan & Oceania
Novo Nordisk Pharmaceuticals Pty. Ltd.
Novo Nordisk Region Japan & Oceania A/S
Novo Nordisk Pharma Ltd.
Novo Nordisk Pharmaceuticals Limited
Canada
Denmark
United States
United States
United States
Australia
Denmark
Japan
New Zealand
1983
2003
2007
1991
1982
1985
2002
1980
1990
EUR
EUR
BAM
BGN
HRK
CZK
DKK
EUR
EUR
EUR
EUR
EUR
HUF
EUR
EUR
LTL
MKD
EUR
NOK
PLN
EUR
RON
EUR
EUR
EUR
EUR
SEK
CHF
CHF
CHF
GBP
GBP
CAD
DKK
USD
USD
USD
36,336
69,000
97,792
5,880,000
5,000,000
14,500,000
108,370,500
420,500
5,821,140
57,710,220
614,062
1,050,000
371,000,000
635
516,500
2,150,000
14,068,285
61,155
250,000
29,021,000
250,000
2,795,000
640,000
265,552
2,679,286
1,502,500
100,000
1,100,000
159,325,000
50,000
2,802,132
2,350,000
200
500,000
50,000
55,000,000
283,837,600
AUD
DKK
JPY
NZD
500,001
15,500,000
2,104,000,000
1,000,000
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
86 Novo Nordisk Annual Report 2009
34 Companies in the Novo Nordisk Group (continued)
Country
Year of
incorporation /
acquisition
Issued share capital /
paid-in capital
Percentage
of shares
owned
1994
1997
2007
2002
1990
2006
1994
Algeria
Argentina
Bangladesh
Brazil
Brazil
Chile
China
International Operations
Aldaph SpA
Novo Nordisk Pharma Argentina S.A.
Novo Nordisk Pharma (Private) Limited
Novo Nordisk Produção Farmacêutica do Brasil Ltda.
Novo Nordisk Farmacêutica do Brasil Ltda.
Novo Nordisk Farmacêutica Limitada
Novo Nordisk (China) Pharmaceuticals Co., Ltd.
Beijing Novo Nordisk Pharmaceuticals Science &
Technology Co., Ltd.
Novo Nordisk Pharma Operations A/S
Novo Nordisk Region International Operations A/S
Novo Nordisk Egypt Pharmaceuticals Ltd.
Novo Nordisk Hong Kong Limited
Novo Nordisk India Private Limited
PT. Novo Nordisk Indonesia
Novo Nordisk Pars
Novo Nordisk Ltd
Novo Nordisk Pharma s.a.r.l
Novo Nordisk Pharma (Malaysia) Sdn Bhd
Novo Nordisk Mexico S.A. de C.V.
Novo Nordisk Pharma SAS
Novo Nordisk Pharma Limited
Novo Nordisk Pharma (Private) Limited
Novo Nordisk Pharmaceuticals (Philippines) Inc
Novo Nordisk Limited Liability Company
Novo Investment Pte Ltd.
Novo Nordisk Pharma (Singapore) Pte Ltd.
Novo Nordisk (Pty) Ltd
Novo Nordisk Pharma Korea Ltd
Novo Nordisk Pharma (Taiwan) Ltd
Novo Nordisk Pharma (Thailand) Ltd.
Novo Nordisk Tunisie SARL
Novo Nordisk Saglik Ürünleri Tic. Ltd. Sti.
Novo Nordisk Pharma Gulf FZ-LLC
Novo Nordisk Venezuela Casa de Representación C.A. Venezuela
2006
China
2009
Denmark
2002
Denmark
2004
Egypt
2001
Hong Kong
1994
India
2003
Indonesia
2005
Iran
1997
Israel
2007
Lebanon
1992
Malaysia
2004
Mexico
2006
Morocco
2006
Nigeria
2005
Pakistan
1999
Philippines
2003
Russia
1994
Singapore
1997
Singapore
1959
South Africa
1994
South Korea
1990
Taiwan
1983
Thailand
2004
Tunisia
Turkey
1993
United Arab Emirates 2005
2004
Other subsidiaries
FeF Chemicals A/S
NNIT A/S *)
NNE Pharmaplan A/S *)
Steno Diabetes Center A/S
Associated companies
Harno Invest A/S
Innate Pharma S.A.
ZymoGenetics, Inc.
Denmark
Denmark
Denmark
Denmark
Denmark
France
United States
1989
1998
1989
2008
1992
2006
1988
*) In addition to the listed companies, NNIT A/S and NNE Pharmaplan A/S have their own subsidiaries.
DZD
ARS
BDT
BRL
BRL
CLP
USD
1,742,650,000
7,465,150
17,500,000
896,834,727
84,727,136
758,271,200
289,124,617
2,000,000
USD
500,000
DKK
113,303,210
DKK
50,000
EGP
500,000
HKD
265,000,000
INR
827,900,000
IDR
10,000,000
IRR
100
ILS
600,000,000
LBP
200,000
MYR
387,816,547
MXN
2,597,000
MAD
10,000,000
NGN
43,000,000
PKR
50,000,000
PHP
188,243,360
RUB
12,000,000
SGD
200,000
SGD
ZAR
8,000
KRW 6,108,400,000
TWD
9,000,000
15,500,000
THB
TND
400,000
25,296,300
TRY
100,000
AED
2,250,000
VEF
DKK
DKK
DKK
DKK
DKK
EUR
USD
10,000,000
1,000,000
500,000
1,000,000
70,419,910
1,295,600
797,623,000
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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100
100
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100
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Novo Nordisk Annual Report 2009 87
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Financial definitions
ADRs
An American Depositary Receipt (or ADR) represents ownership in the
shares of a non-US company and trades in US financial markets.
Gross margin
Gross profit as a percentage of sales.
Net profit margin
Net profit as a percentage of sales.
Basic earnings per share (EPS)
Net profit divided by the average number of shares outstanding.
Number of shares outstanding
The total number of shares excluding the holding of treasury shares.
Cash to earnings
Free cash flow as a percentage of net profit.
Diluted earnings per share
Net profit divided by the sum of average number of shares outstanding
including the dilutive effect of share options ‘in the money’. The dilutive
effect of share options ‘in the money’ is calculated as the difference
between the following:
1) the number of shares that could have been acquired at fair value with
proceeds from the exercise of the share options, and
2) the number of shares that would have been issued assuming the exercise
of the share options.
The difference (the dilutive effect) is added to the denominator as an issue
of shares for no consideration.
Operating profit
Earnings before tax, financial income and expenses (net) and share of
profit/loss in associated companies.
Operating profit margin
Operating profit as a percentage of sales.
Other comprehensive income
Other comprehensive income comprises all non-owner changes eg items
of income and expense (including reclassification adjustments) that are not
recognised in the Income statement.
Payout ratio
Total dividends for the year as a percentage of net profit.
Effective tax rate
Income taxes as a percentage of profit before income taxes.
Return on equity
Net profit for the year as a percentage of shareholders’ equity (average).
Equity ratio
Equity at year-end as a percentage of the sum of total liabilities and equity
at year-end.
Free cash flow
The sum of cash flow from operating activities and cash flow from investing
activities excluding net changes in marketable securities (maturity exceeding
three months).
ROIC (return on invested capital)
Operating profit after tax (using the effective tax rate) as a percentage of
average inventories, receivables, property, plant and equipment as well as
intangible assets less non-interest-bearing liabilities including provisions
(the sum of the above assets and liabilities at the beginning of the year and
at year-end divided by two).
88 Novo Nordisk Annual Report 2009
Statement of non-financial reporting for the year ended 31 December
Note
2009
2008
2007
Social performance
Employees (total)
Employee turnover (%)
Absence (%)
Frequency of occupational injuries (number/million working hours)
Annual training costs per employee (DKK)
Engaging culture (employee engagement) on a scale of 1–5
Diverse senior management teams
Managers trained in business ethics (%)
Fulfilment of action points from facilitations of the NNWoM (%)
LDCs where Novo Nordisk sells insulin according to the differential pricing policy
Healthcare professionals trained or educated in diabetes (1,000)
People with diabetes trained (1,000)
Company reputation with external key stakeholders on a scale of 0 –100
People participating in clinical trials
Animals purchased
Active patent families to date
New patent families (first filings)
Warning letters and re-inspections
Employment impact worldwide (direct and indirect)
R&D costs as share of sales
Environmental performance
Energy consumption (1,000 GJ)
Water consumption (1,000 m3)
Raw materials and packaging materials (1,000 tons)
Volume of wastewater (1,000 m3)
COD **) (tons) in wastewater
Total waste (tons)
Non-hazardous waste (% of total waste)
CO2 emissions from energy consumption (1,000 tons)
CO2 emissions from cooling agents (1,000 tons)
CO2 emissions from energy consumption as share of sales in DKK
(index 2003 = 100)
Breaches of regulatory limit values
*) See change in accounting policies. Hence the data is not comparable year on year.
**) Chemical oxygen demand, which is a method to measure the amount of pollutants in the water.
2
2
5
5
2
2
2
3
4
6
6
6
7
8
9
14
14
10
15
15
11
12
13
16
16
17
17
18
18
18
19
29,329
8.3
2.6
4.3
13,283
4.3
14
91
93
27,068
12.1
2.2
5.4
13,192
4.2
12
–
92
26,008
11.6
2.7
5.9
13,130
4.1
–
–
91
36
805
416 *)
32
380
1,755 *)
36
336
422 *)
76.3
11,130
57,315
905
55
0
96,500
15.4
2,246
2,149
79
2,062
617
21,019
64
146
5.8
37
10
72.4
74.0
13,822
57,253
890
71
0
88,500
16.5
2,533
2,684
132
2,542
891
20,346
70
215
–
60
28
11,915
54,675
1,003
116
0
81,600
17.2
2,784
3,231
152
2,764
813
17,576
66
236
–
72
22
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Novo Nordisk Annual Report 2009 89
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1 Summary of non-financial accounting policies
For more information on Novo Nordisk’s voluntary reporting, see
annualreport2009.novonordisk.com.
The accounting policies applied to the preparation of the consolidated non-
financial reporting have been consistently applied to the years presented,
except as described below in ‘Change in non-financial accounting policies’.
Standards for non-financial reporting
The consolidated non-financial statement is prepared in accordance with
the Danish Financial Statements Act, section 99a, effective as of 1 January
2009. Section 99a requires Novo Nordisk to account for the company’s
activities on social responsibility, reporting on business strategies and
activities on human rights, labour standards, environment and anti-corrup-
tion. Companies that subscribe to the UN Global Compact and annually
submit their Communication on Progress (CoP) will be in compliance with
the new legislation, provided that the annual report includes a reference to
where the CoP has been made publicly available. Novo Nordisk’s CoP 2009
can be found at annualreport2009.novonordisk.com/governance-and-re-
porting/un-global-compact.aspx and at UN Global Compact’s website at un-
globalcompact.org/COP.
Novo Nordisk adheres to the following internationally acknowledged
voluntary standards and principles:
• AA1000 framework for accountability. The framework states that report-
ing must provide a complete, accurate, relevant and balanced picture
of the organisation’s approach to and impact on society. Novo Nordisk’s
assurance process is designed according to AA1000AS(2008).
• Global Compact. As a signatory to the United Nations Global Compact, a
platform to promote good corporate principles and learning in the areas
of human rights, labour, environment and anti-corruption, Novo Nordisk
reports on actions during 2009 to implement the 10 principles in the CoP,
which can be found at annualreport2009.novonordisk.com/governance-
and-reporting/un-global-compact.aspx.
• Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines
(G3). The guidelines include the only internationally recognised set
of indicators for economic, environmental and social aspects of business
performance, which enable stakeholders to compare companies’ per-
formance. Novo Nordisk’s reporting according to the reporting principles
and guidance including required disclosures can be found at
annualreport2009.novonordisk.com/governance-and-reporting/global-re-
porting-initiative.aspx.
Defining materiality
Ongoing stakeholder engagement and trendspotting help identify new
issues that are or could become material to Novo Nordisk. Following a
review of the implications for Novo Nordisk’s long-term business, a strategy
is framed for those issues that are deemed material and subsequently data,
indicators and targets are identified. Management of the issue is embedded
in the organisation, so that it eventually becomes fully integrated into
business processes. The process is iterative as strategies are revisited as
appropriate.
It is Novo Nordisk’s responsibility to ensure that those areas are addressed
in which the company has significant impact or where it has a responsibility
and ability to act. Novo Nordisk has sought inspiration in AccountAbility’s
materiality test to define what is material to Novo Nordisk’s business, what
should be included in the annual report and on which grounds. Applying
the materiality test as a tool, sustainability-related issues are prioritised to
be reported either in the printed annual report (most material; business
critical), online (material, often to cater for specific stakeholder interests) or
not reported (not material). The same process applies for the assurance
provider’s recommendations.
The outcomes of formal reviews, research, stakeholder engagement and
internal materiality discussions are presented as a proposal for the annual
reporting to Executive Management and the Board of Directors, and sub -
sequently approved. In addition, Novo Nordisk’s external assurance provider
is requested to assure whether the non-financial performance included
in the annual report covers the material aspects. The conclusion is available
in the Independent Assurance Report on non-financial reporting 2009.
Change in non-financial accounting policies
In 2009, there were no significant changes to the accounting policies for
non-financial data.
The following accounting policies have been adjusted:
• The accounting policy for ‘Fulfilment of action points from facilitations
of the NNWoM’ has been adjusted to reflect how it is reported internally
to Executive Management. Data reported for 2005 –2008 reflects the
adjusted accounting policy.
• The accounting policy for ‘People with diabetes trained or treated’ has
previously been reported as an accumulated number but will from this
year on be reported as the actual number of people with diabetes trained
or treated within the given year. This adjustment is reflected in the data
reported for 2007–2008. Further, it has been specified that people with
diabetes who have been offered training as part of their treatment are not
included, as this is not a direct Novo Nordisk activity. This year and going
forward reporting on these activities will therefore be defined as ‘People
with diabetes trained’. This adjustment is not reflected in the 2007–2008
data as it is not possible to separate the ‘trained’ and ‘treated’ in the
historical data.
Please refer to the specific accounting policies for further information.
The non-financial statement has been reviewed and new disclosures added
to reflect current priorities and enhance transparency:
• Diverse senior management teams
• Managers trained in business ethics
• People participating in clinical trials
• Volume of wastewater
• Non-hazardous waste (% of total waste)
• CO2 emissions from cooling agents.
The review process also resulted in a decision to discontinue reporting on
the following disclosures in the statement:
• Opportunity to use and develop competences/skills
• People from diverse backgrounds have equal opportunities
• Employees in sales & marketing trained in business ethics
• R&D expenditure to tangible investments
• Total corporate tax as share of sales
• Novo Nordisk exports as share of Danish exports
• Nitrogen (wastewater)
• Phosphorus (wastewater)
• Organic solvents
• EIR Water
• EIR Energy
• Number of accidental releases.
The above measures are not used to drive performance, and hence do not
qualify for inclusion as performance indicators.
The review process furthermore resulted in a decision to only report the
following disclosures in the notes instead:
• Fatalities due to occupational injuries
• Importance of social and environmental issues for the future of the
company
• Manager’s behaviour consistent with Novo Nordisk’s values
• LDCs where Novo Nordisk operates
• Recycling percentage (waste)
Principles of non-financial disclosures
The non-financial statement and disclosures cover Novo Nordisk A/S (the
Parent company) and all the companies in which Novo Nordisk A/S directly
or indirectly owns more than 50% of the voting rights or in some other
way has a controlling influence (subsidiaries). Novo Nordisk A/S and these
companies are referred to as the Group.
The environmental disclosures cover the significant environmental impact
90 Novo Nordisk Annual Report 2009
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from the Novo Nordisk Group’s production sites producing approved
pro ducts for the market – 14 in total.
The employee engagement is a simple average of answers given by
the employees. The 10 questions are the same as in the previous years.
Accounting policies
To Novo Nordisk, AA1000APS(2008) is an essential component in creating a
generally applicable approach to assessing and strengthening the credibility
of the company’s public reporting of non-financial data. Novo Nordisk’s
assurance process has been designed to ensure that the qualitative and
quantitative information that documents sustainability performance as well
as the systems that underpin the data and performance are assured. The
principles outlined by AA1000APS(2008) have been applied as described
below.
1. Inclusivity
As a pharmaceutical company with global reach, Novo Nordisk is committed
to being accountable to those on whom the organisation has an impact
and those who have an impact on Novo Nordisk. Novo Nordisk continuously
maps its stakeholders and has processes in place to ensure inclusion of
stakeholder concerns and expectations. Stakeholder engagement results in
stakeholders being involved in developing and accounting for strategic
responses to sustainability challenges.
2. Materiality
Key issues are identified through ongoing stakeholder engagement and
addressed by programmes or action plans with clear and measurable
targets. Stretch targets are set to guide the long-term efforts in strategic
areas, such as climate action. The issues pre sented in the annual report are
deemed to have a significant impact on the company’s future business
performance and may support stakeholders in their decision- making and
are therefore regarded as Novo Nordisk’s material issues.
3. Responsiveness
The report reaches out to a wide range of stakeholders, each with their
specific needs and interests. To most stakeholders, however, the annual
report is just one element of interaction and communication with the com-
pany. The annual report reflects how the company has addressed stake -
holder concerns and interests in dealing with the dilemmas and issues.
Stakeholder dialogue is an invaluable part of Novo Nordisk’s efforts as a
responsible business, and readers are encouraged to give their feedback.
This is the first year in which Novo Nordisk is reporting according to the
AA1000APS(2008) and the assurance process has been carried out
according to AA1000AS(2008). The new framework has not affected Novo
Nordisk’s approach to sustainability and stakeholder engagement.
Social performance
Employees
The number of employees at year-end includes all employees except
externals, employees on unpaid leave, interns, bachelor and master thesis
employees and substitutes. The number of fulltime employees (FTEs), is
defined as employees with a working time ratio of 95% or more.
Employee turnover
The rate of turnover is calculated as the number of employees, excluding
temporary employees, who left the Novo Nordisk Group during the financial
year compared to the average number of employees, excluding temporary
employees.
Absence
The rate of absence is calculated as absence due to the employee’s own
illness, pregnancy-related sick leave and occupational injuries and illnesses
per total average working hours in the year, adjusted for holidays.
Frequency of occupational injuries
The frequency of occupational injuries is calculated based on the number
of injuries reported for all employees per million working hours, excluding
externals, employees on unpaid leave, interns, bachelor and master thesis
employees and substitutes. An occupational injury is any work-related injury
causing at least one day of absence in addition to the day of the injury.
Annual training costs per employee
The annual training costs cover the internal and external training costs
recorded directly linked to training. Costs related to on-the-job training,
internal seminars and other activities are not included in the amount.
Engaging culture (employee engagement)
The employee engagement is measured on a scale of 1– 5, with 5 being the
best, and is an average of respondents’ answers to 10 selected questions
related to employees’ engagement in the annual employee survey, eVoice.
Diverse senior management teams
The number of diverse senior management teams is measured as the
number of teams diverse in gender and nationality (locals and non-locals).
A senior management team is defined as being diverse when it has people
of both genders and includes both locals and non-locals.
Managers trained in business ethics
Managers trained in business ethics is based on registrations in a training
database. It is measured as the percentage of managers completing business
ethics e-learning.
Fulfilment of action points from facilitations of the NNWoM
The percentage of fulfilment of actions points arising from facilitations with
respect to the Novo Nordisk Way of Management (NNWoM) is measured as
an average of timely closure of action points issued in the current year and
the two previous years. The reason for using a three-year average as basis
for the calculation is that action lead time varies from typically a couple of
months to more than a year.
Least Developed Countries where Novo Nordisk sells insulin
according to the differential pricing policy
Least Developed Countries where Novo Nordisk sells insulin according to
the differential pricing policy is measured as direct or indirect sales by Novo
Nordisk via government tender or private market sales to wholesalers,
distributors, NGOs etc.
Healthcare professionals trained or educated in diabetes
The estimated number of healthcare professionals (HCPs) trained or edu -
cated in diabetes includes HCPs directly trained, educated, interacted with
or reached through awareness campaigns. The estimated number is based
on registrations by subsidiaries and corporate functions in Novo Nordisk.
The number covers the total number of HCPs Novo Nordisk has engaged
with since the National Changing Diabetes ® programmes were initiated in
2002.
People with diabetes trained
People with diabetes trained is measured as the total number of people with
diabetes with whom Novo Nordisk has engaged during the year for educa-
tional purposes. Training denotes activities conducted, organised or funded
by Novo Nordisk and only relates to activities, that are non-product branded
for at least 50% of the time.
Company reputation
Company reputation is measured as a mean brand score in four key
markets (China, Germany, the UK and the US) according to primary care
and secondary care physicians. The survey is performed by an independent
external con sultancy firm. The mean brand score is based on company
ratings (scale of 0 –100). For 2007 and 2008, the survey was conducted via
telephone and face-to-face interviews with primary and secondary care
professionals (target groups). For 2009, the survey was conducted via online
interviews except for China (face-to-face interviews).
People participating in clinical trials
The number of people participating in clinical trials (phases 1–3) is measured
as active participants in clinical trials during the year.
Animals purchased
The number of animals purchased is measured as animals in all studies
performed by Novo Nordisk either in-house or at external contractors.
Active patent families to date
Active patent families to date is measured as the sum of all active patents in
Novo Nordisk.
New patent families (first filing)
First filing is measured as all new patents that were approved within the
year.
Warning letters and re-inspections
Warning letters and re-inspections are measured as the number of warning
letters issued by the FDA in connection with GMP, GCP or GLP inspections,
and the number of re-inspections issued to Novo Nordisk by any health
Novo Nordisk Annual Report 2009 91
authority globally. Warning letters from the FDA regarding promotional
materials are not included.
2 Employee statistics
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Employment impact worldwide (direct and indirect)
Employment impact worldwide is an estimate of the direct and indirect jobs
created by the Novo Nordisk Group. It is calculated using financial records
and general statistics from public sources, such as Statistics Denmark, Up -
dated Economic Multipliers for the US Economy (Economic Policy Institute)
and China Statistical Yearbook.
R&D expenditure as share of sales
R&D expenditure as share of sales is calculated based on data from Novo
Nordisk’s consolidated financial statements.
Environmental performance
Energy consumption
Energy consumption (direct and indirect supply) includes both direct supply
of energy (internally produced energy), ie natural gas, fuel oil and other
types, and indirect supply of external energy (externally produced energy),
for example electricity, steam and district heat. The consumption of fuel and
externally produced energy is based on meter readings and invoices.
Water consumption
Water consumption is based on meter readings and invoices and includes
consumption of drinking water, industrial water and steam.
Raw materials and packaging materials
Raw materials and packaging materials comprise materials for production
and related processes and packaging of products. The consumption of raw
materials and packaging is converted to tons. Data is based on registrations
in Novo Nordisk’s stock system.
Volume of wastewater
The volume of wastewater comprises process wastewater and sanitary
wastewater. Furthermore, drainage water from fortified areas is included.
The total volume of wastewater is calculated based on input from the
production sites either directly measuring the total sum of discharge to
public sewer systems or by the total water consumption for the site minus
registered evaporation from cooling systems (including cooling towers
and other plants from which evaporation occurs), and any large amount of
wastewater collected and treated as waste.
COD in wastewater
The quantity of COD is calculated based on in-house test results or standard
factors.
Total waste
Total waste is measured as the sum of non-hazardous and hazardous waste.
The amount of waste disposed of is registered based on weight receipts.
Non-hazardous waste
The percentage is calculated as the waste disposed of as non-hazardous of
the total amount of waste disposed.
CO2 emissions from energy consumption
CO2 emissions from energy consumption are calculated according to the
GHG protocol. Emissions of CO2 from energy (total) are based on standard
factors for fuel and for energy on a three-year average of available emission
factors from the external suppliers of energy. Hence, emission factors for
2009 are the three-year average of 2006 to 2008.
CO2 emissions from cooling agents
CO2 emissions from cooling agents are calculated based on standard
factors.
CO2 emissions from energy consumption as share of sales
CO2 emissions from energy consumption as share of sales is calculated as an
index using 2003 as baseline (index 100).
Breaches of regulatory limit values
Breaches of regulatory limit values are measured as all breaches reported to
the authorities.
Number
Employees by gender
– Female
– Male
Total
2009
2008
2007
14,514
14,815
29,329
13,432
13,636
12,845
13,163
27,068
26,008
Fulltime employees (FTEs)
28,809
26,575
25,516
The increase of 2,261 (8%) employees in 2009 from 1,060 (4%) in 2008
is as expected and reflects increased activities in most of the business areas
and in particular in sales & marketing and R&D. In the regions the largest
increase in employees is seen in Europe and International Operations.
The rate of employee turnover decreased from 12.1% in 2008 to 8.3% in
2009. This decrease can be attributed to the general economic recession
and the continuous focus on employee retention within Novo Nordisk.
The annual training costs per employee stayed consistent, with a spend of
DKK 13,283 in 2009 compared to DKK 13,192 in 2008.
In the annual eVoice survey the response rate was 92%. The engagement
rate increased from 4.2 in 2008 to 4.3 in 2009. Below are additional key
questions and scores from the eVoice survey, which reconfirm the strong
adherence to the company’s values and priorities.
Living our values
Scale 1– 5
2009
2008
2007
Importance of social and environmental
issues for the future of the company
Manager’s behaviour consistent with
Novo Nordisk’s values
4.5
4.4
4.5
4.3
4.4
4.2
The number of diverse senior management teams increased from 12 in
2008 to 14, which means that at year-end 2009 50% of all the 28 senior
management teams are diverse in terms of gender and nationality. The
development is as expected.
3 Managers trained in business ethics
In 2009, 91% of all managers were trained in business ethics via e-learning.
This training has been conducted in the previous years but not systematically
recorded.
Besides e-learning, first-line sales managers in sales and marketing are
trained face-to-face in business ethics. As above, the face-to-face training
has been conducted in previous years but has not been systematically
recorded. In 2009, 99% of all first line sales managers were trained in
business ethics.
4 Fulfilment of action points from facilitations
of the NNWoM
In 2009, 93% of all actions points, based on a three-year average, were
timely closed. This is a slight improvement compared to 2008, when 92%
of all action points were timely closed. At year-end, three actions were in
status ‘overdue’. Action plans have been agreed between the units and the
facilitators to ensure closure of these actions.
92 Novo Nordisk Annual Report 2009
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5 Health and safety
8 People participating in clinical trials
In 2009, there were no fatal occupational injuries and Novo Nordisk has not
had any fatal occupational injuries since 2004.
The rate of absence increased slightly in 2009 to 2.6% from 2.2% in
2008. The development is due to increased absence related to illness. The
frequency of occupational injuries decreased by 1.1 from 5.4 in 2008 to
4.3 in 2009. The decrease is attributed to the continuous focus on health
and safety.
In 2009, implementation of Novo Nordisk’s occupational health & safety
management system continued. The management system is certifiable
according to OHSAS 18001. All sites in Denmark have implemented the
system, and Product Supply globally is certified.
The next step in the roll-out is R&D outside Denmark. R&D units in the US
and China will implement the occupational health & safety management
system.
The number of people participating in clinical interventional trials decreased
by 20% from 13,822 in 2008 to 11,130 in 2009. This was mainly due to the
discontinuation of the pulmonary diabetes project in 2008 and also post-
ponement of the initiation of the remaining part of the liraglutide obesity
phase 3 programme.
9 Animals purchased
Novo Nordisk sets goals to reduce, refine and replace experiments on
animals and to improve animal welfare. Despite a significantly higher level
of research activity in early phases, when animal experimentation is
required, the number of animals purchased in 2009 increased only slightly
to 57,315 animals, of which 96% were rodents. In 2009, the majority of the
animals were housed in Denmark. However, for the first time, ever in-house
studies were performed outside Denmark as the animal facility at NNST,
Beijing, China, opened and in 2009 housed a small number of mice.
6 Access to health
Novo Nordisk has formulated a differential pricing policy offering insulin to
the world’s Least Developed Countries (LDCs) at or below a price of 20%
of the average prices for insulin in the Western world. The Western world is
defined as Europe (EU, Switzerland and Norway), the US, Canada and
Japan.
In 2009, Novo Nordisk operated in 37 of the 49 LDCs. For 2009, the dif -
ferential pricing policy was offered, as part of the global health initiatives,
to all LDCs as defined by the United Nations. During 2009, Novo Nordisk
sold insulin to either governments or to the private market in a total of
36 countries according to the differential pricing policy compared to 32 in
2008. In Nepal the public authorities have been offered the opportunity
to buy insulin at the policy price, but in 2009 the insulin was sold to the
private market without using the policy price.
In 12 countries Novo Nordisk does not sell insulin at all, for various reasons.
In several cases, either the government has not responded to the offer, there
are no private wholesalers or other partners with whom to work, or wars or
political unrest make it impossible to do business. While Novo Nordisk
prefers to sell insulin at the differential price through government tenders,
the company is willing to sell to private distributors and agents. Novo
Nordisk has no way of guaranteeing that the price at which Novo Nordisk
sells the insulin will be reflected in the final price to the consumer.
A measure of the company’s contribution to global health is the number of
healthcare professionals directly trained, educated, interacted with or
reached through awareness campaigns and the number of people with
diabetes targeted with training or awareness. The aim is to continue
activities for educating healthcare professionals and to train people with
diabetes.
Since 2002, 805,000 healthcare professionals have been trained, educated,
interacted with or reached through awareness campaigns. The increase in
numbers is due to more activities reaching a greater number of healthcare
professionals and more diligent reporting from affiliates. The number of
people with diabetes trained was 416,000 in 2009. As reporting this year
does not include people treated, the 2009 number is not comparable to the
2007–2008 numbers.
7 Company reputation
Company reputation, measured as the mean brand score, increased by 3.9
points from 72.4 in 2008 to 76.3 (on a scale of 0 –100) in 2009. The positive
development can be attributed to a wide range of activities focusing on the
product portfolio and on clinical trials, educational activities and involve-
ment in the diabetes community.
Number
Mice and rats
Guinea pigs
Hamsters
Rabbits
Pigs
Dogs
Goats
Non-human primates
Other vertebrates *)
Total
2009
2008
2007
54,714
84
6
559
1,170
240
2
540
0
57,315
54,484
150
16
770
808
276
6
593
150
51,940
290
0
1,029
1,001
62
3
350
0
57,253
54,675
*) Other vertebrates are fish, chickens and frogs.
10 Quality
In 2009, as in 2008, no warning letters were issued to Novo Nordisk by the
FDA in connection with GMP, GCP or GLP inspections. Nor were any re-
inspections issued to Novo Nordisk. In total, 77 inspections were concluded
in 2009 and the number of inspections was as expected.
11 Energy
In 2009, the consumption of energy was 2,246,000 GJ, which is a decrease
of 11% compared to 2,533,000 GJ in 2008. The reduced consumption was
mainly due to optimisations at the insulin bulk production in Kalundborg,
but the cLEAN ® programme and energysaving projects at many other sites
have also contributed to the decrease in consumption.
12 Water
The consumption of water decreased by 20% from 2,684,000 m 3 in 2008
to 2,149,000 m 3 in 2009. The decrease was mainly due to optimisations at
the insulin bulk production in Kalundborg, but the cLEAN ® programme and
water saving projects at several sites have also contributed to the decrease
in consumption.
13 Raw materials and packaging materials
The consumption of raw materials decreased by 40% from 132,000 tons in
2008 to 79,000 tons in 2009. The decrease was mainly due to optimisations
of the insulin bulk production in Kalundborg, but the cLEAN ® programme
has also contributed to the decrease in consumption.
Novo Nordisk Annual Report 2009 93
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14 Patent families
The development in the existing patent families and new patent families (first filing) is as expected. The number of Novo Nordisk patent families increased
from 890 in 2008 to 905 in 2009. The number of new patent families established in 2009 was 55, which is a decrease of 23% compared to the filing activity of
2008, when 71 new patent families were established. This development is explained by changes in the focus areas of research and increased requirements
when filing requires more resources per filing.
The patent expiry dates for the product portfolio are shown in the table below. The dates provided are for expiry of patents in the US, Japan and major
European markets *) on the active ingredient, unless otherwise indicated, and include extensions of patent term (including for paediatric extension where
applicable). In many cases Novo Nordisk has exclusivity beyond the expiry of the active ingredient patent through later-expiring patents. For several products,
in addition to the compound patent, Novo Nordisk holds other patents on manufacturing processes, formulations or uses that may extend exclusivity beyond
the expiration of the product patent. Furthermore, data-based exclusivity may be available under pharmaceutical regulatory laws.
Marketed products in key markets (active ingredients)
Product
Levemir ®
NovoRapid ® (NovoLog ®)
NovoMix ® 30 (NovoLog ® Mix 70/30)
NovoNorm ® (Prandin ®)
Norditropin ® (Norditropin ® SimpleXx ®)
NovoSeven ®
Victoza ®
PrandiMet ®
Major European markets are defined as Germany, France and the UK.
Formulation patent until 2017.
Exact date varies from country to country.
*)
**)
***)
****) Formulation.
*****) Combination.
15 Socioeconomics
Europe
US
Japan
2018
2011 **)
2014 –15 ***)
2009
2017 ****)
2010 –11 ***)
Pending
Pending
2019
2014 **)
2014
Expired
Pending ****)
2010
Pending
Pending
2010 **)
2014
Expired
2017 ****)
Expired
Pending
2018 *****) Pending
In 2009, Novo Nordisk created 2,261 new positions globally and had 28,809 full-time positions measured as full-time equivalents (FTEs) compared to 2008,
when 1,060 new positions were created with 26,575 FTEs. The number of jobs in 2009 translate into 96,500 direct and indirect jobs. Of these, 67,660 indirect
global jobs are created in the supply chain from production needs and employees’ private consumption. The majority of these jobs created are due to
production (47,904) but the effect of private consumption from Novo Nordisk employees is also significant (19,756). In 2008, the total number of jobs created
was 88,500.
R&D costs as a share of sales decreased from 16.5% in 2008 to 15.4% in 2009 reflecting non-recurring costs in 2008 related to closure of all pulmonary
diabetes projects as well as the closure of further development activities in the low serum albumin in dialysis (LSAD) indication for growth hormone.
Cash value distribution 2009
Customers
Suppliers
Company cash
Employees
Investors/funders
Public sector
Management
Cash received from products and services (from sales)
Cash payments for materials, facilities and services *)
Cash added value (cash received minus cash payments)
Remuneration
Dividend, share repurchase and interest payments
Taxes
Future growth
DKK million
Cash
received
Cash
added value
50,596
20,386
30,210
15,496
10,429
1,998
2,287
100%
40%
31%
21%
4%
4%
100%
51%
34%
7%
8%
*) Investments in fixed assets and cash payments outside Novo Nordisk. The figure includes cash received from licence fees, realised exchange rate gains and interest income.
94 Novo Nordisk Annual Report 2009
16 Wastewater
The total volume of wastewater decreased by 19% from 2,542,000 m3 in
2008 to 2,062,000 m 3 in 2009, primarily due to changes in production
at the production facility in Kalundborg. In the same period, the discharged
quantity of COD decreased by 31% from 891 tons in 2008 to 617 tons in
2009. This was due to improved data registration and changes in produc-
tion in Kalundborg.
17 Waste
In 2009, the total amount of waste increased by 3% compared to 2008.
This is mainly due to a 24% increase in the quantity of hazardous waste,
primarily because of a larger disposal of ethanol. The amount of non-
hazardous waste decreased by 6% due to minor decreases in several
fractions such as incinerated waste, plastic, and gland residues. Non-
hazardous construction and demolition waste fractions increased.
The recycling percentage remained at the same level as in 2008.
Tons
2009
2008
2007
Non-hazardous waste
– Recycled
– Incinerated *)
– Landfill
– Special treatment
Hazardous waste
– Recycled ethanol **)
– Incinerated ethanol ***)
Total waste
13,432
58
21
5
17
7,587
40
21
21,019
14,240
57
20
6
17
6,106
38
19
11,604
48
26
13
13
5,972
18
40
20,346
17,576
Recycling percentage of total waste
51
51
38
99.3% with energy recovery.
*)
**) Ethanol recycled in eg biogas or wastewater treatment plants.
***) Incinerated at combined heat and power plants or at plants for special treatment
of hazardous waste with energy recovery.
18 CO2 emissions to air
The CO2 emissions from energy consumption decreased from 215,000 tons
in 2008 to 146,000 tons in 2009 – a decrease of 32% (69,000 tons). Close
to half of this reduction is due to the decrease in energy consumption of
11%. The other half is attributable to the partnership with DONG Energy in
Denmark and the purchase of electricity from Horns Rev 2 – an offshore
wind turbine farm in the North Sea.
The CO2 emissions from cooling agents is a new focus area for Novo
Nordisk and was measured consistently for the first time in 2009, when
emissions totalled 5,841 tons.
The CO2 emissions from energy consumption as share of sales in Danish
kroner (measured as an index, with 2003 = 100) improved to 37 in 2009
compared to 60 in 2008. This demonstrates that Novo Nordisk has drama -
tically reduced CO2 emissions from energy consumption from production
as sales and production continue to increase.
19 Breaches of regulatory limit values
Ensuring compliance with legal requirements on environment is a high
priority for Novo Nordisk. The number of breaches of regulatory limit values
decreased from 28 in 2008 to 10 in 2009, a decrease of 64%. This reduction
and the low level of breaches is due to a continuous focus on this area.
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Novo Nordisk Annual Report 2009 95
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Summary of financial data 2005 –2009 in EUR (unaudited)
EUR million
Sales
Sales by business segment:
Modern insulins (insulin analogues)
Human insulins
Protein-related sales
Oral antidiabetic products (OAD)
Diabetes care total
NovoSeven ®
Norditropin ®
Hormone replacement therapy
Other products
Biopharmaceuticals total
Sales by geographical segment:
North America
Europe *)
International Operations *)
Japan & Oceania
Depreciation, amortisation and impairment losses
Operating profit
Operating profit (excl AERx ®) **)
Net financials
Profit before income taxes
Income taxes
Net profit
Total assets
Total current liabilities
Total non-current liabilities
Equity
Investments in property, plant and equipment (net)
Investments in intangible assets and non-current financial assets (net)
Free cash flow ***)
Net cash flow
2005
4,531
979
1,819
196
229
3,223
680
373
210
45
2006
5,194
1,451
1,804
215
266
3,736
755
444
215
44
2007
5,614
1,880
1,687
235
288
4,090
788
471
224
41
2008
6,109
2,323
1,583
247
321
4,474
858
518
216
43
1,308
1,458
1,524
1,635
1,279
1,882
738
632
259
1,085
1,085
20
1,105
318
787
5,624
1,418
502
3,704
492
(18)
649
(85)
1,646
2,051
871
626
287
1,223
1,223
6
1,229
364
865
5,994
1,362
592
4,040
374
33
631
62
1,845
2,194
979
596
404
1,200
1,378
272
1,472
328
1,144
6,401
1,427
658
4,316
304
16
1,210
220
2,032
2,309
1,130
638
328
1,660
1,704
43
1,703
409
1,294
6,792
1,739
627
4,426
235
35
1,478
552
2009
6,860
2,883
1,520
277
356
5,036
950
591
234
49
1,824
2,454
2,356
1,320
730
343
2,005
2,005
(126)
1,879
433
1,446
7,356
1,802
752
4,802
353
58
1,656
307
*) Comparative figures for 2005 and 2006 have been adjusted in order to reflect a changed organisational structure from 1 January 2007 which transfers eight countries, incl
Bulgaria and Romania, from International Operations to Europe.
**) Excluding costs related to discontinuation of all pulmonary diabetes projects.
***) For definitions, please refer to p 88.
Key figures are translated into EUR as supplementary information – the translation of Income statement items is based on the average exchange rate in 2009 (EUR 1 = DKK 7.4463)
and the translation of balance sheet items is based on the exchange rate at the end of 2009 (EUR 1 = DKK 7.4415). The figures in DKK reflect the economic substance of the underlying
events and circumstances of the Group.
96 Novo Nordisk Annual Report 2009
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Quarterly financial figures 2008 and 2009 (unaudited)
DKK million
Sales
Sales by business segment:
Modern insulins (insulin analogues)
Human insulins
Protein-related sales
Oral antidiabetic products (OAD)
Diabetes care total
NovoSeven ®
Norditropin ®
Hormone replacement therapy
Other products
Biopharmaceuticals total
Sales by geographical segment:
North America
Europe
International Operations
Japan & Oceania
Gross profit
Sales and distribution costs
Research and development costs
Administrative expenses
Licence fees and other operating income (net)
Operating profit
Net financials
Profit before taxation
Income taxes
Net profit
2008
2009
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
10,614
11,110
11,246
12,583
12,498
13,001
12,517
13,062
3,821
2,939
443
640
4,103
2,966
460
478
4,365
2,806
464
671
5,028
3,093
477
602
4,990
3,004
484
691
5,414
2,879
492
675
5,353
2,747
519
650
5,714
2,685
569
636
7,843
8,007
8,306
9,200
9,169
9,460
9,269
9,604
1,440
878
385
68
1,648
986
391
78
1,534
941
394
71
1,774
1,060
442
107
1,805
1,034
409
81
1,874
1,122
435
110
1,651
1,074
440
83
1,742
1,171
460
85
2,771
3,103
2,940
3,383
3,329
3,541
3,248
3,458
3,450
4,061
2,096
1,007
8,201
2,975
1,858
627
88
2,829
39
2,868
688
3,467
4,400
2,069
1,174
8,556
3,178
1,980
626
74
2,846
405
3,251
780
3,759
4,305
2,074
1,108
8,640
3,155
1,579
633
51
3,324
182
3,506
842
4,478
4,453
2,186
1,466
10,047
3,558
2,439
749
73
3,374
(304)
3,070
740
4,532
4,195
2,513
1,258
9,990
3,844
1,744
679
87
3,810
4,710
4,375
2,532
1,384
10,391
3,837
1,849
693
78
4,090
4,527
4,376
2,288
1,326
9,832
3,502
1,884
666
34
3,814
4,510
4,594
2,493
1,465
10,427
4,237
2,387
726
142
3,219
(305)
3,505
806
(206)
3,884
893
(207)
3,607
852
(227)
2,992
669
2,180
2,471
2,664
2,330
2,699
2,991
2,755
2,323
Depreciation, amortisation and impairment losses
563
567
560
752
607
533
657
754
Total assets
Total equity
Financial ratios
In percentage of sales
Sales and distribution costs
Research and development costs
Administrative expenses
Gross margin
Operating profit margin
Equity ratio
Share ratios
Basic earnings per share/ADR (in DKK)
Diluted earnings per share/ADR (in DKK)
Average number of shares outstanding (million) – basic
Average number of shares outstanding (million) – diluted
Employees
47,534
31,251
48,478
33,046
48,990
32,173
50,603
32,979
50,205
31,345
51,246
34,086
52,589
34,874
54,742
35,734
5.9%
28.0% 28.6% 28.1% 28.3%
17.5% 17.8% 14.0% 19.4%
6.0%
77.3% 77.0% 76.8% 79.8%
26.7% 25.6% 29.6% 26.8%
65.7% 68.2% 65.7% 65.2%
5.6%
5.6%
5.4%
30.8% 29.5% 28.0% 32.4%
14.0% 14.2% 15.1% 18.3%
5.6%
79.9% 79.9% 78.5% 79.8%
30.5% 31.5% 30.5% 24.6%
62.4% 66.5% 66.3% 65.3%
5.3%
5.3%
3.51
3.48
620.9
626.3
3.99
3.96
618.6
623.5
4.34
4.30
614.2
618.6
3.82
3.80
609.3
614.4
4.44
4.41
607.4
612.7
4.96
4.91
603.1
607.9
4.62
4.58
596.4
601.4
3.95
3.92
589.9
595.2
Number of full-time employees at the end of the period
25,765
26,060
26,360
26,575
27,429
27,998
28,497
28,809
Novo Nordisk Annual Report 2009 97
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F
Financial
statements
of the Parent
company
for 2009
99 Income statement
100 Balance sheet
101 Notes to the financial statements
98 Novo Nordisk Annual Report 2009
Income statement for the year ended 31 December
DKK million
Sales
Cost of goods sold
Gross profit
Sales and distribution costs
Research and development costs
Administrative expenses
Licence fees and other operating income (net)
Operating profit
Profit in subsidiaries
Share of profit in associated companies
Financial income
Financial expenses
Profit before income taxes
Income taxes
Net profit for the year
Proposed appropriation of net profit:
Dividends
Net revaluation reserve according to the equity method
Retained earnings
Note
2
3
3
3
3, 4
9
9
5
5
6
2009
27,834
9,155
18,679
6,932
6,739
1,229
433
4,212
8,170
(55)
381
1,087
11,621
857
10,764
4,400
5,751
613
10,764
2008
27,145
8,069
19,076
7,654
5,633
1,243
409
4,955
5,318
71
1,098
635
10,807
1,165
9,642
3,650
(5,422)
11,414
9,642
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Novo Nordisk Annual Report 2009 99
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B
l
Balance sheet at 31 December
DKK million
Assets
Intangible assets
Property, plant and equipment
Financial assets
Total non-current assets
Raw materials and consumables
Work in progress
Finished goods
Inventories
Trade receivables
Amounts owed by affiliates
Tax receivables
Other receivables
Receivables
Marketable securities and financial instruments
Cash at bank and in hand
Total current assets
Total assets
Equity and liabilities
Share capital
Net revaluation reserve according to the equity method
Retained earnings
Exchange rate adjustments
Total equity
Deferred income tax liabilities
Other provisions
Total provisions
Mortgage debt
Other non-current debt
Non-current liabilities
Current debt and financial instruments
Trade payables
Amounts owed to affiliates
Tax payables
Other liabilities
Current liabilities
Total liabilities
Total equity and liabilities
100 Novo Nordisk Annual Report 2009
Note
2009
2008
7
8
9
10
12
13
11
781
14,381
17,400
32,562
1,100
6,509
1,492
9,101
1,081
3,889
464
623
6,057
1,528
10,625
27,311
59,873
620
22,144
12,670
271
35,705
880
566
1,446
503
467
970
306
1,188
17,454
1
2,803
21,752
22,722
59,873
543
14,512
11,313
26,368
1,160
6,683
1,065
8,908
945
5,541
535
631
7,652
1,375
8,299
26,234
52,602
634
16,393
16,183
(256)
32,954
906
588
1,494
504
476
980
1,279
1,262
11,917
1
2,715
17,174
18,154
52,602
Net profit of subsidiaries less unrealised intercompany profits is recorded in
the Income statement of the Parent company.
Average number of full-time
employees in Novo Nordisk A/S
1 Accounting policies
The Financial statements for the Parent company have been prepared in
accordance with the Danish Financial Statements Act (Class D), and other
accounting regulations for companies listed on NASDAQ OMX Copen -
hagen.
The accounting policies for the Financial statements for the Parent company
are unchanged compared to last financial year and are the same as for the
Consolidated financial statements with the following additions. For a
description of the accounting policies of the Group, please refer to note 1
Critical accounting estimates and judgements, pp 56 –57 and note 2
Accounting policies, pp 57– 61.
Supplementary accounting policies for the Parent company
Financial assets
In the financial statements of the Parent company, Investments in sub-
sidiaries and associated companies are recorded under the equity method,
which is at the respective share of the net asset values in subsidiaries and
associated companies. Any cost in excess of net assets in the acquired com-
pany is capitalised in the Parent company under Financial assets as part of
investments in subsidiaries (‘Goodwill’). Amortisation of goodwill is pro -
vided under the straight-line method over a period not exceeding 20 years,
based on estimated useful life.
To the extent it exceeds declared dividends from such companies, net
revaluation of investments in subsidiaries and associated companies is trans-
ferred to net revaluation reserve according to the equity method under
equity.
Fair value adjustments of financial assets categorised as ‘Available for sale’
are recognised in the Parent company in the Income statement.
The profit in subsidiaries is shown as profit after tax.
Tax
The Parent company is assessed jointly for Danish tax purposes with its
Danish subsidiaries. The Danish jointly taxed companies are included in a
Danish on-account tax payment scheme for Danish corporate income tax.
All current taxes under the scheme are recorded in the individual com -
panies.
Cash flow statement
No separate cash flow statement has been prepared for the Parent company
– please refer to the Consolidated statement of cash flow on p 54.
2 Sales
DKK million
Sales by business segment *)
Diabetes care total
Biopharmaceuticals total
Total sales
Sales by geographical segment *)
Europe
North America
International Operations
Japan & Oceania
Total sales
2009
2008
27,513
321
26,802
343
27,834
27,145
10,603
7,013
6,917
3,301
10,535
7,520
5,880
3,210
27,834
27,145
Sales are attributed to geographical segment based on location of the
customer.
*) For definitions of the segments, please refer to the Consolidated financial state-
ments, note 3, pp 62– 63.
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3 Employee costs
DKK million
Wages and salaries
Share-based payment costs
Pensions
Other contributions to social security
Other employee costs
Total employee costs
2009
6,106
121
541
144
275
7,187
2008
5,521
257
504
95
338
6,715
Included in the Balance sheet as change
in employee costs included in inventories
90
87
For information regarding remuneration to the Board of Directors and
Executive Management, please refer to Consolidated financial statements,
note 30, pp 78 –79. Reference is furthermore made to the Consolidated
financial statements, note 29, p 76, and the Consolidated financial state-
ments, note 30, pp 79 – 80, for information regarding share-based payment
schemes to the Board of Directors, Executive Management and the Senior
Management Board.
2009
2008
10,910
10,693
2009
2008
8
1
6
2
17
7
2
8
–
17
4 Remuneration to statutory auditors
DKK million
Statutory audit
Audit-related services
Tax advisory services
Other services
Total
5 Financial income and financial expenses
DKK million
2009
2008
Interest income relating to subsidiaries
Other financial income
Financial income
Interest expenses relating to subsidiaries
Foreign exchange loss (net)
Other financial expenses
Financial expenses
24
357
381
157
57
873
1,087
164
934
1,098
410
68
157
635
6 Income taxes
The Parent company paid DKK 1,370 million related to current year
(DKK 1,663 million in 2008).
Novo Nordisk Annual Report 2009 101
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7 Intangible assets
DKK million
Cost at the beginning of the year
Additions during the year
Disposals during the year
Cost at the end of the year
Amortisation at the beginning of the year
Amortisation during the year
Impairment losses for the year
Amortisation reversed on disposals during the year
Amortisation at the end of the year
Carrying amount at the end of the year
8 Property, plant and equipment
Goodwill
Patents and
licences
Software
51
–
–
51
51
–
–
–
51
–
590
277
(48)
819
205
16
59
(48)
232
587
392
69
–
461
234
33
–
–
267
194
2009
Total
1,033
346
(48)
1,331
490
49
59
(48)
550
781
2008
Total
831
202
–
1,033
401
31
58
–
490
543
DKK million
Cost at the beginning of the year
Additions during the year
Disposals during the year
Transfer from/(to) other items
Cost at the end of the year
Depreciation and impairment losses at the beginning of the year
Depreciation for the year
Impairment losses for the year
Depreciation reversed on disposals during the year
Depreciation and impairment losses at the end of the year
Land and
buildings
Plant and
machinery
Other
equipment
9,420
130
(47)
186
13,160
126
(90)
615
9,689
13,811
3,003
365
100
(44)
3,424
7,281
1,130
61
(65)
8,407
1,696
77
(40)
37
1,770
965
153
7
(31)
1,094
Payments
on account
and assets
in course of
construction
1,485
1,389
–
(838)
2,036
–
–
–
–
–
2009
Total
2008
Total
25,761
1,722
(177)
–
27,306
11,249
1,648
168
(140)
12,925
25,255
1,151
(645)
–
25,761
10,013
1,672
152
(588)
11,249
Carrying amount at the end of the year
6,265
5,404
676
2,036
14,381
14,512
102 Novo Nordisk Annual Report 2009
9 Financial assets
DKK million
Cost at the beginning of the year
Additions during the year
Disposals during the year
Cost at the end of the year
Value adjustments at the beginning of the year
Adjustments to prior year
Profit/(loss) before tax
Income taxes on profit for the year
Amortisation and impairment of goodwill
Dividends received
Exchange rate adjustments
Other adjustments
Value adjustments at the end of the year
Offset against amounts owed by subsidiaries
at the beginning of the year
Additions during the year
At the end of the year
Unrealised internal profit at the beginning of the year
Change for the year
Exchange rate adjustments
At the end of the year
Investments
in subsidiaries
Amounts
owed by
affiliates
Investments
in associated
companies
Other
securities
and
investments
2009
Total
2008
Total
8,193
8
–
8,201
15,624
286
10,763
(2,363)
–
(2,650)
478
61
22,199
61
41
102
(13,274)
(230)
45
(13,459)
83
5
(15)
73
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
601
15
–
616
(116)
(286)
(55)
–
(3)
(18)
–
14
(464)
–
–
–
–
–
–
–
463
25
–
488
(322)
–
–
–
–
–
–
(34)
(356)
–
–
–
–
–
–
–
9,340
53
(15)
9,378
15,186
–
10,708
(2,363)
(3)
(2,668)
478
41
21,379
61
41
102
(13,274)
(230)
45
(13,459)
7,187
2,197
(44)
9,340
20,853
–
8,036
(1,885)
(3)
(11,680)
455
(590)
15,186
164
(103)
61
(12,190)
(762)
(322)
(13,274)
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Carrying amount at the end of the year
17,043
73
152
132
17,400
11,313
Carrying amount of investments in subsidiaries does not include capitalised goodwill at the end of the year. Carrying amount of investments in associated
companies includes net capitalised goodwill of DKK 58 million at the end of the year (DKK 61 million in 2008). No additions or disposals were made during
the year.
A list of companies in the Novo Nordisk Group is included in the Consolidated financial statements, note 34.
10 Statement of changes in equity
DKK million
Balance at the beginning of the year
Appropriated from net profit for the year
Proposed dividends
Appropriated from net profit for the year to net revaluation reserve
Purchase of treasury shares
Sale of treasury shares
Share-based payments
Reduction of the B share capital
Dividends paid
Exchange rate adjustment of investments in subsidiaries
Effect of hedged forecast transactions transferred
to the Income statement
Fair value adjustments for the year on cash flow hedges
Other adjustments
Share
capital
Net
revaluation
reserve
Retained
earnings
Exchange
rate
adjustments
634
16,393
5,751
(14)
16,183
613
4,400
(6,512)
117
259
14
(3,650)
900
352
(6)
2009
Total
32,954
613
4,400
5,751
(6,512)
117
259
–
(3,650)
523
900
352
(2)
2008
Total
32,160
11,414
3,650
(5,422)
(4,717)
295
331
–
(2,795)
(473)
(615)
(940)
66
35,705
32,954
(256)
523
4
271
Balance at the end of the year
620
22,144
12,670
Regarding average number of shares please refer to the Consolidated financial statements, note 13, p 65.
Regarding total number of A and B shares in Novo Nordisk A/S and treasury shares, please refer to the Consolidated financial statements, note 21, p 71.
Novo Nordisk Annual Report 2009 103
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DKK million
2009
2008
11 Non-current liabilities
14 Commitments and contingencies
Non-current liabilities falling due after more than five years from the balance
sheet date amounts to DKK 407 million (DKK 462 million in 2008). At the
end of 2009, none of the non-current liabilities was falling due within one
year.
12 Deferred income tax liabilities
DKK million
2009
2008
Commitments
Lease commitments
Contractual obligations relating to
investments in property, plant and equipment
Guarantees given for subsidiaries
Obligations related to research and
development projects
Other guarantees and commitments
The deferred tax assets and liabilities
are allocated to the various balance sheet
items as follows:
Property, plant and equipment
Indirect production costs
Unrealised profit on intercompany sales
Other
1,217
1,171
(1,587)
79
1,305
1,134
(1,541)
8
Lease commitments expiring
within the following periods
as from the balance sheet date
Within one year
Between one and five years
After five years
Total income tax liabilities
880
906
Total lease commitments
The deferred income tax has been calculated using a tax rate of 25%.
For a specification of deferred income tax posted directly in Other com -
prehensive income, please refer to the Consolidated financial statements,
note 11, p 65.
The lease costs for 2009 and 2008 were
DKK 250 million and DKK 223 million, respectively.
Security for debt
Land, buildings and equipment etc
at carrying amount
809
260
1,346
1,989
1,373
144
387
278
809
600
99
2,184
764
1,793
109
247
244
600
1,196
1,255
13 Other provisions
DKK million
Specification of other provisions:
Non-current
Current
Total other provisions
For information on pending litigation and other contingencies, please refer
to the Consolidated financial statements, note 32, pp 84 – 85.
15 Related party transactions
For information on transactions with related parties, please refer to the
Consolidated financial statements, note 33, p 85.
2009
2008
149
417
566
163
425
588
Provisions for pending litigations are recognised as other provisions.
Further more, as part of normal business Novo Nordisk issues credit notes
for expired goods. Consequently, a provision for future returns is made,
based on historical statistical product returns.
104 Novo Nordisk Annual Report 2009
Statement by the Board of Directors and Executive Management on the Annual Report
Today, the Board of Directors and Executive Management approved the Annual Report of Novo Nordisk A/S for the year 2009.
The Consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IASB), and with the International Financial Reporting Standards as endorsed by the EU. The Financial statements of the Parent company,
Novo Nordisk A/S, are prepared in accordance with the Danish Financial Statements Act.
Further, the Consolidated financial statements, the Financial statements of the Parent company and Management’s Review are prepared in accordance with
additional Danish disclosure requirements for listed companies.
In our opinion, the Consolidated financial statements and the Financial statements of the Parent company give a true and fair view of the financial position at
31 December 2009, the results of the Group and Parent company operations and consolidated cash flows for the financial year 2009. Furthermore, in our
opinion, Management’s Review includes a true and fair account of the development in the operations and financial circumstances, of the results for the year
and of the financial position of the Group and the Parent company as well as a description of the most significant risks and elements of uncertainty facing
the Group and the Parent company.
Novo Nordisk’s non-financial statements have been prepared in accordance with the non-financial reporting principles of materiality, inclusivity
and responsiveness of AA1000APS(2008). They give a balanced and reasonable presentation of the organisation’s economic, environmental and social
performance.
We recommend that the Annual Report be adopted at the Annual General Meeting.
Gladsaxe, 1 February 2010
Executive Management
Lars Rebien Sørensen
President and CEO
Jesper Brandgaard
CFO
Lise Kingo
Kåre Schultz
Mads Krogsgaard Thomsen
Board of Directors
Sten Scheibye
Chairman
Göran A Ando
Vice chairman
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Henrik Gürtler
Johnny Henriksen
Pamela J Kirby
Anne Marie Kverneland
Kurt Anker Nielsen
Chairman of
the Audit Committee
Søren Thuesen Pedersen
Hannu Ryöppönen
Audit Committee member
Stig Strøbæk
Jørgen Wedel
Audit Committee member
Novo Nordisk Annual Report 2009 105
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Independent auditor’s report on the Annual Report
for 2009
To the shareholders of Novo Nordisk A/S
We have audited the Annual Report of Novo Nordisk A/S for the financial
year 2009, pp 2– 88 and pp 98 –105, which comprises Management
Statement, Management’s review, Income Statement, Statement of Com -
prehensive Income, Balance Sheet, Statement of Changes in Equity and
Notes including significant accounting policies for the Group as well as for
the Parent Company and Consolidated Cash Flow Statement.
The Consolidated Financial Statements are prepared in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and International Financial Reporting
Standards as endorsed by the EU. The Financial Statements of the Parent
Company are prepared in accordance with the Danish Financial Statements
Act. Moreover, the Annual Report is prepared in accordance with additional
Danish disclosure requirements for listed companies.
Management’s responsibility
Management is responsible for the preparation and fair presentation of
the Consolidated Financial Statements and the Financial Statements of the
Parent Company in accordance with the above legislation and accounting
standards This responsibility includes: designing, implementing and main-
taining internal control relevant to the preparation and fair presentation of
Consolidated Financial Statements and Financial Statements of the Parent
Company that are free from material misstatement, whether due to fraud or
error.
The responsibility also includes selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable
in the circumstances. Furthermore, Management is responsible for the
preparation of a Management’s review that gives a true and fair account in
accordance with Danish disclosure requirements for listed companies.
Auditor’s responsibility
Our responsibility is to express an opinion on the Annual Report based on
our audit. We conducted our audit in accordance with International and
Danish Auditing Standards. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable
assurance that the Annual Report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the Annual Report. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the Annual Report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control
relevant to the Entity’s preparation and fair presentation of Consolidated
Financial Statements and Financial Statements of the Parent Company and
to the preparation of a Management’s review that gives a true and fair
account in order to design audit procedures that are appropriate in the
circumstances.
An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by Manage -
ment, as well as evaluating the overall presentation of the Annual Report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Our audit has not resulted in any qualification.
Opinion
In our opinion, the Annual Report gives a true and fair view of the financial
position at 31 December 2009 of the Group and of the results of the
Group’s operations and consolidated cash flows for the financial year 2009
in accordance with International Financial Reporting Standards as issued by
the International Accounting Statements Board, and International Financial
Reporting Standards as endorsed by the EU and additional Danish disclosure
requirements for listed companies. Moreover, in our opinion the Annual
Report gives a true and fair view of the financial position at 31 December
2009 of the Parent Company and of the results of the Parent Company’s
operations for the financial year 2009 in accordance with the Danish
Financial Statements Act and additional Danish disclosure requirements for
listed companies. Furthermore, in our opinion the Management’s review
gives a true and fair account in accordance with Danish disclosure require-
ments for listed companies.
Gladsaxe, 1 February 2010
PricewaterhouseCoopers
Statsautoriseret Revisionsaktieselskab
Mogens Nørgaard Mogensen
Danish State Authorised
Public Accountant
Lars Baungaard
Danish State Authorised
Public Accountant
106 Novo Nordisk Annual Report 2009
Independent assurance report on the non-financial
reporting for 2009
To the stakeholders of Novo Nordisk A/S
We have reviewed the non-financial information in the Annual Report of
Novo Nordisk A/S for the financial year 2009, which comprises Manage -
ment’s Statement, Management’s Review, the non-financial accounting
policies and the consolidated non-financial statement on pp 2– 50, 89 – 95
and 105.
The assurance engagement has furthermore covered the nature and
extent of Novo Nordisk A/S incorporation of the AA1000 AccountAbility
(AA1000APS(2008)) principles (inclusivity, materiality and responsiveness)
with respect to stakeholder dialogue.
Criteria for the preparation of reporting on data
The non-financial information is prepared in accordance with the
accounting policies described on pp 90 – 92.
Management’s responsibility
Novo Nordisk A/S’ Management is responsible for preparing the non-finan-
cial information, including for establishing data collection and registration,
internal control systems with a view to ensuring reliable reporting, specify-
ing acceptable reporting criteria and choosing data to be collected for
intended users of the report. Also, adherence to AA1000APS(2008) and the
three principles of inclusivity, materiality and responsiveness is the respons -
ibility of Novo Nordisk A/S’ Management.
Assurance provider’s responsibility
Our responsibility is, on the basis of our work, to express a conclusion on
the reliability of the non-financial information in the report. Furthermore,
our responsibility is to express a conclusion on as well as to make recom-
mendations for the nature and extent of Novo Nordisk A/S’ adherence to
the AA1000APS principles.
Our team of experts have competences in respect of assurance engage-
ments related to non-financial information. In addition, our team have com-
petences in assessing non-financial information and sustainability manage-
ment, and thus qualify to conduct this independent assurance engagement.
Also, we have not been responsible for the preparation of any part of the
report, and we are independent as defined by the AA1000 Assurance
Standard (AA1000AS (2008)).
Scope, standards and criteria used
We have planned and performed our work in accordance with the Inter -
national Standard on Assurance Engagements (ISAE) 3000,“Assurance
Engagements other than Audits or Reviews of Historical Financial Informa -
tion”, to obtain limited assurance that the non-financial information in the
Annual Report is free of material misstatements and that the information
has been presented in accordance with the non-financial accounting
policies. The assurance obtained is limited, as our work compared to that of
an engagement with reasonable assurance has been limited to, principally,
inquiries, interviews and analytical procedures related to registration and
communication systems, data and underlying documentation.
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Moreover, we have planned and performed our work based on the
AA1000AS(2008), using the criteria in the AA1000APS(2008), to perform
a Type 2 engagement and to obtain a moderate level of assurance regarding
the nature and extent of Novo Nordisk A/S’ adherence to the principles of
inclusivity, materiality and responsiveness.
Methodology, approach, limitation and scope of work
Based on an assessment of materiality and risk, our work included:
(i) Inquiries regarding procedures and methods to ensure that non-financial
reporting includes data from the Group’s Business Unit operations, and
that these data have been incorporated in compliance with the accounting
policies. Through site visits to Hillerød, Kalundborg, Chartres and Montes
Claros and based on requests and selected documentation, we have
further more assessed the existing systems for data collection and registra-
tion, and procedures to ensure reliable reporting;
(ii) Inquiries and interviews with members of Executive Management, staff
from the sustainability development department, as well as Management
representing different functions in the Group, regarding Novo Nordisk A/S’
adherence to the principles of inclusivity, materiality and responsiveness,
including Management’s commitment to the principles, the existence
of systems and procedures to support adherence to the principles and the
embedding of the principles at corporate level.
Conclusion
Based on our review, nothing has come to our attention which causes
us not to believe that the non-financial performance information presented
in the Annual Report 2009 (on pp 2– 50, 89– 95 and 105) is free of material
misstatements and has been stated in accordance with the criteria men-
tioned.
Furthermore, nothing has come to our attention causing us to believe that
Novo Nordisk A/S does not adhere to the AA1000APS(2008) principles.
Observations and recommendations
According to the Assurance Standard (AA1000AS(2008)), we are required
to include observations and recommendations for improvements in relation
to adherence to the AA1000APS(2008) principles:
Novo Nordisk A/S’ Management has a strong commitment to inclusivity
and stakeholder engagement. Also, the Company has in place systems and
processes to ensure a continuous mapping of relevant stakeholders, as
well as a structured and systematic approach to ensuring the inclusion of
stakeholder concerns, demands and expectations at a corporate level.
Novo Nordisk A/S’ Management systematically takes the principle of mate -
riality into consideration when making decisions regarding sustainability
at management level. Also, the Company has in place a number of relevant
governance bodies to discuss, evaluate and determine the materiality of
sustainability issues on ongoing basis.
Novo Nordisk A/S is committed to being responsive to stakeholders as
is evident from the wide range of media, forums and forms used by Novo
Nordisk A/S to communicate on sustainability issues.
We recommend that Novo Nordisk A/S continue to work on ensuring a
systematic and structured approach to the AA1000APS(2008) principles at
a local site level.
Gladsaxe, 1 February 2010
PricewaterhouseCoopers
Statsautoriseret Revisionsaktieselskab
Mogens Nørgaard Mogensen
Danish State Authorised
Public Accountant
Lars Baungaard
Danish State Authorised
Public Accountant
Novo Nordisk Annual Report 2009 107
Index
This index might be of help if you are looking for specific information. It explains how our reporting fulfils our commitment to report
in accordance with the Global Reporting Initiative and the UN Global Compact. Additional information for topics covered in this report
is available online, under the categories listed here, at annualreport2009.novonordisk.com.
Topic
Page(s) in this report
Global Reporting Initiative Indicator
UN Global Compact Principle
Financial and economics
Brand and reputation management
93
10
10
10
6
6
1–6, 10
6
10
1–6
6
3, 6
8, 9
8
8
7–9
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Business ethics
Economic footprint
Financial performance
Innovation
Litigation
Marketing practices
Quality
Share information
Socioeconomics
Tax
Social
Access to health
Animal welfare
Changing Diabetes®
Clinical research
Diversity
Donations
Health and safety
Healthy workplace
Human rights
People strategy
Public Affairs
Responsible sourcing
29, 33–35, 38, 42, 92
30
SO2–3
EC1, EC9
7–10, 14, 52–55, 62–63, 96–97
2, 4–6, 19–20, 25–26, 31–33
42, 84–85
33–35
93
47–49
30, 94
30, 72
SO7
PR6–7
PR1–4
EC1, EC9
22–23, 26, 93
EC8
93
20–22
32–34
32, 92
22, 26, 84
93
93
28, 31
32–33
34
31
PR3
LA13
LA7
LA8
HR1–9, SO5
EC7, LA11–12
SO5-6
EC6, HR1–2
LA12
Talent attraction and development
32–33
Wages and benefi ts
39–40, 64, 78–80
EC5, LA3–4, LA12
Environment
Climate action
Environmental management
33–36
35–36
EN5, EN7, EN18
EN13, EN30
Environmental performance
11–12, 35–36, 92–95
EN1, EN3, EN4, EN8, EN16, EN20–23
Product stewardship
20
EN26
Stakeholder engagement
Partnerships
4, 21, 31–33
Stakeholder engagement strategy
31
Governance and reporting
Accountability
Audit and assurance
Board of Directors
Capital structure
Compliance
Corporate governance
Executive Management
Executive remuneration
Materiality
Novo Nordisk Way of Management
Risk management
Our business
About Novo Nordisk
Biopharmaceuticals
Diabetes care
Pipeline
Sustainability
Triple Bottom Line
33, 37, 90
34, 90
43–45
48
29, 33–35, 37–39, 42
37–39
46
39–40, 76–80
90
28–29
40–42
1, 50
24–27
18–23
16–17
10, 22, 26, 28, 40
1, 4, 10, 28, 29, 31
108 Novo Nordisk Annual Report 2009
Our products
This report makes reference to European product trade names. The list below provides an overview of European trade names with
accompanying generic names. Trade and generic names may differ in other markets.
Therapeutic area
Trade name
Generic name
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Diabetes care
Modern insulins
GLP-1
Human insulins
Diabetes devices
Oral antidiabetic agents
Biopharmaceuticals
Haemostasis
Human growth hormone
HRT
References
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Levemir®
NovoRapid®
NovoMix® 30
NovoMix® 50
NovoMix® 70
Victoza®
Insulatard®
Actrapid®
Mixtard® 30
FlexPen®
NovoPen® 4
Insulin detemir
Insulin aspart
Biphasic insulin aspart
Biphasic insulin aspart
Biphasic insulin aspart
Liraglutide
Insulin human
Insulin human
Insulin human
Prefilled insulin delivery system
Durable insulin delivery system
NovoPen Echo®
Durable insulin delivery system
InnoLet®
NovoFine®
NovoTwist®
GlucaGen®
NovoNorm®
PrandiMet®
NovoSeven®
Norditropin®
NordiFlex™
Prefilled insulin delivery system
Needle
Needle
Glucagon
Repaglinide
Repaglinide/metformin
Recombinant factor VIIa
Somatropin (rDNA origin)
Prefilled multidose delivery system
NordiFlex PenMate®
Automatic needle insertion accessory
NordiPen®
Prefilled multidose delivery system
NordiPenMate®
Prefilled multidose delivery system
NordiLet®
Activelle®
Estrofem®
Novofem®
Vagifem®
Prefilled multidose delivery system
Estradiol/norethisterone acetate
Estradiol
Estradiol/norethisterone acetate
Estradiol hemihydrate
1 Three-Year Efficacy of Complex Insulin Regimens in Type 2 Diabetes: Holman R et al,
New England Journal of Medicine; 361; 18; 29 October, 2009
2 diabetologia-journal.org
3 Estimated number of patients using FlexPen®, based on worldwide sales in numbers
of packs sold, IMS worldwide data Q3’09 and Daily Defined Dosage (DDD) for insulin
as stipulated by WHO
4 g-mark.org/english/archive/2009/outline.html
5 Sommavilla et al. Expert Opin Pharmacother 2008; 9: 2223–32
6 Lytzen & Ostfeldt. American Diabetes Association 69th Scientific Sessions; 2009; 1
7 International Diabetes Federation, Diabetes Atlas, 5th edition, 2009
8 NovoSeven® room temperature stable must be stored at temperatures
between 3°C and 25°C (38°F and 77°F).
9 Mr Nielsen, Mr Ryöppönen and Mr Wedel qualify as independent Audit Committee
members as defined by the US Securities and Exchange Commission (SEC).
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This report is about how we do business. When it comes to
building relations, that is what Novo Nordisk people across
the globe do every day. We value stakeholders’ reviews of
our reporting and we welcome questions or comments about
this report or our performance.
Visit the corporate website at
novonordisk.com
Headquarters
Novo Nordisk A/S
Novo Allé
2880 Bagsværd
Denmark
Tel +45 4444 8888
webmaster@novonordisk.com
Transfer agents
Shareholders’ enquiries concerning dividend payments, transfer
of share certificates, consolidation of shareholder accounts and
tracking of lost shares should be addressed to Novo Nordisk’s
transfer agents:
Danske Bank
Holmens Kanal 2–12
1092 Copenhagen K
Denmark
Tel +45 3344 0000
In North America:
JP Morgan Chase & Co
PO Box 64504
St Paul, MN 55164-0504
USA
Tel +1 800 990 1135
Tel +1 651 453 2128 for enquiries from outside the United States
Cover photo: Development of the GLP-1 molecule that eventually led to the
creation of Victoza® was initiated by Lotte Bjerre Knudsen, senior principal
chemist. GLP-1, a natural hormone found in the body and released after eating,
lowers blood glucose and suppresses appetite. Victoza® is an analogue of
natural GLP-1 with the crucial difference that it works actively for 24 hours.
CVR number 24 25 67 90
novonordisk.com