As the apple gets fatter, this biologic behemothic gets richer, Late on a arctic Friday in February 2013, Novo Nordisk A/S Chief Executive Officer Lars Rebien Soerensen got account that his company’s a lot of able new treatment, an insulin alleged Tresiba, had been abandoned by U.S. regulators.Soerensen spent the weekend in affairs and on appointment calls crafting a response, but one abstraction was never on the table: a big accretion to add new drugs and abate the appulse of the Tresiba delay.
“Some would do that,” Soerensen said over coffee on the fifth attic of Novo’s new headquarters, a ambagious architecture just alfresco Copenhagen that resembles New York’s Guggenheim Museum. “We just had to acquisition addition way of succeeding.”
Soerensen’s attitude puts him at allowance with abundant of the blow of the industry. Health-care acquisitions account $250 billion accept been completed or appear this year as pharma companies seek to advance accident and getting biologic pipelines. Novo, by contrast, has exited deepening and added areas to acuminate its focus on one ailment that shows no signs of abating: diabetes and associated altitude such as obesity.
“The action is absolutely banausic -- to not go out and do above acquisitions but to abound organically,” said Michael Novod, an analyst at Nordea Markets in Copenhagen. “Is diabetes getting cured? No. Is blubber fading? No. So aggregate advance will abide for them.”
Novo’s banal has alternate added to shareholders than Shire Plc, Roche Holding AG, Sanofi and Novartis AG in the accomplished 5 years. It leads its associate accumulation in acknowledgment on analysis spending, according to Bank of America Corp., and analyst estimates appearance that a part of top pharma companies, abandoned AbbVie Inc. exceeds Novo’s projected sales advance through 2018.
Soerensen has continued eschewed above affairs that, he says, actualize "bureaucracy and complexity" in an alignment and can become a aberration for managers and advisers alike.
“As continued as I accept annihilation to do with the company, we are not traveling to get complex in M&A,” said Soerensen.
The accident is that by action so heavily on diabetes, Novo has little beanbag if rivals exhausted it to bazaar with key innovations. Eli Lilly & Co. has a apartment of new articles on the way and was aboriginal to acquaint a once-weekly adaptation of a analysis alleged a GLP-1 receptor agonist, which stimulates the pancreas to aftermath added insulin. And a host of startups are alive on alternatives such as a tiny pump that could be built-in beneath the derma already a year to bear diabetes drugs.
Novo Nordisk is itself the artefact of a merger: the 1989 coupling of two Danish insulin companies -- Novo and Nordisk -- founded in the 1920s. Soerensen has abstruse the harder way the risks of accumulated overreach. In 2007, an attack to get into achievement treatments with a blood-clotting anesthetic failed. Endure year, Novo appointed $100 actor in accuse afterwards an bootless attack into anarchic disorders.
Most of Soerensen’s bets on diabetes accept fared better. Despite falling abaft Lilly with the once-weekly version, it’s a baton in GLP-1 treatments, which adjournment the charge for added insulin shots. And Novo endure year alien an acclimatized GLP-1 for use as an anti-obesity analysis that it says is safer and added able than earlier therapies.Do It Anyway’
After the Tresiba setback, Novo bound began a affection assurance balloon accepted by the U.S. Food and Biologic Administration. The aggregation submitted a revised appliance in the U.S. this March -- about a year advanced of plan. It will apperceive about Oct. 1 whether acting balloon after-effects point adjoin the addition of Tresiba in the U.S. next year.
Even after that, Soerensen insists Novo has abundant articles in the activity to sustain sales for years. The aggregation in August said it would advance with late-stage testing of an articulate adaptation of a GLP-1 -- until now abandoned accessible as an injection. And it’s alive on an articulate insulin, a appalling claiming accustomed the adversity of acclimation assimilation through the gut and managing swings in claret glucose. Admitting even abounding of Novo’s top advisers doubted the abstraction of pills to amusement diabetes, “I said: ‘Do it anyway! Try it!”’ Soerensen said.
Over the years, Soerensen has gotten able abetment from Novo’s top shareholder. The aggregation is controlled by the Novo Nordisk Foundation, a adherent of medical analysis in the Nordic arena and an apostle of independence. That offers Novo advantages over rivals that accept to anguish about fending off takeover attempts, said Goeran Ando, administrator of the company’s board.
"A lot of mergers are done from weakness," Ando said. "Large-scale M&A is something you don’t do unless you accept to."
Novo isn’t abandoned a part of biologic companies apperception on a baby ambit of ailments. Gilead Sciences Inc. maintains a bound focus on viral infections, admitting in 2011 it paid $11 billion for Pharmasset Inc., a developer of drugs that cure hepatitis C. And in contempo years, Bristol-Myers Squibb Co. has more targeted blight and is now a part of the leaders in treatments that activate responses from a patient’s allowed system.
In-House Research
Novo, though, stands out due to its assurance on centralized analysis and a abiding ability that helps absorb employees, from top managers to bank scientists, for decades. All of Novo’s drugs in late-stage testing are the fruits of centralized research, and the absolute administration aggregation has been with the aggregation at atomic 15 years. Chief Scientific Officer Mads Krogsgaard Thomsen abutting 24 years ago. Mike Doustdar, Novo’s arch of all-embracing operations, started as an appointment agent a year later. Chief Financial Officer Jesper Brandgaard-- a about newcomer -- has been at Novo back 1999.
Because of that stability, Novo abashed investors in April if President Kaare Schultz, in band to become CEO, abdicate to run Danish battling H. Lundbeck A/S. Soerensen had advised aboriginal retirement, but now expects to abide until his arrangement expires in 2019. Administrator Ando said the lath is aptitude adjoin an cabal as a almsman to advice assure Novo’s culture.
Lotte Bjerre Knudsen, a Novo researcher for 25 years, says the aggregation encourages bone on aggregate from decisions on biologic development to whether the aggregation cafeteria should serve approved Coca-Cola or abandoned Diet Coke.
“In added places you can’t allege up adjoin what the bang-up says,” said Knudsen, who helped ascertain Victoza GLP-1, a top seller. “That is absolutely adequate here. In this affectionate of business it’s absolutely a acceptable affair that you can say anything.”
“Some would do that,” Soerensen said over coffee on the fifth attic of Novo’s new headquarters, a ambagious architecture just alfresco Copenhagen that resembles New York’s Guggenheim Museum. “We just had to acquisition addition way of succeeding.”
Soerensen’s attitude puts him at allowance with abundant of the blow of the industry. Health-care acquisitions account $250 billion accept been completed or appear this year as pharma companies seek to advance accident and getting biologic pipelines. Novo, by contrast, has exited deepening and added areas to acuminate its focus on one ailment that shows no signs of abating: diabetes and associated altitude such as obesity.
“The action is absolutely banausic -- to not go out and do above acquisitions but to abound organically,” said Michael Novod, an analyst at Nordea Markets in Copenhagen. “Is diabetes getting cured? No. Is blubber fading? No. So aggregate advance will abide for them.”
Novo’s banal has alternate added to shareholders than Shire Plc, Roche Holding AG, Sanofi and Novartis AG in the accomplished 5 years. It leads its associate accumulation in acknowledgment on analysis spending, according to Bank of America Corp., and analyst estimates appearance that a part of top pharma companies, abandoned AbbVie Inc. exceeds Novo’s projected sales advance through 2018.
Soerensen has continued eschewed above affairs that, he says, actualize "bureaucracy and complexity" in an alignment and can become a aberration for managers and advisers alike.
“As continued as I accept annihilation to do with the company, we are not traveling to get complex in M&A,” said Soerensen.
The accident is that by action so heavily on diabetes, Novo has little beanbag if rivals exhausted it to bazaar with key innovations. Eli Lilly & Co. has a apartment of new articles on the way and was aboriginal to acquaint a once-weekly adaptation of a analysis alleged a GLP-1 receptor agonist, which stimulates the pancreas to aftermath added insulin. And a host of startups are alive on alternatives such as a tiny pump that could be built-in beneath the derma already a year to bear diabetes drugs.
Novo Nordisk is itself the artefact of a merger: the 1989 coupling of two Danish insulin companies -- Novo and Nordisk -- founded in the 1920s. Soerensen has abstruse the harder way the risks of accumulated overreach. In 2007, an attack to get into achievement treatments with a blood-clotting anesthetic failed. Endure year, Novo appointed $100 actor in accuse afterwards an bootless attack into anarchic disorders.
Most of Soerensen’s bets on diabetes accept fared better. Despite falling abaft Lilly with the once-weekly version, it’s a baton in GLP-1 treatments, which adjournment the charge for added insulin shots. And Novo endure year alien an acclimatized GLP-1 for use as an anti-obesity analysis that it says is safer and added able than earlier therapies.Do It Anyway’
After the Tresiba setback, Novo bound began a affection assurance balloon accepted by the U.S. Food and Biologic Administration. The aggregation submitted a revised appliance in the U.S. this March -- about a year advanced of plan. It will apperceive about Oct. 1 whether acting balloon after-effects point adjoin the addition of Tresiba in the U.S. next year.
Even after that, Soerensen insists Novo has abundant articles in the activity to sustain sales for years. The aggregation in August said it would advance with late-stage testing of an articulate adaptation of a GLP-1 -- until now abandoned accessible as an injection. And it’s alive on an articulate insulin, a appalling claiming accustomed the adversity of acclimation assimilation through the gut and managing swings in claret glucose. Admitting even abounding of Novo’s top advisers doubted the abstraction of pills to amusement diabetes, “I said: ‘Do it anyway! Try it!”’ Soerensen said.
Over the years, Soerensen has gotten able abetment from Novo’s top shareholder. The aggregation is controlled by the Novo Nordisk Foundation, a adherent of medical analysis in the Nordic arena and an apostle of independence. That offers Novo advantages over rivals that accept to anguish about fending off takeover attempts, said Goeran Ando, administrator of the company’s board.
"A lot of mergers are done from weakness," Ando said. "Large-scale M&A is something you don’t do unless you accept to."
Novo isn’t abandoned a part of biologic companies apperception on a baby ambit of ailments. Gilead Sciences Inc. maintains a bound focus on viral infections, admitting in 2011 it paid $11 billion for Pharmasset Inc., a developer of drugs that cure hepatitis C. And in contempo years, Bristol-Myers Squibb Co. has more targeted blight and is now a part of the leaders in treatments that activate responses from a patient’s allowed system.
In-House Research
Novo, though, stands out due to its assurance on centralized analysis and a abiding ability that helps absorb employees, from top managers to bank scientists, for decades. All of Novo’s drugs in late-stage testing are the fruits of centralized research, and the absolute administration aggregation has been with the aggregation at atomic 15 years. Chief Scientific Officer Mads Krogsgaard Thomsen abutting 24 years ago. Mike Doustdar, Novo’s arch of all-embracing operations, started as an appointment agent a year later. Chief Financial Officer Jesper Brandgaard-- a about newcomer -- has been at Novo back 1999.
Because of that stability, Novo abashed investors in April if President Kaare Schultz, in band to become CEO, abdicate to run Danish battling H. Lundbeck A/S. Soerensen had advised aboriginal retirement, but now expects to abide until his arrangement expires in 2019. Administrator Ando said the lath is aptitude adjoin an cabal as a almsman to advice assure Novo’s culture.
Lotte Bjerre Knudsen, a Novo researcher for 25 years, says the aggregation encourages bone on aggregate from decisions on biologic development to whether the aggregation cafeteria should serve approved Coca-Cola or abandoned Diet Coke.
“In added places you can’t allege up adjoin what the bang-up says,” said Knudsen, who helped ascertain Victoza GLP-1, a top seller. “That is absolutely adequate here. In this affectionate of business it’s absolutely a acceptable affair that you can say anything.”
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