Novo Nordisk Q4 profits jump but outlook lowered

COPENHAGEN, Denmark (AP) — Danish pharmaceutical company Novo Nordisk A/S on Wednesday said fourth-quarter profits soared 70 percent on strong sales, but lowered its outlook for the coming year due to competition from generic drug makers and healthcare reform in the U.S. and Europe.

The world's biggest insulin maker said net profit in the last three months of 2010 reached 3.95 billion kroner ($724 million), up from 2.32 million kroner in the same period of 2009.

Quarterly sales rose 23 percent to 16.12 billion kroner ($2.96 billion) from 13.06 billion. The cost of sales and distribution, meanwhile, rose 24 percent to 5.27 billion kroner.

Despite the quarterly gains, Novo Nordisk lowered its outlook for 2011, saying it expects sales to grow 8-10 percent in local currencies, due to tougher competition from generics and healthcare reform in the U.S. and Europe. Three months ago it forecast a sales growth of 11-12 percent this year.

Company shares dropped 2 percent to 609 kroner ($111.65) in Copenhagen after the release of the earnings report.

Sydbank analyst Soeren Loentoft Hansen said lowering the outlook and a full year net profit below market expectations of 14.6 billion kroner ($2.70 billion) "can explain the drop. It was a bit disappointing."

The Copenhagen-based company said its full-year net profit increased by 34 percent to 14.40 billion kroner from 10.77 billion kroner in 2009. Organic sales grew by 19 percent, driven by its new diabetes drug Victoza, among others.

However, "2010 was a very good year for Novo Nordisk with strong organic sales growth," Chief Executive Lars Rebien Soerensen said in a statement. "We expect continued sales growth from these products."

Sales of modern insulins, human insulins and protein-related products in 2010 increased by 17 percent to 40,642 million kroner compared to 2009. The company said it held 51 percent of the total insulin market.