Welcome to the Q3 2021 Novo Nordisk A/S earnings conference call. During the call, all participants will be in a listen-only mode, and afterwards, there will be a question-and-answer session. Today I'm pleased to present Lars Fruergaard Jorgensen, CEO. Please go ahead with your meeting..

Thank you very much. Welcome to this Novo Nordisk call regarding our earnings for the first nine months of 2021 and outlook for the year. This call follows the early announcement of the high-level results and raised guidance published on Friday last week. I'm Lars Fruergaard Jorgensen, the CEO of Novo Nordisk.

With me today I have Chief Financial Officer, Karsten Munk Knudsen; Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Sylvest; Executive Vice President and Head of North America Operations, Doug Langa; and finally, Executive Vice President and Head of Development, Martin Holst Lange.

All presenters will be available for the Q&A session. Today's earnings release and the slides for this call are made available on our website novonordisk.com. Please note that this call is being webcasted live and a recording will be made available on Novo Nordisk website. The call is scheduled to last for one hour. Please turn to the next slide.

The presentation is structured as outlined on Slide 2. Please note that all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified. The Q&A session will begin in about 25 minutes. Please turn to Slide 3. As always, I need to advise you that this conference call will contain forward-looking statements.

Such forward-looking statements are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, including the uncertainties around COVID-19, please see the Company announcement for the first nine months of 2021 and the slide prepared for this presentation.

Please turn to the next slide. In the first nine months of 2021, Novo Nordisk has progressed on all four dimensions of our strategic aspirations. I would like to highlight a few today. Within purpose and sustainability, we have expanded the Changing Diabetes in Children program.

It now includes three additional countries, Indonesia, Pakistan and Peru, to reach the total of 18 countries included in the program. This will support our aspiration of reaching 100,000 children and young people living with Type 1 diabetes in low-resource settings by 2030.

Today, the program is providing free care to 30,000 children, adolescents in low- and middle-income countries. Within our Circular for Zero strategy, we are excited that Novo Nordisk has received an award at the Climate Week in New York City. The award was given for our work in accelerating the global transition to 100% renewable energy.

Martin will come back to key milestones within R&D. But I would like to briefly share my perspectives. With initiation of two Phase III programs within obesity and other serious chronic diseases, we now have ongoing late-stage clinical trials within all of our therapy areas.

The Phase III initiation Ziltivekimab demonstrated our ability to successfully integrate the late-stage assets we acquired from Corvidia Therapeutics in 2020 into our internal clinical development programs. For commercial execution, we have progressed on all three strategic aspirations, specifically for obesity care. The initial U.S.

demand for Wegovy has significantly exceeded our expectations and underscore the high unmet need for people living with obesity. Camilla and Doug will elaborate further on Obesity and provide details on our other therapeutic areas later.

Lastly, leaving financials to Karsten, we are pleased with the sales growth of 13% and operating profit growth of 12% in the first nine months to 2021, both measured in constant exchange rates. With that, I'll give the word to Camilla for an update on commercial exclusion..

Thank you, Lars. And please turn to Slide 5. In the first nine months of 2021, our total sales increased by 13%. The sales increase was driven by both operating units with international operations growing 13% and North America operations also growing by 13%.

GLP-1 sales increased 30%, driven by North America growing 24% and international operations growing 47%. Insulin sales increased by 2%, driven by 6% growth in international operations, partially offset by an 8% sales decline in North America operations. The U.S. insulin sales declined by 9%, driven by a decline in volume and realized prices.

The latter driven by channel and payer mix as well as rebate enhancements. Obesity care sales grew 49% overall. In international operations, Saxenda sales grew 51%. And in North America operations Obesity care sales grew 48%. In the U.S., Obesity care sales grew 49%, driven by both Saxenda and Wegovy.

Biopharm sales increased by 4%, driven by North America operations growing 6% and international operations growing by 3%. Please turn to Slide 6. In line with our strategic aspiration of reaching 1/3 of the diabetes value market by 2025, our sales growth of 13% is faster than the overall diabetes market.

And hence we have improved our market share by 0.7 percentage points to 29.9%. This increase reflects CLP-1 growth of 30% and market share gains in both operating units. Currently Ozempic has been launched in 67 countries and Rybelsus in 23 countries. Please turn to Slide 7.

In international operations, diabetes care sales increased by 14% in the first nine months of 2021, driven by all geographies and therapy areas. GLP-1 sales increased by 47% in the first nine months of 2021.

Novo Nordisk remains the market leader in international operations with a GLP-1 market share of 57.5%, reflecting an increase of 4.7 percentage points compared to one year ago. This is driven by share gains across geographies and overall GLP-1 share growth in international operations of 73.6%. Please turn to the next slide.

Biopharm sales grew by 4% in the first nine months of 2021. This was driven by 6% sales growth in North America operations and 3% sales growth in international operations. Rare blood disorders grew by 7%, driven by uptake of our launch products Esperoct and Refixia, as well as NovoSeven and NovoEight.

Specifically Hemophilia A products grew by [20%], Hemophilia B sales by 26% and NovoSeven by 2%. rare endocrine disorder sales were flat. The unchanged sales reflect international operations increasing by 6%, offset by North America operation decreasing by 10%. And now over to Doug for an update on U.S. GLP-1 and Obesity care..

Thank you, Camilla. Please turn to the next slide. The U.S. GLP-1 volume market growth is around 30%, comparing Q3 of 2021 to Q3 of 2020, driven by once weekly injectable GLP-1s as well as Rybelsus. Novo Nordisk new-to-brand market share leadership is now 63.7%, driven by continued uptake of Ozempic and Rybelsus.

Additionally, Ozempic remains the NBRx market share leader within the injectable GLP-1s. And measured on total scripts, Novo Nordisk remains the market leader with more than 50% market share. Please turn to the next slide. In the U.S., Rybelsus' total prescription trajectory continues to steadily increase, now above 40,000 prescriptions per week.

Since mid-May, our sales force has been fully back out in the field. And Rybelsus was the second largest contributor to growth for Novo Nordisk in the first nine months of 2021. And if you look at the U.S. specifically, Rybelsus accounted for 36% of the growth in the first nine months of 2021.

Furthermore, leading indicators such as prescriber breadth, HCP awareness, and sourcing from outside the GLP-1 class remain encouraging. Importantly, we are confident in the product and its long-term potential.

Don't forget that the -- that within the pioneer program Rybelsus demonstrated itself as the most efficacious OAD on the market as measured on A1C and weight. Now outside of the U.S., Rybelsus now has been launched in 22 countries with one key market being Japan where Rybelsus has reached a 0.9% modern OAD value market share.

While underlining parameters are on track, it should still be noted that Japan was in a third COVID-19 lockdown until the end of September, which has made it difficult for patients and sales forces alike to reach doctors. Please go to the next slide.

Globally Obesity care sales increased 49% with 48% growth in North American operations and 51% in international operations. As Lars mentioned earlier, the U.S. launch of Wegovy has significantly exceeded our expectations, underlining the high-met need for people with obesity.

This has put the supply chain under pressure and patients may temporarily experience a delay in getting prescriptions filled throughout 2021. We continue gradual increase in supply and expect to be able to meet demand in early 2022, of course depending upon demand. The initial feedback from patients and prescribers continues to be encouraging.

19 weeks after launch Wegovy has already surpassed Saxenda weekly script levels, reaching around 17,000 scripts per week. More than 70% of Wegovy prescriptions are new to the anti-obesity medication class. Thereby Wegovy is expanding the branded anti-obesity market. Market access has progressed since launch.

And three national payers have now unblocked Wegovy from their national formulary. We are excited to share that commercial formulary access is now around 60% for Wegovy compared to around 80% for Saxenda. Outside the U.S., Wegovy has been submitted for regulatory review in Japan. And we expect a decision from EU authorities before year's end.

Now over to you, Martin, for an update on R&D..

Thank you, Doug. In line with our COVID strategy to strengthen treatment options in Obesity and addressing an identified unmet need, we have initiated the first of three trials in the global Phase IIIa OASIS program, which has planned to enroll approximately 1,000 patients in total.

The 68-week OASIS 1 trial will investigate the efficacy and safety once daily oral semaglutide 50 milligrams in 660 people with obesity, all overweight together with [indiscernible]. Our expectation is to achieve an efficacy and safety profile similar to that of Wegovy.

Within other serious chronic diseases, we are taking an important step to establish a standard lone presence within cardiovascular disease, specifically within Atherosclerotic Cardiovascular Disease or ASCVD. A significant residual unmet need remains despite the availability of many treatments.

Therefore in September of 21 we initiated the Phase III cardiovascular outcome trial called ZUES with the CVD asset that we have named Ziltivekimab, which we acquired from Corvidia in -- back in 2020.

In brief, Ziltivekimab is a monoclonal antibody directed against IL-6, and is aimed to address the residual inflammation in patients with ASCVD as well as chronic kidney disease.

The trial will assess the efficacy and safety of subcutaneous Ziltivekimab 15 milligram in around 6,200 patients with established ASCVD, chronic kidney disease and systemic inflammation. This will be an event-driven trial, which is expected to complete in 2025.

As we previously discussed and as Lars also alluded to, with the initiation of these two Phase III programs in the third quarter, we now have ongoing Phase IIIa clinical programs within all of our therapy areas. Please turn to the next slide. Now turning through the high-level R&D milestones, we start with the third quarter of '21.

Within diabetes, we completed a Phase I trial with glucose-sensitive insulin called NN1845. In the trial, the asset appeared to have a safe and well-tolerated profile, and demonstrated proof of principle of glucose-sensitive properties.

We're currently evaluating further development of glucose-sensitive insulin to optimize the pharmacokinetic properties of this acid. It goes without saying that this is an area that requires multiple short-term goal, and we are actively exploring these in our research areas.

Within other serious chronic diseases, as we have just discussed in, we initiated Phase III cardiovascular outcome trial for Ziltivekimab. Within NASH we completed a Phase II trial in Q3, investigating the efficacy and safety of Semaglutide 2.4 milligram in people with NASH F4 cirrhosis.

While the trial demonstrated significant and clinically relevant reductions in the level of fibrosis, it did not manage to demonstrate an effect of Semaglutide in the primary endpoint of fibrosis in this population. Semaglutide appeared to have a safe and well-tolerated profile.

A consequence of these results, we have decided that Semaglutide will be further developed for F4 cirrhosis patients as part of combination therapy only. To this effect, two combination trials have been initiated within NASH F4. One, as previously mentioned in collaboration with Gilead and one in combination with our internal assets.

It's important to mention, and as previously discussed in Q2, that Semaglutide in monotherapy appears to be a very effective and potentially interesting treatment for patients with NASH F2 and F3. And this is currently being investigated in Phase III under an FDA breakthrough designation.

Towards the turn of the year we expect an opinion from the EU on Semaglutide 2.4 milligram in obesity and Ozempic 2.0 milligram in diabetes. Within Biopharm, we expect results from the Phase III program for somapacitan in children, as well as results from cohorts of the ongoing combined Phase I/II trial with Mim8.

As planned, we will initiate baseline for the Phase III program with Mim8 in Q4 in at-risk, while still awaiting the full results from the Phase I/II trial. This aligns with the innovative and fast as well as ambitious clinical development program that we have previously talked about for Mim8.

In the first half of '22 we expect Phase IIIa results for insulin Icodec in diabetes, as well as for Concizumab and the full resource for Mim8 in Biopharm. We also expect to see the initiation of the Phase III program for CagriSema in Obesity. With that, over to you, Karsten..

Thank you, Martin. Please turn to Slide 14. In the first nine months of 2021, sales grew by 8% in Danish krone and by 13% at constant exchange rates. The gross margin declined to 83% compared to 83.8% in 2020. The decline reflects a negative currency impact of 0.5 percentage points, lower realized prices in the U.S.

and amortization of intangible assets related to the acquisition of Emisphere Technologies in 2020. These are countered by a positive product mix, driven by increased GLP-1 sales and productivity improvements, in line with the strategic aspiration of driving operational efficiencies.

Sales and distribution costs increased by 10% in Danish krone and 14% at constant exchange rates. The increase is driven by investments in our key strategic priorities, most notably launch activities and promotional spend for Rybelsus and Ozempic as well as market development activities for Obesity and investments in the U.S. launch of Wegovy.

Research and development costs increased by 11% in Danish krone and 13% at constant exchange rates. The increase is driven by pipeline expansion and diversification, including progression of the pipeline within cardiovascular diseases and NASH.

Administration costs increased by 4% in Danish krone and 6% at constant exchange rates, impacted by a low spend in the first nine months of 2020 due to COVID 19. Operating profit increased by 5% in Danish krone and by 12% at constant exchange rates. It was positively impacted by the amortization of the priority review voucher for Wegovy in the U.S.

in the third quarter of 2020. The negative currency impact on operating profit is partly offset by around DKK1 billion in hedging gains under net financial items. This compares to a loss of around DKK1.8 billion in the first nine months of 2020. The gains on hedge currencies primarily related to the U.S. dollar.

Net profit increased by 12% and diluted earnings per share increased by 14% to DKK15.98. Free cash flow was DKK52.3 billion compared to DKK41.6 billion in 2020. The increase reflects the higher net profit, timing of rebates in the U.S. and favorable impact from changes in working capital.

Further, it is positively impacted by lower intangible investments related to the acquisition of Corvidia Therapeutics impact in 2020. Next slide, please. We now expect 2021 sales growth to be between 12% and 15% at constant exchange rates.

The raised guidance is based on the performance seen in the first nine months of the year and reflects expectations for continued sales growth in both international operations and North America operations. The updated outlook reflects higher-than-expected Ozempic market share gains, GLP-1 market growth and Obesity care sales, all mainly in the U.S.

It also reflects intensifying competition within both diabetes care and Biopharm. Finally, continued pricing pressure within diabetes care, especially in the U.S. is expected to negatively impact sales developments.

Operating profit is now expected to grow between 12% and 15%, reflecting the sales growth outlook and continued investments in current and future growth drivers. This includes the continued rollout of Ozempic and Rybelsus, the launch of Wegovy and associated market development activities.

Furthermore, additional resources are being allocated to both early and late-stage R&D pipeline activities. Given the current exchange rates, most notably a strengthening of the U.S. dollar, we expect a less negative currency impact for the full year compared to three months ago.

Consequently, our reported sales and operating profit growth is now expected to be 3 and 4 percentage points lower than at constant exchange rates respectively. For 2021, financial items are now expected to be a gain of around DKK0.3 billion, mainly reflecting gains associated with foreign exchange hedging contracts.

Capital expenditure is now expected to be around DKK7 billion in 2021. Lastly, free cash flow has increased by DKK5 billion and now expected to be between €44 billion and DKK49 billion. This reflects a favorable impact from higher sales and net profit expectations, timing of U.S. rebates in the U.S. and lower capital expenditure.

Based on the increased expectations for cash flow generation in '21, the Board of Directors has approved an expansion of the 2021 share repurchase program by DKK2 billion to DKK20 billion. That concludes the outlook for '21. Now back to you, Lars, for final remarks..

Thank you, Karsten. Please turn to the final slide. We are very pleased with the sales growth in the first nine months of 2021. Sales growth was driven by all geographical areas within international operations as well as North America operations and by all therapy areas.

In particular, the sales growth was driven by an accelerated growth of our portfolio of GLP-1 treatments for diabetes and Obesity care. The strong financial performance in the first nine months of 2021 has enabled us to raise our outlook for the full year.

From an R&D perspective, the two Phase III program initiations within Obesity and other serious chronic diseases highlights that we continue to expand our late-stage clinical pipeline. With that, we're now ready for the Q&A where I kindly ask all participants to limit her or himself to one or maximum two questions.

Operator, we're now ready to take the first set of questions, please..

[Operator Instructions] Our first question is from Wimal Kapadia of Bernstein..

Wimal Kapadia from Bernstein. So can I just first ask a little bit more about '21 guidance and the implications heading into '22. So the top end of the sales range for '21 suggests the potential 4Q sales growth of over 20%.

So can you just first discuss the dynamics that could potentially get us to that level of sales growth in the quarter? And then tied to that, what are the implications for this level of growth heading into '22.

And outside of the 340 befit which annualizes, and possibly VBP, are there any other reasons why underlying growth should not be stronger next year given the Wegovy supply constraints that will be resolved. And I'll leave it there..

Thank you, Wimal.

And Karsten, while not guiding for '22 yet, can you talk a bit to lending this year and some of the building blocks for how to look at growth for next year?.

Yes. Absolutely. Thank you, Wimal for that set of questions. So first, looking at 2021, as you saw then we delivered 13% sales growth in the first nine months. And mathematically of course it's hard to move the needle with only one quarter to go.

So as a starting point, I think you should anchor yourself in the 13% and then look at the run rate we delivered in the third quarter, benefiting from the GLP-1 acceleration as well as the Obesity performance. So for '21, I think the starting point is more around the midpoint of our guidance range being around 13.5%.

The reason why we choose to go with a slightly broader-than-normal guidance range is basically the volatility we've seen in our business over the past few years as well as also the volatility linked to the Obesity business. So that's basically the reason for the guidance range. But the starting point would be the midpoint of the range.

Then moving into 2022. Then from a strategic point of view, we are pursuing a growth-focused strategy. And when you look at the growth rate for Novo Nordisk as a company, we are clearly outpacing the industry potentially close to double up in terms of top line growth compared to the industry at large.

So clearly growth is a top priority for us as a company. 2021 was an exceptional year for us in terms of growth rates. Everything has pretty much gone well. So really a highly successful year to start on. And we do continue to pursue growth into 2022 at a very attractive level, driven by our GLP-1 business as well as our Obesity franchise.

In terms of puts and takes, I would though caution you in terms of a couple of specific aspects. First of all, we are currently getting closer to a conclusion on the volume-based procurement tender situation in China. We have not yet received the final bidding documents, but we expect to receive them shortly.

And with insulin in China constituting to the tune of 9% of group sales, then this tender situation, we do expect to have a significant negative impact on our group sales in 2022 as one piece. Secondly, what we do benefit from in '21 is the 340B distribution policy change we did in the U.S.

market, where we basically restricted distribution under the 340B program to covered entities. There we are getting a benefit. And as we've said in prior quarters, and there are no changes to that this quarter, then we're getting a benefit. It's less than 3% of U.S. sales, but I'm just reminding you that even 3% of U.S. sales is 1.5% of group sales.

So with that in the base, we would not get that growth benefit in 2022. And then finally, what we're benefiting from now is also an acceleration in the GLP-1 market in diabetes in the U.S., but also outside the U.S. we've seen in Q3, as you heard, to the tune of 30% volume market growth in the GLP-1 segment.

That acceleration and looking at some of the more weekly trends, we do expect that acceleration to slow down and getting back to a more normalized growth level in the whole GLP-1 market when we get into 2022. So you have to adjust for those factors. But needless to say, we do continue to push for attractive growth for our shareholders..

Strong growth for a couple of factors to begin for the short term..

Our next question is from Peter Verdult of Citigroup..

Peter Verdult of Citi. Two questions. Firstly, just Camilla or Doug, appreciate the update and comments on reimbursement access. Just one clarification. Should we still be thinking that when it comes to Wegovy prescriptions, 50% are reimbursed versus -- and 50% are effectively given away as part of the Novo assistance programs.

I wanted to make sure whether that's the right way of thinking about it going forward. And then secondly, for Lars and Karsten, just the -- any comments you're willing to give realizing that things are subject to change. But on the drug pricing amendments announced overnight in the U.S. they've enacted and the donut hole discount is removed.

That looks like a big win for Novo, but more pragmatic long-term would be mandatory price cuts for semaglutide before the IP expires. So realize nothing is set in stone. I realize you're not going to speculate. But I don't think you'll be remiss of me not to ask you for some initial thoughts on those developments..

Thanks, Peter, for those questions. Doug initially on, say, the book of business in the U.S. on Wegovy, and then I'll cover the drug price reform afterward..

Yes. Thanks, Peter, for the question. So overall, progress has been made. And we're happy with the progress with the overall commercial formulary access for Wegovy. And broadly speaking, we're looking at 40% to 60%, 40% coverage, 60% not covered..

Good. And you alluded a bit to it, Peter, yourself that it's difficult to speculate about the U.S. health care reform. Just noting over the past couple of weeks I think a rhetoric has been going forth and back. So we would like to have, say, the final text before we start assessing the impact on us.

Having said that though, we strongly welcome anything that help the patient's out-of-pocket situation because the complexity of the system ends up with a lot of patients struggling. As you know, we -- a couple of years back put some affordability programs in play to take some of that pain away, and there was also a cost to that.

So anything that can smoothen out the system and help patients better is obviously good for the patient, but I think it's also going to be pretty good for our business. But we need to see the final text before we comment on that. So hopefully when we talk a quarter from now, there's more clarity on that..

Our next question is from Simon Baker of Redburn..

2, if I may, please. Firstly, on Biopharma, the quarter did look a little weaker than consensus was expecting. You did allude to Chinese destocking impacting hemophilia.

I just wonder if there were any other factors you would highlight maybe given the exposure to the tender market in Biopharma, any timing of tenders that were different to what you were expecting? And then secondly, on Capex. I see you just trimmed the CapEx guidance slightly for '21.

I just wonder if you could give us any color on that and any implications for the CapEx outlook going forward into '22 and beyond?.

Thank you, Simon. So two questions to you, Karsten. Firstly, on the Biopharm performance in the third quarter, not lower than what we saw in the beginning of the year. And then CapEx also a bit lower compared to what we have seen before.

Any perspectives on that?.

Yes. Thank you, Simon, for that set of questions. And starting out with Biopharma, I'd just like to remind you that the Biopharm business is a more volatile business than the rest of our businesses in diabetes. So kind of awe-interpreting on the quarters is dangerous on Biopharm.

So you should more be looking at biopharm on a year-to-date basis, growing some 4%, which we're actually very, very satisfied with. To give you a little bit of flavor on the quarter though, I'd say, we did have some changes in shipment timing on the hemophilia side in international operations impacting the quarter.

And in the U.S., we did have some minor adjustments to rebate estimates that impacted our growth hormone franchise. So again, the more kind of informative measure would be our year-to-date performance, which we're very satisfied with. As to CapEx, it's a slight fine-tuning. That's nothing substantive around it.

It's -- the adjustment is basically linked to phasing of the execution of our cash burn on our ongoing CapEx programs. So there are no delays or anything in our programs. It's purely, you would say, exact timing on cash flow. Nothing more than that..

Thank you, Karsten. And on CapEx, it's clear that with the momentum we see right now, we are probably going to spend more money compared to less money on CapEx because it's a really, really strong growth. And obviously we need to make sure we have capacity to support that..

Our next question is from Michael Leuchten of UBS..

It's Michael Leuchten from UBS. Two questions, please. One, Karsten, just going back to the guidance, the implied OpEx growth in the fourth quarter is pretty punchy. And certainly, as the year has progressed, you seem to sort of have walked up the OpEx phasing into the business as the top line outlook has improved as well.

In the fourth quarter, where is that incremental investment going? And what implications does that have as a run rate as we think about 2022, if you could? And a question for Doug. Looking at the value of the volume of Rybelsus, it looks like it stepped up. I presume that's the co-pay card rolling off.

If that's the case, timing is interesting here, if Rybelsus really is the product that longer-term is sort of meant to carry the torch, why would you pull the co-pay program at this point in time, if that's indeed what is driving the value of the volume?.

Ladies and gentlemen, please hold. We're experiencing some technical difficulties. [Technical Difficulty].

Ladies and gentlemen, thank you for your patience. We have now reconnected. Our question was from Michael Leuchten of UBS..

So Michael, I'm not sure when the technology went down.

So did you hear Karsten's answer? And did you hear Doug's answer?.

No, sorry, it cut off entirely before that..

Okay. So let's try again. So the first question was on guidance for OpEx growth in fourth quarter. So Karsten, if you can talk to that. And then secondly, Doug will talk to how we see Rybelsus launch and also how we look at co-pays, et cetera..

Yes, absolutely. Thanks, Michael, for that set of questions and apologies for technical glitch. So when you look at the OpEx into the fourth quarter, it's of course the same principle we're applying for our resource allocation.

And just the main nuts and bolts is basically we continue to invest in R&D, where we are now exceeding 35,000 annualized patients on clinical trials. So all-time high in global development, so continued increasing investments in R&D, which of course you should expect into 2022 also.

And in our commercial investments in [R&D], we are continuing to invest in growing and expanding our GLP-1 business in diabetes as well as market development as well as we go with launch activities in Obesity. So the same principles applies. And in terms of run rate into fourth quarter.

I don't see it as too dissimilar from the run rate we've seen thus far this year. And then, of course, you shouldn't technically do your forecast, as I know you know, based on one quarter into next year. But it's the same principles that we're rolling into next year.

So aggressive growth investments in commercial and expansion into a broader and more diversified pipeline in R&D..

Thank you, Karsten. Doug, on Rybelsus' performance in the U.S..

Again, Michael, thank you again for that question. Overall, we do consider it still a very successful launch for Rybelsus overall. And despite some of the lockdowns that we've experienced with COVID-19 last year into this year, as I mentioned, the field force is back in since mid-May. We still consider it a successful launch.

Are we where we want to be? Well, again, based on what I said earlier, we can't forget that through the pioneer program Rybelsus demonstrated itself as the most efficacious OAD in the market. So we're still very bullish on the long-term aspect of what Rybelsus can do.

And we have a lot of leading indicators which help us be encouraged with this, whether it's -- again, if you look at the growth overall, as we said it was the second biggest growth driver for the Company, 36% of the growth in the U.S., we delivered over 180% growth.

But maybe more importantly, other leading indicators such as breadth and depth, brand awareness, brand preference, we're still seeing over 80% of the business come out of the GLP-1 category outside of the GLP-1 category. Other things like we're doing 40,000 prescriptions per week. And again, we have a significant number of writers, over 45,000.

So these are all indicators that we're still very bullish on what we can do over the long haul..

Our next question is from Emmanuel Papadakis from Deutsche Bank..

Maybe I could just come back on Wegovy, the 40-60, sounds like it's I guess, you could say, deteriorated, if anything, in Q2 as there is more subsidized products out there.

How is that evolving through Q4? When do you expect we'll be at a stage that the copay support is fully rolled off, that likely be by the front end of Q1? And what kind of impact are you expecting that to have on the launch once you've normalized the supply situation? And then just a question on the commercial access.

You disclosed the first time 60%.

Can you talked to us a little bit about the levels of utilization management within that, are they similar to Saxenda? Are you seeing any significant differences? And how do you expect those to evolve into '22 as well?.

Thank you, Emmanuel. Let me try to address the Wegovy. So our strategic priorities have been to really mobilize patients to seek care, to get physicians to prescribe antiobesity medicine and get payers to reimburse Wegovy.

And you shouldn't get too deep into short-term commercial tactics in how we do that and make that a proxy for the future because the fact that we have had this bridging program has indeed helped us to mobilize patients and get physicians to prescribe it. And the clinical profile of Wegovy has attracted a lot of attention from the payer.

So now we have the three big PBMs supporting it. And then you can say, as launch progresses we can gradually start considering a different promotional mix. After six months, you can, for instance, do DTC in the U.S., which you cannot do in the beginning. So there you need to use a copay or the bridging program to gain patient experience.

So we are quite agile in how we look at this promotional mix and short-term book of business, whether it's on commercial covered patients or its three patients, doesn't really matter for us. It's about getting this market and the brand going. And from everything we can see, we are succeeding in doing that.

So Doug, a few more perspectives on how the commercial access works..

Yes. So just to answer, Emmanuel, the very specific question you had. It is very similar to utilization management to Saxenda. And importantly, there's no step-through. So that's important. And then overall, again, as I mentioned earlier, we have 60% overall formulary access, and that's progressing nicely.

The team is also doing a really nice job in terms of the opting component with employers. I can't get any specifics there, but again, that's progressing nicely. Remember, this is still not considered a standard listed product, formulary products. So we have some work to do there. But the team is working hard.

And as Lars mentioned, we have all three major PBMs on board. That's a really good sign. And we have partnerships with several of them in weight management programs, which is also another very good sign. So overall, I think progress is being made..

Our next question is from Steve Scala of Cowen..

You noted that you expect Wegovy's supply to meet demand in early 2022. What level of demand does this imply based on your expected supply? So for instance, is it closer to 2x more, 10x more or 25x more? And then secondly, similar question to ones that have already been asked, but a little different version, what percent of the U.S.

population can access full coverage of Wegovy today? And what might that percent be at the beginning of 2022?.

So thank you, Steve. So we have our own forecast in how we model demand. And unfortunately, we're not in a position to be able to share that. But we believe that based on how we understand the market, the flow of patients that we can match that demand. But of course, we have been surprised initially here.

So we do not know much more than you do in terms of what the real demand will be, but we feel comfortable that we can help the patients in need of antiobesity medicine. And Doug, on the second question in terms of which percentage of the U.S. population is within reach..

Yes. Thanks for the question, Steve. In any end, it's important to note that we still don't have Medicare coverage, so that takes out a significant portion of the population.

We're working really hard, and we hope to, at some point, whether it's through the Treat and Reduce Obesity Act or some policy change and other policy change to open up that because as a company we certainly think that seniors in the U.S. should have access to anti-obesity medications. I mean that's clear.

Today, again, so if you just take a look at the commercial access and where we are, we think around 16 million to 20 million people -- patients living with obesity have access. And again, our aim is to get that much more like other products, standard list of products. So our aim is to get much higher, and that's going to take some work.

But today, around 16 million to 20 million people today..

Thank you, Doug, and [indiscernible]..

Our next question is from [Karsten Lundberg] of SEB..

I have a couple of questions here to Martin, I guess. The OASIS program for [indiscernible] in Obesity, you have three trials in this program in total. One China patients, one Japanese patients, one with European and North American patients combined. Is this a sign that you only need one trial to get this product approved in the U.S.

with the North American patients? Or can you leverage something else on top of this? And then for Sema in Alzheimer's, I know it's not so long ago since you actually initiated the Phase III trial.

But could you maybe share some of the feedback you have had in terms of appetite to get enrolled on this trial in the Alzheimer's community?.

Thank you, Karsten. Over to you, Martin, first on OASIS trial design, number of trials needed, et cetera..

Yes, absolutely. So as you mentioned, on OASIS, it's a fairly SLIM program, 1,000 patients in total, which obviously also indicates that we have agreed with regulatory authorities that we need to bridge based on the data that we already have on Semaglutide.

And we are in a good position that we're both on subcutaneous and oral and also on the different doses, now also on oral have a lot of data with which we can bridge to satisfy the regulatory requirements. On the Alzheimer's trial, it's still early days.

As you can probably imagine, we are screening a great number of patients, but the screening period in and of itself is three months. So at this point in time, what we see is that the sites that are opening up and running actually screening and recruiting to the level where we would expect them to be or a little bit above..

Our next question is from Martin Parkhøi of Danske Bank..

Martin Parkhøi of Danske Bank, also two questions. First for Lars, you were quoted on various news medias about China that you expect this to be a onetime effect with a potentially significant haircut to pricing.

But how do you state now that it will only be a onetime effect, for example, going into -- right, you're seeing 35% growth in your insulin, long-acting insulin franchise in China.

Do you feel comfortable that after a big price cut then you can continue on this journey with Tresiba in China? Or isn't that the risk that this could be a controlled tender market? And then second question, I think, will be for Doug. Just on -- again, on Wegovy and [indiscernible] in U.S.

You say 60% are on it for free, but you also call it, of course, it's called the bridge card because you're making a bridge onto these patients, hopefully you should get coverage. But I also know that some are able to get the drug even though they don't fit into that category.

But how many of these 60% will actually have coverage when their six-month period are in?.

Thank you, Martin, for those two questions. And let me start on China. And obviously I don't know for sure what will happen to China because I'm not in charge of that. But if you look at the whole intention about the [VPP], that was to bring the pricing of drugs in China down to the international level. And there are a number of drug categories.

So I feel that it's a rational attempt by the authorities in China to get to the right price level. And then there's a keen interest in bringing innovation to China, accelerated regulatory revenue, et cetera. And of course, if it turns into a very hostile pricing environment, I don't think the authorities are creating attractive market for innovation.

So at least for now we feel comfortable about that. And Doug, once again, on Wegovy..

Thanks, Martin, for the question. So the intent of any of these early initiations or bridge programs is to build awareness, get initiation of use. We can -- physicians can see results. And again, for us, the bridge program was designed to be screened for people that had coverage. Now again, it's not a perfect system.

Based on the demand, it was probably one of our most successful programs that we've launched. So -- but it would -- I don't have -- we don't have the exact specificity to know how many coming off that program would exactly have coverage. But again, the intent was, you start them, and then they would have coverage when they come off of it..

Our next question is from Jo Walton of Crédit Suisse..

I've got two questions. If we could go back to your confidence in the lack of -- in the fact that the GLP market growth of 30% will ease off next year. I just wonder why that is.

Is it just a law of large numbers? Or is it perhaps that particularly for your products you're seeing some extra obesity use with Ozempic, which will presumably disappear next year when Wegovy comes in. So we don't need to be -- we need to be sure that we're not double counting.

And secondly, I wonder if you could tell us a little bit about how long people are staying on Ozempic these days. I think the data that we have is that the stay rate on all of the GLPs is still pretty poor, less than six months or so for many patients.

Have you been able to make some progress there?.

Thank you, Joe. Karsten first. Obviously difficult to protect the future GLP-1 marked growth. So can you put a bit more color on your comments that we are right now seeing a higher level than we have seen in the past? And then Camilla can talk to stay time on Ozempic..

Yes. Thanks, Jo, for that question. And of course it's a forward-looking statement. The reason why I pulled it forward was when you look at actual NBRx scripts on a weekly basis, we saw a significant step up, I would say, in June or so if you take the U.S. market data, absolute number of NBRx in the GLP-1 market segment, most notably on Ozempic.

After that step up, actually the trend has been fairly similar to what we saw before the step up. So we don't see a continued step up, but more like a normalized growth rate during the third quarter and into the fourth quarter as well..

Thank you, Karsten.

Camilla, stay time?.

Yes. So on stay time, we actually do have a stay time that from the latest data we have is close to around, roughly speaking, more than 15 months on Ozempic. We do think that this is, in general, just a quite significant stay time, and people are -- we know that we can get 80% of people in good control from our clinical trials.

So I think that covers that..

I think we are homing in on the last set of questions. Perhaps, two, depending on the length of the answers..

Our next question is from Kerry Holford of Berenberg..

Yes, [3 for me, please]. Firstly, just going back Wegovy. I would be interested to see what proportion of the 60% of covered [indiscernible] have the employer opt-in effectively granted.

And also to understand whether you're finding any debate in your pricing and [indiscernible] negotiations for that obesity outcomes data, how much further do you think you can expand Wegovy access essentially ahead of that readout [indiscernible] back end of '23? And then just quickly on Mim8.

What's giving you the confidence to move forward to start Phase III this quarter? Have you see that lead out of the Phase I/II..

Thank you, Kerry. So Doug, first, a perspective on, as I understood it, in the commercial sector how many employers are opting in..

Yes. So we don't disclose that. But generally speaking, we do have a, I would say, a large number of employers that have opted into where we have coverage today. And our aim is to continue to work. We have a regional account team that's out there every day working hard as well as an employer team.

And again, it's an important component to building the overall access and affordability, quite frankly, over the long haul..

And if I just should give a very quick answer to the question on the outcome data and health technology assessments, et cetera. So we actually see that payers today with what Wegovy can deliver, see that there's value in the product. So I don't think we have a situation where we need to see [COT] data for the case to be intact for weight loss, yes.

And Martin, on my Mim8..

Yes. So as you know, we've designed a fairly ambitious development program, where we tried to go from first human dose to basically submission in a matter of four years. That requires some assumption, and it requires a little bit of initiating things, including our Phase III trial at risk.

We do obviously continuously monitor the different cohorts that read out in the ongoing Phase I/II study. That basically means that we know about the safety of the drug in that space. And we do also have some preliminary efficacy readout in the earlier calls.

So far we've seen nothing that would discourage us from going into Phase III, which is why we are continuing to pursue our plan..

And we'll take one final set of questions, please..

Our final question will be from Sachin Jain of Bank of America..

Just a couple of clarification questions, please. As I first go back to Rybelsus, sequential growth in the U.S. to [indiscernible] Michael's question, it grew sales 40% versus prescription volumes, 15% sequentially.

Just to clarify, do you expect sales to grow ahead of scripts going forward as co-pay programs come off? And secondly, a follow-up on the GLP-1 growth outlook for next year. Noting you have a competitor launch [indiscernible] which you've historically said would accelerate in the market.

So just to clarify how we think about 22 GLP-1 growth given that new launch, is that normalized market growth for a share loss of a competitor? Or do you think that product accelerates the market?.

Thank you, Sachin. Karsten, can you try to put some color on both questions, both, say, value per script on Rybelsus? And then what more you can give on GLP-1 market outlook..

Yes. So thank you, Sachin, for that set of questions. First of all, on Rybelsus in the U.S. and the delta between scripts and ex-factory and realized ARP. I think the key point is, as we showed in the earlier slide, then we actually have a very, very stable TRx uptake curve in the U.S., and Doug was talking to that.

So I think the more meaningful measure on Rybelsus is basically to look at the stability of the TRx curve. And then individual quarters are impacted by -- it could be minor inventory movements either this year or last year, et cetera.

So I think I would peel that away and say, look at the TRx trending and look at our year-to-date numbers, that's a more reflective way of looking at Rybelsus. As to GLP-1 market growth, then, yes, what we've seen historically is that the launch is beneficial to the market.

But you can [indiscernible] launch mid next year, that of course what we've seen in GLP-1 is that it has been a market expansion strategy on our side and also on the [indiscernible]. I don't know their strategy, but presumably it would help expand the markets..

Let's sneak in one final, absolute final question or set of questions..

Our final question will be from Richard Vosser of JPMorgan..

I'll just do one. And it's just looking at the obesity franchise in a bit more big picture for fourth quarter.

So how should we think about the development of that franchise? Do you think you could already see the franchise double relative to fourth quarter '20 given improving [indiscernible] supply, given what we can see in the script as Wegovy probably doubling in the U.S. and strong continued growth of Saxenda ex-U.S., just your thoughts there..

Thank you, Richard. So I can unfortunately not go into guiding on Obesity. But of course, you raise a good point that we see a very, very strong uptake of [indiscernible] in the U.S., better than anyone, I would say, have anticipated. It's not on -- based on cannibalization of Saxenda, which is holding up nice in the U.S.

and we see that Saxenda is accelerating its position outside of the U.S., so very strong growth actually to the same degree as we see in the U.S. in international operations.

And we see a number of markets where Obesity is moving being reimbursed because health care systems acknowledge the need for having anti-obesity medicine, not least coming out of a pandemic where it's clearly established that living with obesity is a risk factor if you catch COVID-19.

So we are very encouraged in terms of the three priorities I mentioned, mobilizing physicians to prescribe, mobilizing patients to seek care and also increasingly having payers to acknowledge the need for antiobesity medicine. So I think that holds well for the future growth. And in due time, we will clarify with you what our aspirations are.

But for now, it is at least to double it by 2025. And we feel comfortable we can do that. So with that, thank you all for your participation. This concludes our earnings call. And if you have more questions, feel free to reach out to our Investor Relations, and looking forward to meet you sometime soon in the future. Thank you very much. Bye-bye..