Novo’s CEO has told Fierce that the company remains on the hunt for deals that “close some of the gaps” in its pipeline, as the Big Pharma reports billions of dollars in impairment charges from a string of recent clinical misses.
In its third-quarter earnings results, Novo disclosed 15 billion Danish kroner ($2.2 billion) in major impairment charges. Over two-thirds of this came from pipeline missteps, including 4.6 billion kroner ($690 million) from the failure of the cardiovascular drug ziltivekimab and 4 billion kroner ($600 million) from scrapping the obesity hopeful monlunabant.
The charges meant that, despite seeing adjusted operating profits grow 27% in the quarter—driven by a strong rollout of oral obesity drug Wegovy—the company still saw reported operating profits drop 9%.
On a call with journalists this morning, Novo’s Chief Financial Officer Karsten Munk Knudsen said the charges—which also included 4.1 billion kroner ($620 million) for righting the pharma’s manufacturing network—were all one-offs.
“If anything, I would say it leaves us with a much cleaner balance sheet and hence a better runway going forward,” added Knudsen, who Novo announced this morning would be leaving the company at the end of the year.
The third quarter was a period of significant change at Novo, including a major rebrand and a Capital Markets Day in September where CEO Mike Doustdar set out an updated strategy for the company.
When asked by Fierce this morning whether he agreed with reporting that investors had been underwhelmed by the company’s deal-making strategy, Doustdar said Novo was still on the hunt for acquisitions.
“We continue, of course, to mention that we are looking and searching across all of our therapy areas for innovation that fits and closes, maybe, some of the gaps that we have, as well as, of course, synergizes with what we're doing ourselves,” the CEO responded.
“We remain disciplined,” Doustdar continued. “I think, for us, it’s not about running and making sure we close a certain number of deals just to satisfy the headline news.”
“For us, it really starts [by] mak[ing] sure that we deeply search into what is strategically fitting into our portfolio of products and our strategy, and we'll continue doing that.”
Novo used its Capital Markets Day to set out an ambition to deliver mid-single-digit compounded annual sales growth in line with its industry peers from 2026 to 2030. This strategy involves growing and diversifying the pipeline, driving sustainable growth, and delivering attractive returns to shareholders, Doustdar reminded journalists on the call.
“From this quarter onward, we will hold ourselves accountable and report progress against each of them,” he said. “On growing and diversifying our pipeline, we have initiated seven first [in] human dose trials so far this year, and we have 10 ongoing phase 3 programs.”
In the near-term, Novo is aiming for “two exciting potential launches” next year, Doustdar pointed out.
One of these, the next-generation factor VIIIa mimetic bispecific antibody Frehemgo, has already received the nod from European regulators to treat hemophilia A. An FDA decision is awaiting some manufacturing issues to be rectified.
The other is CagriSema, a combination of the amylin analog cagrilintide with Novo’s well-known GLP-1 quantity semaglutide. The FDA is expected to make an approval decision before the end of this year, based on Novo’s earnings documents.
“Together with our exciting key growth brands, this is where our focus and investment will be in 2027,” Doustdar said on the call. “With Frehemgo, our job now is to make switching from today's standard of care seamless, safe, and become the preferred choice for patients and doctors.”
“For CagriSema, our job is simple: we need to get it to patients as fast as possible through multiple channels, the CEO added. “That means we are not waiting for approval to get ready.”
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