After falling short of analysts’ expectations in its latest quarter, Novo Nordisk is restructuring its commercial operations as it looks to fend off challenges to its products.
After falling short of analysts’ expectations in its latest quarter, Novo Nordisk is restructuring its commercial operations as it looks to fend off challenges to its products. The company plans to eliminate 185 jobs and add an additional 70, according to reports.
The move is part of a corporate effort to strengthen its competitiveness in the global marketplace and withstand challenges to its products, a spokesperson told FiercePharma. The spokesperson said the reorganization will allow the company to “fully leverage the significant innovations we are bringing to customers and patients.”
The spokesperson told FiercePharma that Novo Nordisk will have roughly the same number of employees working at the company that it currently has on its payroll. That indicates that a number of the positions being eliminated are not currently filled.
“We know this can be disruptive to our employees and we’ll offer our full support to those affected, including consideration for new positions when appropriate,” the spokesperson said, according to the report.
The eliminated positions are well below last year’s decision to eliminate up to 1,000 employees as it underwent another shift to maintain its competitive edge. At the time, the company said the cuts were necessary in order for the company to “have a sustainable balance between income and costs. In the current situation, we have to prioritize investments in key product launches that will bring innovation to patients and drive our future growth.”
Novo Nordisk announced the reorganization after its latest quarterly report showed a decline of sales in North America, particularly with some decline in its diabetes drugs. Sales of insulin and diabetes drug Levemir dropped by 5 percent and 23 percent, respectively. In its Nov. 1 quarterly call, Novo Nordisk Chief Executive Officer Lars Fruergaard Jørgensen said sales of diabetes drugs Tresiba and Victoza grew 118 percent and 15 percent, respectively in the United States. Novo Nordisk, like other companies that have significant diabetes franchises, is under pricing pressure in the United States for its treatments.
Novo Nordisk will likely soon be fielding another diabetes treatment. Last month, an advisory panel with the U.S. Food and Drug Administration gave a near unanimous support to Novo Nordisk’s diabetes drug semaglutide, a long-acting GLP-1 analogue. The drug is scheduled for a Dec. 5 vote. If semaglutide is approved, it will square off against Eli Lilly’s Trulicity (dulaglutide), also a glucagon-like peptide 1 receptor agonist. If approved, analysts have predicted that semaglutide could generate more than $3 billion in revenue by 2023.
Despite that positive news, Novo Nordisk is not projecting a tremendous financial growth over the next year. In its quarterly report, the company tightened its sales guidance and predicts growth of 2 to 3 percent compared with the previous range of 1 percent to 3 percent.
“The preliminary outlook for 2018 in local currencies indicates low to mid-single-digit growth in both sales and operating profit,” the company said.
