Operator: Thank you. Now we’re going to take our next question, and we are now taking the question from Harry Sephton from Credit Suisse. Your line is open. Please ask your question.
Harry Sephton: Brilliant. Thanks very much. My first question is on Ozempic. Trends in the first quarter were particularly strong, and I wanted to get your thoughts on the contributors to that performance. You talked about increasing penetration in first-line use, but we haven’t really seen much drop-off in metformin use. So is Ozempic attracting a new cohort of patients to treatment given the high efficacy? Or are you seeing more widespread off-label obesities? And then my second question ahead of OASIS 1 data. Can you outline how you view the opportunity for oral sema in obesity and how the opportunity relative to injectable sema may differ to the diabetes market given that it competes against many cheaper diabetes alternatives. Thank you very much.
Lars Fruergaard Jorgensen: Thank you, Harry. So maybe, Doug, if you first give a perspective on the fact that we indeed see very, very strong Ozempic growth. So how do you — what do you attribute that growth to? And then, Martin, any readout cause on OASIS 1 from the recent data? Thank you. So over to you, Doug.
Doug Langa: Yes. Thanks, Lars, and thank you for the question. What I’d first start by saying is that we did — it’s a good reminder that we did return to full supply with Ozempic, and we have had strong momentum. And then importantly, I think we’re still seeing well over 80%, almost close to 90% of the prescriptions are coming from new patients and new to GLP-1 class. So we’re seeing earlier use and more naive and patients that are new to the category. So I think that’s important and continued momentum.
Lars Fruergaard Jorgensen: Thank you, Doug. Martin?
Martin Lange: Yes. So we haven’t seen the OASIS results yet. But based on what we saw with the data from 25 and 50 milligram in diabetes, we would expect to basically see what we plan out to do, namely parity, vis-a-vis we’re going on efficacy, on safety, and on semaglutide exposure, which is sort of the regulatory requirement. That basically means that an oral offering in the obesity space holds a really, really strong potential, first of all, because we get the full efficacy and safety benefit of the semaglutide molecule, but also the benefit of a different mode of administration. And we do know that some patients, but also some prescribing physicians, will prefer the oral offering over a subcutaneous treatment. So having the full pallet will obviously release that further potential.
Lars Fruergaard Jorgensen: Thank you, Martin. And on subject, I would also just add, I’d also add that for IO despite some drug shortage notifications, we still see above 50% growth in IO. So we see really, really strong demand for the type of clinical benefit that Ozempic is giving. Thank you, Harry. Next set of questions please.
Operator: Thank you. Now we’re going to take our next question. Now we’ll go to Florent Cespedes of Societe Generale. Florent, your line is open. Please ask your question.
Florent Cespedes: Good afternoon. Thanks, Lars, for taking my — hello? Can you hear me?
Lars Fruergaard Jorgensen: Florent, please go ahead. Yes, please go ahead.
Florent Cespedes: Yes. Good afternoon. Thank you, Lars, for taking my question. Two quick ones. First, for Karsten on margin. Could you elaborate on how you see the trend of your operating profit margin after the strong Q1? So that’s on the medium term. The second question is more early days, but it’s regarding the Inflation Reduction Act. Could you please share with us your pulse on how you see this that could impact your GLP-1 portfolio? Thank you.
Lars Fruergaard Jorgensen: Thank you, Florent. So Karsten, first on your expectations for medium-term margin? And then, Doug, you can perhaps cover the Inflation Reduction Act question, how that would potentially impact us.
Karsten Munk Knudsen: Yes. Thank you, Florent, for that question. So margin is, of course, a function of both our top-line momentum and our investments into the business and then, finally, our choices in that respect. And our strategy as a company is to drive innovation-based growth. So what we are doing is that we are investing in growth. And that is both short, medium, and long-term growth, whether it’s in our marketed portfolio today or whether it’s building a strong pipeline of products in R&D. So that’s our intention. And margin in itself, as a consequence, is not a target in itself. You see us delivering pretty much 47% operating margin in the first quarter. So top-quartile margin compared to that of the industry. So we believe that we generate the most value by driving top-line growth and a competitive R&D portfolio.
With that said, clearly, in a scenario as we are in now with very, very high growth levels in, say, in the 20s, then the organic investment translating in the company will most often below that. And as a consequence, we will have margin leverage for the company in a mainly organic scenario. And then I’d say then how that entails versus BD, of course, that’s more a stochastic a function of progress on our BD agenda and the type of assets and companies that will join the company. So to summarize, not a target in itself. But with a higher top-line run rate, then logically, we are disciplined and we’ll be driving margin.
Lars Fruergaard Jorgensen: Thank you, Karsten. And, Doug — good. Thanks. Doug, on the Inflation Reduction Act, there are different components, some with the short-term impact, some of the longer term. What can you share about that, Doug?
Doug Langa: Yes, exactly, Lars. There’s some positives and some negatives. But as a reminder, there are four components to the IRA that could impact Novo Nordisk. It’s the inflation penalty, Part D redesign, the insulin $35 cap, and the direct negotiations. And again, as a reminder, the direct negotiations, they’re doing 2027. And it does appear that CMS will be implementing a molecule-based negotiation instead of a brand-based, but there’s still some uncertainty as it relates to the price and the initial offer of that price and when it will begin. So I would say there’s several components, some good guys, some bad guys, and still some uncertainty around that.
Lars Fruergaard Jorgensen: Thank you, Doug. Thank you, Florent, for those questions. Be ready for next question.
Operator: Thank you. Now we’ll take our next question. Please stand by. And the next question comes from the line of Simon Baker from Redburn.
Simon Baker: Thank you for taking my questions. Two, if I may. Firstly, on Wegovy capacity. We’ve obviously talked a lot about fill and finish capacity, which is coming on in this year. Could you remind us where we are into the next coming years of API capacity. And related to that, I’ve heard a few anecdotal stories in the U.K. of people seeking private payer Wegovy being told there’s no supply and then immediately going on to Saxenda. I just wanted to know if you had any color on that in the U.K. and other markets. Is that a meaningful driver of Sax and Wegovy warehousing. And then another question on semaglutide. I see 6 weeks ago, you started a Phase 1 study comparing formulation J with the current semaglutide C. I wonder if you could just give us a flavor for the characteristics of the J formulation versus the current one. Thanks so much.
Lars Fruergaard Jorgensen: Thank you, Simon. So on Wegovy, I will start by saying that manufacturing is running well. You have seen that we have now the second contract manufacturer up and running and contributing. And that’s what enabled us to lift our forecast, I would say, rather significantly earlier in April. We have also guided that we’ll be adding more lines. So later in the year, there’ll be a third line. And you can imagine that we have — that’s not the end mole becoming. We have also guided that we have upgraded our capex. So we are investing significantly also in-house, and that includes API. You know we have a couple of years back started a project in Denmark with API expansion. You know that we have a facility in U.S. that has just been approved, etc.
So there’s a lot happening. And while we do see some short-term need for holding a bit back on the starter doses in the U.S., we are very, very encouraged about our ability to scale our manufacturing setup and just the fact that we guide as we do now on top of, say, 14%, 16% growth the last few years. And of course, this year, we have the kick in of Wegovy. And if you, say, normalized for that, it is a very, very sizable and meaningful growth that we believe we can cater to. So I’m not going to more specifics than that, but these are known technologies for us. We are scaling, and we will be scaling going ahead. I cannot go into a lot of details about what is happening in the U.K. I don’t have the knowledge. I don’t know anyone here around the table who can give a lot of clarity around that, but I think we have a wise man in Martin who can talk a bit to the semi formulation.
Martin Lange: It’s gonna be a short answer. So I’ll just say that the purpose of our formulation upgrades is obviously to, first and foremost, improve bioavailability of semaglutide, and we continue to do further the development of that. To your point, we’ve had several improvement since our first formulation, but I cannot go into specific details of what the individual upgrades entail.
Lars Fruergaard Jorgensen: Thank you, Martin. Thank you, Simon. Next set of questions please.
