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CNBC Exclusive: CNBC Transcript: Novo Nordisk CEO Lars Fruergaard Jorgensen Speaks with CNBC’s Sara Eisen on “Money Movers” Today

CNBC

WHEN: Today, Friday, March 8, 2024  

WHERE: CNBC’s “Money Movers”

Following is the unofficial transcript of a CNBC exclusive interview with Novo Nordisk CEO Lars Fruergaard Jorgensen on CNBC’s “Money Movers” (M-F, 11AM-12PM ET) today, Friday, March 8. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2024/03/08/novo-nordisk-ceo-on-latest-trials-us-obesity-and-demand-outlook.html.

All references must be sourced to CNBC.

SARA EISEN: Shares of Novo Nordisk got big this week after positive trial results came in for a new anti-obesity drug. The company is testing alongside its flagship Ozempic and Wegovy products, Novo Nordisk briefly passing the valuation of Tesla yesterday on that surge. I sat down with the CEO of what is now Europe’s largest company by market cap to talk about those results and the immense demand that the company is seeing for its drugs, take a listen.

LARS FRUERGAARD JORGENSEN: We have a strategy of really going broad and deep in obesity. And we released some phase one data, where we’re combining two mechanisms gp-1 and Emelyn into one molecule that we’ve shown both orally but also in technical and we saw in our 13% weight loss after 12 weeks, so very, strong profile and something that could develop into a best-in-class medicine.

EISEN: How do we, how should we think about it? Is it, is it a next generation replacement ultimately for Wegovy and Ozempic?

JORGENSEN: Yeah, we have I should say Wegovy approved for obesity and Ozempic for type two diabetes. And we really brought building this broad portfolio and we believe in the future, there’ll be different segments of anti-obesity treatment, different patients having different preferences, some would prefer an injectable. And we really believe that once a week injectable is a very convenient offering.

EISEN: What is the gap right now between supply and demand?

JORGENSEN: It’s significant I have to say. We look in the in the U.S., there’s more than 100 million people living with obesity and that number is growing. So far, we are only serving around 1 million patients. We have access to around 50 million patients and we have to restrict starter doses to make sure that those who start treatment can – up to the maintenance doses. Yeah, we are releasing more and more of those starter doses into the U.S. market. We more than that as we start the new year compared to what we ended with last year. But still, we have a situation where there’s larger demand than what we can supply. Also outside of U.S., we see the same demand. We have only launched in say one or two handful of countries. So this is a situation where I think for the first time there’s really efficacious and safe treatment for people living with obesity. And many of those who have been struggling their whole life trying to lose weight, many not succeeding. So this is an, an opening of a large say market with patients who have been there for years without good care.

EISEN: So Lars, when do you think you will be able to meet the current demand? Is there a date, a target?

JORGENSEN: You can say that the latest estimate coming out published in The Lancet indicated that was going to be a billion people living with obesity. Obviously, I don’t believe they can all have access to treatment in near term. But the fact that we only serving a low number in the million range means that I think that is a very, very significant demand here and we have making made decisions to ramp up manufacturing significantly. Just last year, we added 5 million new patients on treatment. But still there’s there’s going to be many years where we can add to this magnitude of patients on a yearly basis without fully fulfilling demand. So I think the realistic answer to your question is that it will take quite some years before the industry has scaled up supplies to be able to meet this very strong demand.

EISEN: Yeah, you talked about some of the numbers on the total addressable market. Analysts and investors are estimating this is 100, as much as 150 to $200 billion market. Does that match up with your own estimates?

JORGENSEN: I would rather not comment on it because it’s it’s a function of price development, etc. also which market you’re talking about. But I will just say that as a company, after 100 years, we only serve a bit more than 40 million patients. I mentioned we added 5 million patients last year. So I look at a very significant opportunity of helping millions more of patients who live with obesity, and we’re committed to build the capacity needed to get to as many of them as possible.

EISEN: President Biden last night the State of the Union talked about the new powers in the IRA that allow Medicare to negotiate drug prices. It likely will – your drugs likely will face pressure in a few years as part of the IRA and I’m wondering how you think about the impact of pricing and the business when that happens, whether it’ll only impact Medicare patients or all patients as well.

JORGENSEN: We have a structure today where we negotiate rebates. So we are used to actually enhancing rebates and see lower, lower pricing over time. We are dealing with the first IRA negotiation right now for one of our insulins. So we’re gaining some experience with that. So I think we can manage this and also taking into account that we are developing our products for a number of indications. So we we see a very large opportunity to serve many more patients also patients living with different diseases. So that’s a that’s a volume opportunity. And typically as you expand volumes, you also accept lower pricing. And that means that we can serve our patients and we can still have an attractive business. So I think it works both for the healthcare system so patients and will also work for us since there’s so many patients to serve. So we are also preparing for that pricing dynamics in the future. Exactly how it plays out between government accounts and commercial accounts, I think it’s a bit early to say. But we are confident that we can also have a strong business in the future based on the innovation we have and the many patients that have benefited from these products.

EISEN: What about competition? Obviously Eli Lilly is the chief competitor here but there are others coming as well and we’re following these trials. How do you expect that to impact the market, pricing, margins?

JORGENSEN: When you look at at obesity, this is actually one of the markets where I welcome competition because it’s an underdeveloped market. We are the leader today. And when you’re the leader, it’s not really a game of market share. It’s a game of expanding the market and what happens when you have more companies investing into innovation is that you actually you create the market, you compete on clinical data, and that that fosters innovation also from our side. So having a strong competitor makes us sharper. And we start out by talking about the new data for this  amycretin molecule we just announced. And of course, when we have good competition that also drives creativity in our laboratories, and we believe that we have a good position to actually win in terms of innovation and in efficacy and safe products to patients. So welcome competition and I’ll also say back to the number of patients, there’s room for for many players. So I believe this will be a highly competitive space. But I also believe that we have a set of capabilities across the value chain where we can both innovate and scale and get to more patients than anyone else. So that’s actually a very positive outlook for us as a company, but also the patients and the healthcare systems that will benefit from these innovations and treating people with obesity is actually a way to also strengthen the healthcare systems and take the burden off. We all know that healthcare systems today are struggling, dealing with all the chronic diseases. And this is actually a way to help healthcare systems.

EISEN: Well and to that point, you’re also targeting other diseases this week, late-stage trial results showing Ozempic cut the risk of kidney disease, progression and death or cardiovascular complications by 24% of diabetic patients. So, you’re looking into chronic kidney disease. What other indications are you going to be looking into for these medications?

JORGENSEN: Yeah, you’re right. If you look at people living with type two diabetes, 40% of them also have chronic kidney disease, which can be a devastating disease. So, cutting that risk by 24% on top of, you know, standard of care is very strong. If you look at our – molecule we have approved in type two diabetes, in obesity. We also pursuing mesh, this fatty liver disease, we’re exploring it in Alzheimer’s disease. We just spoke about the kidney data. So there’s a number of opportunities for using this mechanism that works in an inflammatory way, and benefits on a number of conditions. So this is what happens when great scientists come up with wonderful molecules. We have an opportunity of helping many patients and that’s hugely exciting for us as a company.