A new generation of insulins for both type 1 and type 2 diabetes, Degludec and DegludecPlus, continues to show promising results and has progressed to phase 3 trials. If preliminary results are confirmed, this new generation of insulins has the potential to offer better treatment for people with diabetes and further strengthen Novo Nordisk’s competitive position.

While the technical challenge of effective insulin treatment in tablet form is substantial, we are greatly encouraged by the progress our research and development teams have made during the past two years. Oral insulin could ensure improved treatment and better health for many people with diabetes, as greater convenience could lead to earlier and more diligent use of insulin therapy. Our first oral insulin preparation entered into phase 1 clinical trials at the end of 2009 – a testament to our belief in this future treatment paradigm.

During 2009, we made notable advances in the development of our biopharmaceuticals pipeline, including progress with treatments for haemophilia A and B. We believe that we have an obligation and an opportunity to develop new and better ther apies both for inhibitor patients and for general haemophilia patients as well as other patients with rare coagulation disorders.

We launched a new product, Victoza^®, which has the potential to improve diabetes care, and our research and development activities have resulted in a strengthened pipeline of new products for our therapeutic areas.

Global values for global growth
In the insulin market we have maintained our position as the world leader with a market share of more than 50% by volume. We are continuing to increase market share in the modern insulin market and our portfolio of modern insulins was the key driver of our solid business performance in 2009. To expand our competitive position and brand awareness, not least among general practitioners, we have continued to increase our sales organisation in key markets.

As we grow and globalise our business, it is critical that all employees develop a deep understanding of the principles at the heart of the Novo Nordisk Way of Management, which describes our vision, our values, our commitment and our policies, and thereby guides all of our actions. Continual training is necessary as our business grows and attracts new people and as the regulatory environment and global norms change.

We acknowledge that in 2005 Novo Nordisk was one of many companies listed as paying fees to the Iraqi government in con-

Photo: Sten Scheibye, chairman of the Board of Directors

Meeting changing healthcare needs and societal expectations

Interview with Novo Nordisk’s CEO,
Lars Rebien Sørensen

As the global economy struggles to rebound and governments and private payers face budget constraints that impact healthcare spending, what are the implications for the future of the healthcare industry?
The current economic downturn has impacted societies’ and individuals’ ability to pay for healthcare, including life-saving medicines. At an industry level, a lack of innovation also means that the number of new medicines approaching the market is not sufficient to replace revenue lost due to patent expiry. Of course, patent expiry also means that generic competition will lower society’s costs for existing treatments, creating room in healthcare budgets for new, innovative drugs that fulfil important medical needs.

While there are problems at an industry level, there are also significant opportunities. The prevalence of chronic disease is increasing everywhere, and the demand for better and more convenient therapies is immense. To address the growth in chronic disease, healthcare systems will need to evolve and change, with increased emphasis on prevention and wellness.

This trend has implications for how we approach innovation and treatment. In the treatment of diabetes, for instance, we need to consider the rise in obesity in many parts of the world, which is associated with a higher risk of chronic disease. The greatest improvements in quality of life will come from earlier interventions, halting or arresting disease progression.

During 2009, we undertook our third round of future scenario development to help us analyse the emergence of new paradigms that may impact healthcare and our business. One scenario we considered is a world where obesity becomes the new ‘normal’, with a wider range of medical and public health interventions. Another possible scenario involves a change in industry dynamics, with increased emphasis on medicines as part of the full cycle of care and payment tied to carefully monitored healthcare outcomes.

With a strong pipeline and a primary business focus on chronic disease, we believe we are well positioned for many of the challenges and potential changes facing the healthcare sector.

Where do you see future growth coming from?
In the near term, our growth will come primarily from the global expansion of insulin therapy with modern insulin analogues, particularly in the US and emerging markets. In addition, we anticipate substantial growth from the introduction of Victoza^®, a new once-daily human GLP-1 analogue.

One of the most interesting businesses we will develop in the next 10 years is a broad pipeline of treatments for haemophilia and rare coagulation disorders. We anticipate being the leading player in this field within 15 years.

As markets are becoming more global we are seeing a convergence of medical and regulatory practices. This favours companies with a global presence and the building of global brands. By continuing to expand globally, Novo Nordisk will continue to develop into a strong international competitor, but with a Danish heritage.

Our people around the world build the business. The responsibility of management is to ensure that the business is built on Novo Nordisk values. Novo Nordisk’s heritage and values are of great importance to our stakeholders and to our ability to attract employees who want to work for a company that prioritises ethical behaviour and social and environmental responsibility – and combine these with attractive, sustainable financial returns.

The prevalence of chronic disease is increasing everywhere, and the demand for better and more convenient therapies is immense. To address the growth in chronic disease, healthcare systems will need to evolve and change, with increased emphasis on prevention and wellness.

How will healthcare reforms in various markets impact Novo Nordisk in the near term?
Healthcare reforms are taking place all over the world with the aim of making provision of health services more affordable. This puts constant pressure on pricing of all products and services used.

Most noticeable is the ongoing work in the US to extend services and insurance coverage to a larger part of the population. This may lead to a reduction in prices in the US in the short term, particularly for people whose treatment is paid for by government programmes. Extending coverage to more people could improve the prevention and treatment of chronic diseases, which today are underdiagnosed and undertreated. Ultimately, more people may be treated.

Reforms are, however, a global theme as populations are growing older and consuming more healthcare services, and some parts of the world are becoming affluent enough to be able to afford heathcare services in the first place. Add to this an ever-increasing expansion of treatment options, and you can begin to understand the future funding difficulties.

How does Novo Nordisk define value for money?
Payers around the world are concerned about the cost of healthcare and the pricing of medicines. The requirement to substantiate healthcare purchases in terms of value for money is becoming an additional hurdle for product acceptance over and above clinical trial and regulatory requirements for safety, efficacy and quality.

We create value for healthcare patients and payers by offering medicines and devices that significantly improve healthcare outcomes and quality of life or reduce the need for other health services. In diabetes, for example, we have made the case that earlier diagnosis and treatment can significantly reduce the burden on healthcare spending as diabetes, if left untreated, carries significant economic and humanitarian costs in the form of serious late-stage complications.

How will Novo Nordisk prepare for future challenges?
It is not enough to produce a drug that is slightly better than its predecessor. The need for evidence of improved healthcare outcomes is growing, as is the demand for solid evidence. This means we not only have to innovate, we have to achieve a greater level of innovation than ever before. With a looming shortage of healthcare professionals in much of the world and existing healthcare systems overwhelmed by the increase in chronic disease, new types of innovation will also be required as treatment processes change.

During 2009, we assessed the level of innovation within our organisation and how innovation is fostered. To challenge ourselves to continuously improve, we are introducing new pilot programmes in 2010 to cultivate new ways of thinking and working in several parts of our business.

Another issue we must address is the fundamental trust society has in healthcare companies. Our sector needs to build stronger relationships with governments, regulators and people who need treatment and care.

The need for evidence of improved healthcare outcomes is growing, as is the demand for solid evidence. This means we not only have to innovate, we have to achieve a greater level of innovation than ever before.

We understand the need to be open about how we operate. I anticipate our engagement with stakeholders will intensify and hope this will increase understanding of what we are trying to accomplish.

As the world leader in diabetes care, what is Novo Nordisk’s role?
Our dream and our hope is that we can cure diabetes. Our commitment is backed by substantial investment in diabetes research, but finding a cure for type 1 diabetes and preventing type 2 diabetes are very difficult tasks. In the absence of a cure, we are leading the fight against diabetes, advocating and working for improvements in prevention, earlier diagnosis, better treatments and, eventually, a cure.

We believe that access to health is a fundamental human right. We know that people around the world die of lack of access to

diabetes products, so we have a responsibility to do what we can to ensure that treatment is available. In Africa, for example, more people are dying of diabetes than of HIV/AIDS. The increased prevalence of diabetes is of a magnitude that will impact economic growth in many countries.

Giving products away is not sustainable. To create long-term change in healthcare systems, we need to have a substantial impact on healthcare infrastructure and capacity. For this reason we launched the World Diabetes Foundation in 2001. The WDF focuses exclusively on capacity-building and diabetes awareness in developing countries. Through our programme to reach children with type 1 diabetes, Changing Diabetes^® in Children, we seek to improve distribution systems and healthcare education. By combining this with the company’s differential pricing scheme, which allows the poorest countries to buy our life-saving insulins at significantly reduced cost, we believe we can be part of the solution to healthcare access dilemmas.

Performance in 2009

2009 was a successful year for Novo Nordisk with solid sales growth in all major business areas, continued improvement in the gross margin and solid progress in the clinical development pipeline for key projects in both diabetes care and biopharma-ceuticals. In 2009, we launched Victoza^®, the first once-daily human GLP-1 analogue, in several markets in Europe. Victoza^® was approved in the US and Japan in January 2010. Our accomplishments during the year also include measures that will provide a foundation for better long-term performance. We have continued to improve the efficiency of our production and have decoupled growth in CO₂ emissions from business growth. During 2009, we exceeded our target of a 10% absolute reduction in emissions from the 2004 baseline year.

Sales increased by 12% in Danish kroner and by 11% measured in local currencies. Growth was realised within both diabetes care and biopharmaceuticals. Modern insulins were again the main contributor to growth, increasing by 24% (23% in local currencies). NovoSeven^® and Norditropin^® also contributed to the solid sales growth, increasing, by 11% (10% in local currencies) and by 14% (10% in local currencies) respectively.

Sales growth was realised in all regions. North America was the main contributor with 48% share of growth measured in local currencies. International Operations and Europe contributed 32% and 19%, respectively, of the total sales growth – also measured in local currencies.

Reported operating profit increased by 21% to DKK 14,933 million. Adjusted for the impact from currencies, underlying operating profit increased by more than 15%.

Net profit increased by 12% to DKK 10,768 million and earnings per share (diluted) increased by 15% to DKK 17.82.


2009 performance against long-term financial targets
By focusing on growth, profitability, financial return and generation of cash, our four long-term financial targets guide Novo Nordisk’s financial development and the way we seek to create shareholder value. Our long-term financial targets are operating profit growth, operating margin, return on invested capital and cash conversion.

Operating profit growth was realised at 21%. However, adjusted for the impact from currencies, the underlying operating profit growth increased by more than 15%. This performance reflects solid underlying sales growth as well as an improved gross margin. The long-term target is average annual operating profit growth of 15%.

The operating margin for 2009 was realised at 29%, up from 27% in 2008, mainly driven by an improved gross margin. The long-term operating margin target is 30%.

The return on invested capital was 47%, a significant improvement compared to 2008 when the return on invested capital was 37%. The improvement mainly reflects solid growth in operating profit as well as a lower level of invested capital following continued working capital improvements but has also benefited from the development in key currencies. The long-term target for return on invested capital is 50%.

The cash-to-earnings ratio was realised at 115% in 2009 and at 111% for the last three years on average. The long-term target for cash-to-earnings ratio is 80%. The cash-to-earnings ratio has been positively impacted by a relatively low level of investments during 2008 and 2009 compared to the long-term trend. The cash-conversion ability will inherently fluctuate between the individual years, and the long-term target therefore measures the cash-to-earnings ratio over a three-year period.

Diabetes care
We continue to be the global leader with 51% of the total insulin market and 45% of the modern insulin market, both measured by volume. We aim to expand our leadership position in diabetes care by leveraging the full portfolio of modern insulins in state-of-the-art delivery devices, and continuing the launch of Victoza^®, while developing new antidiabetic agents and a new generation of insulins to provide more effective diabetes care. See pp 18–23.

Sales performance
Sales of diabetes care products increased by 12% measured in Danish kroner to DKK 37,502 million and by 11% in local currencies compared to 2008.

Modern insulins, human insulins
and protein-related products
Sales of modern insulins, human insulins and protein-related products increased by 13% in Danish kroner to DKK 34,850 million and by 11% measured in local currencies, driven by North America and International Operations.

Our portfolio of modern insulins was the main contributor to growth and sales increased by 24% in Danish kroner to DKK 21,471 million and by 23% in local currencies. All regions realised solid growth rates, with North America accounting for 51% of the growth followed by Europe and International Operations. Sales of modern insulins constituted 65% of our sales of insulin in Danish kroner in 2009.

North America
Sales in North America increased by 25% in Danish kroner and by 20% in local currencies in 2009, reflecting a solid penetration of the modern insulins Levemir^®, NovoLog^® and NovoLog^® Mix 70/30. We maintained our leadership position in the US insulin market with 42% of the total insulin market and 34% of the modern insulin market, both measured by volume. At the end

of 2009, 40% of our modern insulin volume in the US was sold in FlexPen^®.

Europe
Sales in Europe were largely unchanged measured in Danish kroner and increased by 4% in local currencies during 2009. This reflects continued progress for the portfolio of modern insulins but also declining human insulin sales. Novo Nordisk holds 54% of the total insulin market and 51% of the modern insulin market, both measured by volume, and is capturing the main share of growth in the modern insulin market. The device penetration in Europe remains high with more than 95% of Novo Nordisk’s insulin volume sold in devices at the end of 2009, primarily NovoPen^® and FlexPen^®.

Victoza^®, the first once-daily human GLP-1 analogue, has been launched in Germany, the United Kingdom, Denmark, Ireland, Norway, Switzerland, the Netherlands, Greece and Sweden. Launch activities are progressing well in these markets and feedback from healthcare professionals and patients is encouraging. At the end of 2009, Victoza^® had obtained market leadership in the expanding GLP-1 market in both Germany and Denmark.

International Operations
Sales within International Operations increased by 17% in Danish kroner and by 19% in local currencies. The main contributor to growth in 2009 was sales of modern insulins, primarily in China and Turkey. Furthermore, sales of human insulin, primarily driven by China, continue to add to overall growth in the region. The device penetration in China is high with more than 90% of our insulin volume sold in devices, primarily NovoPen^®.

Japan & Oceania
Sales in Japan & Oceania increased by 12% measured in Danish kroner and decreased by 1% in local currencies. The sales development reflects sales growth for all three modern insulins, NovoRapid^®, Levemir^® and NovoRapid Mix^® 30, countered by

pressure on the overall Novo Nordisk market share due to intense competition. Novo Nordisk holds 67% of the total insulin market in Japan and 59% of the modern insulin market, both measured by volume. The device penetration in Japan remains high with more than 95% of our insulin volume sold in devices, primarily NovoPen^® and FlexPen^®.

Oral antidiabetic products (NovoNorm^®/Prandin^®)
In 2009, sales of oral antidiabetic products increased by 11% in Danish kroner to DKK 2,652 million and by 9% in local currencies compared to 2008. This increase primarily reflects increased sales in International Operations, particularly China.

Biopharmaceuticals
We continue to grow our biopharmaceuticals therapy areas by leveraging our specialised expertise with proteins and our understanding of chronic disease. Novo Nordisk is committed to developing innovative and improved ways to treat haemophilia and other rare coagulation disorders, growth hormone deficiency, the symptoms of menopause and inflammatory diseases. See pp 24–27.

Sales performance
In 2009, sales of biopharmaceutical products increased by 11% measured in Danish kroner to DKK 13,576 million and by 9% measured in local currencies compared to 2008.

NovoSeven^®
Sales of NovoSeven^® increased by 11% in Danish kroner to DKK 7,072 million and by 10% in local currencies. Sales growth for NovoSeven^® was primarily realised in International Operations and Europe. The sales growth for NovoSeven^® mainly reflected increased sales from treatment of spontaneous bleeding episodes for congenital inhibitor patients, which remains the largest therapeutic area of use for NovoSeven^®.

Norditropin^®
Sales of Norditropin^® (ie growth hormone in a liquid, ready-to-use formulation) increased by 14% measured in Danish kroner to DKK 4,401 million and by 10% measured in local currencies compared to 2008. North America and Europe were the main contributors to growth measured in local currencies. We maintained our position as the second-largest company in the global growth hormone market with 24% market share measured by volume.

Other products
Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy-related products, increased by 9% in Danish kroner to DKK 2,103 million and by 6% in local currencies. This development primarily reflects continued sales progress for Vagifem^®, a topical oestrogen product, in the US.

Operating performance
The gross margin increased to 79.6% compared to 77.8% in 2008. This improvement primarily reflects improved production efficiency, higher average selling prices in the US and a positive currency effect. The improved production efficiency primarily reflects higher yields in diabetes bulk production and increased utilisation of insulin filling and packaging lines. The gross margin was positively impacted by around 0.4 percentage points as a result of a positive currency development, primarily the higher

value of the US dollar and the Japanese yen versus the Danish krone compared to 2008.

In 2009, total non-production-related operating costs increased by 12% to DKK 26,048 million compared to the same period last year. Around 1.5 percentage points of the increase in non-production-related operating costs reflect the higher value of key currencies versus the Danish krone in 2009 compared to 2008. The underlying development in non-production-related operating costs relates to the expanded sales forces in especially the US, the UK, Germany, Japan and China, countered by a stable level for research and development costs. The development in research and development costs primarily reflects non-recurring costs in 2008 related to the discontinuation of all pulmonary diabetes projects and of the growth hormone therapy project for patients in low serum albumin in dialysis (Growth Hormone Therapy in LSAD) countered by costs in 2009 related to late-stage development of the new Degludec and DegludecPlus (formerly known as SIBA and SIAC) in the second half of 2009.

Licence fees and other operating income were DKK 341 million in 2009 compared to DKK 286 million in 2008.

Operating profit in 2009 increased by 21% to DKK 14,933 million compared to 2008.

Net financials and tax
Net financials showed a net expense of DKK 945 million in 2009 compared to a net income of DKK 322 million in 2008.

Included in net financials is the result from associated companies with an expense of DKK 55 million, primarily related to Novo Nordisk’s share of losses in ZymoGenetics, Inc. In 2008, the result from associated companies was an expense of DKK 124 million.

For 2009, the foreign exchange result was an expense of DKK 751 million compared to an income of DKK 141 million in 2008. This development reflects losses on foreign exchange hedging of especially US dollars and Japanese yen, due to the appreciation of these currencies versus Danish kroner in 2009 compared to the exchange rate level prevailing in 2008.

The effective tax rate was 23.0%, a decrease from 24.0% in 2008.

Capital expenditure
and free cash flow
Net capital expenditure for property, plant and equipment for 2009 was realised at DKK 2.6 billion compared to DKK 1.8 billion in 2008. The main investment projects in 2009 were the insulin filling plant in Tianjin, China, and new device manufacturing lines in Denmark.

Free cash flow for 2009 was realised at DKK 12.3 billion compared to DKK 11.0 billion in 2008. The higher cash flow is driven by higher net profit and lower income taxes paid, countered by increased capital expenditure during 2009.

Equity
Total equity was DKK 35,734 million at the end of 2009, equivalent to 65% of total assets, unchanged from the end of 2008.

Proposed dividend
At the Annual General Meeting on 24 March 2010, the Board of Directors will propose a 25% increase in dividend to DKK 7.50 per share of DKK 1, corresponding to a pay-out ratio of 40.9%, compared to 37.8% for the financial year 2008. No dividend will be paid on the company’s holding of treasury B shares.

Share repurchase programme
During 2009, Novo Nordisk repurchased 21,661,949 B shares at an average price of DKK 301 per share, equivalent to a cash value of DKK 6.5 billion, completing the share repurchase programme of DKK 19 billion initiated in 2006.

The Board of Directors has approved a new DKK 7.5 billion share repurchase programme to be executed during 2010.

Share savings programme
In the autumn of 2009, the employees in the Danish part of the organisation were offered participation in a share savings programme. An annual maximum of DKK 22,800 per participant can be saved out of gross salary in 2010. The savings will be converted into Novo Nordisk B shares at the market price on 7 December 2010 contingent on continued employment. The shares will be restricted until January 2018.

Approximately 8,400 employees elected to participate in the programme corresponding to 64% of the eligible employees. The total amount invested by employees will be approximately DKK 160 million. This programme is cost neutral to the company.

Holding of treasury shares
and reduction of share capital
As per 2 February 2010, Novo Nordisk A/S and its wholly-owned affiliates owned 32,137,945 of its own B shares, corresponding to 5.2% of the total share capital.

In order to maintain capital structure flexibility, the Board of Directors at the Annual General Meeting in 2010 will also propose a reduction in the B share capital from DKK 512,512,800 to DKK 492,512,800 by cancelling 20,000,000 B shares of DKK 1 from the company’s own holdings of B shares at a nominal value of DKK 20,000,000, equivalent to 3.2% of the total share capital. After implementation of the share capital reduction, the company’s share capital will amount to DKK 600,000,000 divided into an A share capital of DKK 107,487,200 and a B share capital of DKK 492,512,800.

Legal issues
Novo Nordisk is party to a number of legal cases. See key legal issues and information on contingencies for pending litigations on pp 84–85.

Non-financial performance
Strategic management of the direct and indirect economic, social and environmental impacts of our activities reduces risk and strengthens competitiveness. Managing our business using the Triple Bottom Line business principle helps ensure that decisions are balanced and take a long-term view, with the objective of protecting and enhancing shareholder and societal value. See pp 28–36.

2009 performance against
long-term non-financial targets
Long-term non-financial targets guide the company’s sustainability-driven priorities in an increasingly dynamic business environment. Focus is on maximising positive social impacts by improving access to and quality of care and effectively managing resources to minimise environmental impacts.

During 2009, we met our long-term targets related to employee engagement and adherence to the Novo Nordisk Way of Management. We also made progress towards the diversity target we set in 2008. As a measure of our progress in expanding access to diabetes care, we also made progress in increasing adoption of our long-established differential pricing policy for insulin sales in least developed countries (LDCs).

Our long-term target for reduction of CO₂ emissions was achieved at the end of 2009, well ahead of schedule. Targets for water and total energy consumption were also achieved.

Social
Performance on social dimensions continued on a positive trend with notable progress on all dimensions: people (employees), patients and communities. See p 89.

People
In 2009, we onboarded 4,640 new employees, compared to 4,496 in 2008. The global growth trend continues as projected, with Europe and International Operations leading the expansion. At the end of 2009, the total number of employees was 29,329, which corresponds to 28,809 full-time positions. The total number of employees increased by 8%, from 27,068 at the end of 2008.

In the same period, employee turnover decreased from 12.1% to 8.3%, reflecting a continuous focus on retention which was likely reinforced by the economic environment.

Via the multiplier effect, the employment impact in 2009 – ie the number of jobs created in the supply chain and through employees’ private consumption – was 96,500 jobs worldwide. Most notably, of the total increase of 8,000 the largest portion is estimated to be in International Operations.

Productivity continued to increase, with sales per full-time position at an average of DKK 1.8 million, compared to DKK 1.7 million in 2008.

The ability to manage global growth and stimulate productivity and innovation is tracked via the internal facilitation process and a set of engagement scores in the annual employee survey, eVoice. In 2009, the consolidated score (on a scale of 1–5, with 5 being best) was 4.3, an increase of 0.1 from 2008. Annual scores have been consistently above the long-term target of maintaining a level of 4.0 or above.

Similarly, the level of fulfilment of action points from facilitations of local units’ adherence to the Novo Nordisk Way of Management was 93% in 2009, against a long-term target to maintain a level of 80% or above.

In 2008, we set a five-year goal to have diversity in terms of gender and nationality in all senior management teams. Achievement of this goal relies on training, talent management and succession planning; activities that have all been scaled up and intensified during the 12 months since the launch of a renewed strategy for diversity management. At the end of 2009, 50% of the senior management teams met the diversity criteria, an increase from 43% at the end of 2008.

Patients
Changing Diabetes^®, our commitment to give people with diabetes priority, drive health outcomes and break the curve of the diabetes pandemic, aims to deliver sustainable positive impacts for people with diabetes. Efforts are being made to improve systematic measuring, tracking and reporting on outcomes, from a patient perspective as well as the socioeconomic implications, of corporate-driven programmes as well as local initiatives.

Developing healthcare capacity to improve the ability to diagnose and treat diabetes is key to achieving sustainable results in terms of improved access to care and personal health. Over the years, our investments in training and education of healthcare professionals have been significantly scaled up. Since 2002, we have conducted training programmes for a total of 805,000 healthcare professionals worldwide. During 2009, we also reached out to 416,000 people with diabetes, offering training on how to manage their condition.

Our pricing policy for people with diabetes in the world’s poorest countries (LDCs), in place since 2001, is now well-established in these markets. In 2009, we sold insulin at or below the policy price, not to exceed 20% of the average prices in the Western world, to 36 out of all 49 LDCs, up from 32 out of 50 in 2008. Our long-term goal is for the differential pricing to be adopted in all LDCs.

Environment
Performance on environmental dimensions also improved, and we successfully exceeded long-term targets for reduction of CO₂ emissions, water consumption and total energy consumption. Our environmental targets and performance management focus on impacts from production. See p 89.

Climate action
Our aim has been to decouple environmental impacts from production growth and this has now been accomplished for CO₂ emissions. At the end of 2009, we surpassed our 2014 target of a 10% absolute reduction compared to 2004 – well ahead of time. This accomplishment is the result of energy savings in all production facilities globally. Savings from energy reductions in Denmark have been earmarked to purchase wind energy to supply power for Danish operations from Horns Rev 2 – an

offshore wind farm in the North Sea. The gradual conversion to renewable power supplies began in the second half of 2009 and is expected to be fully effective in 2010.

Resource efficiency
Consumption of water and energy for production decreased in 2009 by 34% and 19%, respectively, compared to the 2007 baseline. These reductions surpassed our long-term targets of 11% reductions in both areas by 2011 compared to 2007.

The total volume of waste increased to 21,019 tons in 2009 from 20,346 tons in 2008, while the recycling percentage stayed consistent at 51%. The increased waste volume relates to increases in production, but as we are aiming for absolute reductions of environmental impacts wherever possible, we intensified efforts to map and manage waste during 2009. Developing a long-term waste target is part of this process.

Phase 1
Studies in a small group of healthy volunteers, and sometimes patients, usually between 10 and 100, to investigate how the body handles new medication and establish maximum tolerated dose.

Phase 2
Testing a drug at various dose levels in a larger group of patients to learn about its effect on the condition and its side effects.

Diabetes care

Oral insulin
(Type 1 and type 2 diabetes)
We are exploring the possibilities of an oral insulin preparation to improve convenience of treatment. A phase 1 trial involving 84 people was initiated in November 2009.

Oral GLP-1
(Type 2 diabetes)
We are exploring the possibilities of an oral GLP-1 preparation to improve convenience of treatment. A phase 1 trial was initiated in January 2010 involving 155 people.

GIC
(Type 2 diabetes)
GIC, a combination of a basal insulin and a GLP-1 analogue, is being developed for people with type 2 diabetes. The phase 1 clinical trial initiated in 2009 involves 24 people.

NN9161
(Obesity)
We are developing NN9161 for the treatment of obesity. A phase 1 trial was initiated during 2009 involving approximately 140 overweight or obese but otherwise healthy people.

Biopharmaceuticals

Anti-C5aR
(Rheumatoid arthritis)
We are developing anti-C5aR, a monoclonal antibody blocking the C5aR receptor, for the intended treatment of rheumatoid arthritis. The ongoing phase 1 trial involves about 50 people.

NN8555
(Rheumatoid arthritis)
NN8555 is a monoclonal antibody intended for the treatment of rheumatoid arthritis. The phase 1 clinical trial, which involves around 50 people, was initiated in 2009.

Anti-IL20
(Psoriatic arthritis and rheumatoid arthritis)
We are developing a monoclonal antibody for neutralising the interleukin 20 protein, for the intended treatment of psoriatic arthritis and rheumatoid arthritis. The ongoing phase 1 development programme is expected to involve about 80 people.

Long-acting, recombinant factor IX derivative
(Haemophilia B)
We are devoloping a long-acting, recombinant factor IX derivative intended for the treatment of haemophilia B. The long duration of action is intended to support less frequent treatment administration and to enable the prevention of bleeding. The phase 1 clinical trial, begun in 2009, is expected to involve 15 people.

Subcutaneous, long-acting, recombinant factor VIIa derivative
(Haemophilia patients with inhibitors)
We are investigating the bioavailability of subcutaneous injections of a long-acting, recombinant factor VIIa derivative intended to improve treatment convenience. The phase 1 clinical trial, begun in 2009, is expected to involve about 30 people.

Diabetes care

Semaglutide
(Type 2 diabetes)
Semaglutide is a long-acting human GLP-1 analogue designed to treat type 2 diabetes. The phase 2 clinical trial involving more than 400 people was completed in 2009.

Biopharmaceuticals

Recombinant factor XIII analogue
(Cardiac surgery)
We are developing a recombinant factor XIII analogue intended for the treatment of patients undergoing cardiac surgery with cardio-pulmonary bypass to reduce the need for allogenic blood transfusions. The phase 2 clinical trial, involving about 400 people, was initiated in 2009.

Once-weekly growth hormone
(Growth hormone deficiency)
We are developing a long-acting growth hormone derivative intended to improve patient convenience by reducing the number of injections needed. In 2009, we completed a phase 2 clinical trial involving more than 30 adults with growth hormone deficiency and initiated a phase 2a trial involving approximately 30 children with growth hormone deficiency.

Long-acting, recombinant factor VIIa derivative
(Haemophilia patients with inhibitors)
We are developing a long-acting, recombinant factor VIIa derivative. With its long duration of action, it is intended to enable the prevention of bleeding in haemophilia patients with inhibitors. The phase 2 clinical trial, begun in 2009, is expected to involve about 25 people.

Fast-acting, recombinant factor VIIa analogue
(Haemophilia patients with inhibitors)
We are developing a fast-acting, recombinant factor VIIa analogue designed to deliver predictable, fast and sustainable clotting. The ongoing phase 2 clinical trial involves about 90 people.

Phase 3
Studies in large groups of patients worldwide comparing the new medication with a commonly used drug or placebo for both safety and efficacy in order to establish its risk–benefit relationship.

Filed/regulatory approval
A New Drug Application is submitted for review by various government regulatory agencies.

Diabetes care

Degludec (insulin degludec)
(Type 1 and type 2 diabetes)
We are developing a new generation of ultra-long-acting basal insulin analogue with a duration of action of more than 24 hours. Degludec is intended for the treatment of type 1 and type 2 diabetes in adults. A phase 3 development programme, BEGIN^™, expected to involve 7,000 people, was initiated in 2009.

DegludecPlus (insulin degludec/insulin aspart)
(Type 1 and type 2 diabetes)
We are developing a new generation of ultra-long-acting basal insulin with a bolus boost of rapid-acting insulin (NovoRapid^®). DegludecPlus is intended for the treatment of type 1 and type 2 diabetes in adults. A phase 3 development programme, BOOST^™, expected to involve 3,000 people, was initiated in 2009.

Liraglutide
(Obesity)
We are investigating the use of liraglutide as an antiobesity treatment. The ongoing phase 3 programme is expected to involve around 5,000 people and will focus on weight loss and prevention of weight gain in people with type 2 diabetes.

Biopharmaceuticals

Recombinant factor VIII
(Haemophilia A)
We are developing a recombinant factor VIII intended for the treatment of haemophilia A. In 2009, Novo Nordisk initiated a phase 3 clinical trial expected to involve about 140 people.

Recombinant factor XIII analogue
(Congenital factor XIII deficiency)
We are developing a recombinant factor XIII analogue intended to treat factor XIII deficiency. The phase 3 trial, fully enrolled in 2009, involves 40 people.

Diabetes care

Victoza^®
(Type 2 diabetes)
Victoza^®, the first once-daily human GLP-1 analogue, is targeted as a treatment for type 2 diabetes as an adjunct to diet and exercise, both as monotherapy and in combination with commonly used antidiabetic medications. The clinical development programme involved about 6,500 people. In 2009, Victoza^® was approved and launched in Europe. It was approved in the US and Japan in January 2010 and regulatory approval is pending in other markets.

Biopharmaceuticals

Vagifem^® low dose
(Hormone replacement therapy)
Vagifem^® low dose is a topical product for vaginal application. It was approved in the US in November 2009 and in Europe in January 2010.

Creating value
by improving
treatment
outcomes

Diabetes
care

Novo Nordisk has been in the business of diabetes for 85 years and has pioneered many therapeutic breakthroughs in diabetes care. Today, diabetes remains our primary focus, accounting for 73% of 2009 sales. The company is the market leader with 51% of the total insulin market and 45% of the modern insulin (insulin analogue) market, based on volume, at year end.

Diabetes is a metabolic disorder affecting the way our bodies use digested food for growth and energy. Much of the food we eat is broken down into glucose, the form of sugar in the blood. Glucose is the main source of fuel for the body. When we eat, the pancreas automatically produces the right amount of insulin to move glucose from blood into our cells. In people with diabetes, however, the pancreas either produces little or no insulin or the cells do not respond appropriately to the insulin that is produced.

We are dedicated to creating value for patients by changing diabetes – changing how it is treated, how it is viewed around the world, and how the future of the disease evolves. While we seek to offer innovative solutions that fit the way people want to live, changing diabetes cannot be achieved through science alone. We have to effect change at every level: in research, in education, in public policy, and in humanitarian and outreach efforts.

Range of treatment options
Our edge in scientific discovery and our expertise with proteins make us uniquely positioned to address the issues at the core of the diabetes epidemic: insulin deficiency and the complexities of treating it. Our goal is to offer people with diabetes, and their healthcare providers, a wide range of treatment options.

We are the only company with a full portfolio of modern insulins. We also produce the most widely used prefilled and durable insulin pen devices in the world. Beginning with the first patients treated with insulin in the 1920s, we have been dedicated to continuously improving the safety, effectiveness and convenience of diabetes treatment.

Our leadership position within diabetes care is bolstered by the fact that we are the only company with two new-generation insulins in late-stage clinical development. If successful, this new generation of insulins is expected to offer even better treatment outcomes and convenience for people with diabetes.

Novo Nordisk is looking at new ways to prevent type 2 diabetes by treating its prestages, including obesity, which is known to be a major risk factor in developing type 2 diabetes. We are conducting a phase 3 trial for liraglutide treatment of obesity. From a

Photo: To improve treatment compliance and outcomes, we look for new ways to make it easier for people with diabetes to take insulin and make sure that products more closely resemble the body’s natural insulin curve. Ib Jonassen, senior principal scientist and project director, Diabetes Protein Engineering, is one of the inventors of Degludec, a new insulin under development. Ultra-long-acting Degludec is in phase 3 clinical trials.

The results demonstrated that patients with type 2 diabetes can achieve good blood glucose control sustained over three years with low rates of hypoglycaemia using Levemir^®, NovoMix^® and/or NovoRapid^®. Patients starting on Levemir^® had the lowest weight gain.

“Tight blood glucose control is widely believed to be difficult to achieve because of a high risk of hypoglycaemia,” notes Mads Krogsgaard Thomsen, executive vice president and chief science officer. “The Treat-to-Target study shows that this need not be the case.”

Continuous innovation
As more people throughout the world develop diabetes, there is a growing need for more treatment options to help manage symptoms and arrest disease progression. Studies have found that convenience and safety are linked to higher rates of treatment compliance, which in turn is linked to better health outcomes.

We are working on two new-generation insulin products, Degludec and DegludecPlus, which are intended to be even longer acting to improve treatment outcomes and provide more convenient insulin therapy with a possibility of fewer injections. Currently in phase 3 development, the Degludec and DegludecPlus development programmes will involve more than 10,000 patients from 39 countries around the world.

The trial programme for Degludec is known as BEGIN^™ and will involve more than 7,000 patients. Degludec has so far demonstrated an ultra-long duration of action of more than 24 hours, offering the potential of greater dosing flexibility and lower risk of hypoglycaemia. The trial programme for DegludecPlus is called BOOST^™ and will recruit over 3,000 patients. DegludecPlus is the first soluble combination of an ultra-long-acting basal insulin with a boost of rapid-acting insulin (NovoRapid^®).

Oral formulations
Most people would prefer a tablet to an injection. However, because insulin is a protein, it is rapidly destroyed or degraded in the gastrointestinal tract. The challenge is to move a purpose-designed insulin analogue through the gut to exert its therapeutic effect on blood glucose.

At the end of 2009, we initiated a phase 1 clinical trial for an oral insulin analogue. This project combines our unique expertise with insulin design in a partnership with Merrion Pharmaceuticals, which has expertise in mechanisms for transporting proteins through the gastrointestinal tract.

We also initiated a phase 1 clinical trial of an oral formulation of GLP-1 in January 2010. This formulation was designed in partnership with Emisphere Technologies. In addition, we have built on our internal capabilities in basic science and protein tablet formulation and have established tablet production facilities for these clinical development programmes.

While the development of these new products is still at an early stage and many technological challenges remain, significant progress has been made, and both our partners and we are enthusiastic about the potential within this area.

Safety profile
In the summer of 2009, research studies linking certain insulin analogues to an increased risk of cancer were published in the

official journal of the European Association for the Study of Diabetes, Diabetologia².

Insulin can bind to two different receptors in the body: insulin and IGF-1 (Insulin-like Growth Factor-1) receptors. It has long been known that certain insulin analogues are more likely to bind to IGF-1 receptors. For this reason, all Novo Nordisk insulin analogues developed during the past 20 years have been engineered with molecular safety in mind and rigorously tested for IGF-1 receptor binding in very early research phases. We have only proceeded to develop modern insulins with a molecular safety profile similar to, or better than, that of human insulin.

While insulin can have a growth-promoting effect on cells, extensive clinical testing has provided evidence that Novo Nordisk’s modern insulins have clinical advantages for many patients with diabetes compared to human insulin, and each insulin has a molecular safety profile as good as or better than human insulin. All Novo Nordisk insulin analogues on the market have been investigated in many randomised, controlled trials and in observational studies, and they are also monitored for any safety signals through rigorous post-marketing safety surveillance.

Device innovation
In our device pipeline, we strive to continuously improve chronic disease therapy with more accurate, convenient and user-friendly devices. Convenience and simplicity can be factors in treatment compliance, with direct implications for health.

FlexPen^®, the world’s best-selling prefilled insulin pen³, is available for Levemir^®, NovoRapid^®/NovoLog^® and NovoMix^®/NovoLog^® Mix. It eliminates the need to manually load insulin into a delivery device or use a separate vial and syringe. Once in use, the prefilled pen may be stored at room temperature for 14 days or more, which can be important to suit flexible lifestyles. FlexPen^® is made of a recyclable plastic, which has the potential to reduce environmental impact.

The new award-winning⁴ NovoTwist^® needle was launched in Europe in 2009 and will be introduced to additional markets in 2010. NovoTwist^® has a simple ‘just twist’ attachment and detachment that makes injection easier for people using FlexPen^® or taking Victoza^®5,6.

Our newest device, NovoPen Echo^™, is a colourful pen with dose settings in half-unit increments, suitable for children needing small doses. It features a simple and intuitive memory function that makes it easy to check, the time lapsed since the last dose was taken. NovoPen Echo^™ was announced in Europe in 2009 and will be launched in 2010.

Changing Diabetes^®
Diabetes and other chronic, non-communicable diseases are a leading threat to human health and development. Diabetes kills almost as many people as HIV/AIDS, disables millions of people and is already causing damage to the global economy. The International Diabetes Federation estimates that the number of people with diabetes will increase from 285 million today to 438 million in 2030⁷.

As a world leader in diabetes care, we have the potential and responsibility to make a difference for people with diabetes, facilitating change in addition to providing innovative treatments. We do this through a concerted effort called Changing Diabetes^®,

scenario describes how communities and healthcare systems will be impacted as obesity, which can be a precursor of diabetes, becomes increasingly common around the world.

Expanding access
Building sustainable partnerships to expand access to diabetes treatment and develop healthcare system capacity is the primary goal of our long-term efforts to change the diabetes epidemic in developing countries. Our commitment extends to people who lack access to treatment, those who face barriers due to inadequate healthcare infrastructures and the high out-of-pocket costs that can be a part of having a progressive, chronic disease.

Our significant contribution to the improvement of diabetes care in the developing world includes our continued long-term financial commitment to the World Diabetes Foundation, totalling 1.2 billion Danish kroner allocated over 15 years (see p 84.)

The independent and non-profit foundation supports the prevention and treatment of diabetes where it is needed most, providing funding for local initiatives that improve healthcare capacity. Since it was founded by Novo Nordisk in 2001, it has supported 219 projects in 90 countries. The foundation’s annual report is online at worlddiabetesfoundation.org.

Beyond our donations to the World Diabetes Foundation, our approach to expanding access builds on the right to health and aligns with the UN Millennium Development Goals, which offer a common vision for tackling some of the major challenges facing the world by 2015.

Over the next decade, our emphasis will be on areas selected because of their ability to have an impact on current and future generations, with a long-term impact consistent with our role as a sustainable business. Our areas of emphasis support three of the UN Millennium Development Goals.

Treating children with type 1 diabetes
Despite progress, children with type 1 diabetes in developing

countries continue to have high mortality rates, with life expectancies of less than one year in sub-Saharan Africa.

To reduce child mortality – UN Millennium Development Goal 4 – Novo Nordisk has made an ambitious five-year, 25-million-dollar commitment to treat children with type 1 diabetes. The Changing Diabetes^® in Children programme responds to the International Diabetes Federation’s call that no child should die of diabetes. Our goal is to work in cooperation with local partners, including governments and diabetes associations, to build sustainable national capacity in some of the world’s poorest countries and create well-functioning diabetes clinics for treatment of children with type 1 diabetes.

The programme provides the necessary medical and laboratory equipment, organises training of healthcare professionals, puts in place diabetes patient education, and creates systems for adequate monitoring and follow-up. In addition, insulin and diabetes supplies are being provided free of charge for the duration of the programme

In Bangladesh, one of the countries in the world with the lowest healthcare spending per capita, the programme has been rolled out as a joint initiative with the Diabetic Association of Bangladesh (BADAS). As in most other developing countries, there are no existing facilities for treating children with diabetes. “Currently, children with diabetes are managed primarily by adult diabetes clinics or general medical outpatient clinics, but treating diabetes in children is different from treating diabetes in adults,” says Professor Azad Khan, president of BADAS. “They have other needs and delayed treatment can often lead to devastating complications.”

More than 400 children were diagnosed and enrolled during 2009 in Bangladesh, Cameroon, Democratic Republic of Congo, Guinea, Tanzania and Uganda. Our ambition is to reach 10,000 children as we expand the programme into additional countries over the next few years.

Diabetes in pregnancy
Due to the decreasing age of onset for type 2 diabetes, growing numbers of women have diabetes prior to pregnancy. Diabetes makes pregnancies higher risk and can lead to long-term com- plications for both mother and child.

Over 10 million women develop gestational diabetes during pregnancy every year. More than half of women who develop gestational diabetes will go on to develop type 2 diabetes during the next decade, and their children have a substantially increased risk of developing type 2 diabetes. Supporting healthy pregnancies is therefore important to reverse the diabetes pandemic.

In support of Millennium Development Goal 5, targeting maternal health, we are initiating activities to raise awareness of the impact of diabetes in pregnancy, address knowledge gaps, support community-based maternal health programmes and advocate for sustainable change, which ultimately will increase access to diabetes screening, treatment and lifestyle education. Through our commitment to address the needs of women with diabetes, we aim to improve the health outlook for women and their families today as well as for future generations.

Pricing in developing countries
The cost of therapy still constitutes a significant barrier for better healthcare in the developing world. In many countries, the availability of medicines at public health facilities is often very poor due to inadequate funding, lack of incentives for maintaining stocks, inability to forecast accurately or inefficiencies in procurement, supply and distribution. Among the targets for UN Millennium Development Goal 8 is a call for cooperation from pharmaceutical companies to provide access to affordable essential drugs in developing countries.

Through our long-standing differential pricing policy for the least developed countries (LDCs), as defined by the United Nations, we sell insulin at or below 20% of the average prices for insulin in the Western world. Each year we offer differential pricing in all LDCs. In 2009, either governments or non-profit organisations in 36 of these countries chose to purchase at the differential prices. See p 93.

Building partnerships and capacity
The huge challenge of tackling development and diabetes poses numerous dilemmas for the developing world that require innovative approaches. While our strength is in diabetes care, working in partnership is crucial to help address organisational matters and increase the impact of our efforts.

Novo Nordisk already has a long history of working in partnership with governments, ministries of health and other partners through our World Partner Project. Launched in 2001, the project focused on developing models for addressing diabetes healthcare in developing countries. Together with partners, the World Partner Project has had an impact through 31 programmes in eight countries (Bangladesh, Malaysia, Tanzania, Zambia, El Salvador, Costa Rica, China and India). Lessons from these projects continue to inform our approach for fostering sustainable diabetes care.

We continue to seek innovative partnerships to improve access to diabetes care for these vulnerable populations not being supported in their current system.

Photo: To increase access to all people with diabetes, Mapoko Mbelenge Ilondo, programme director, Global Diabetes Partnerships, builds models for sustainable public–private partnerships in developing countries. In Tanzania, for example, Ilondo has worked with the health ministry and the diabetes association to integrate diabetes care into the country’s healthcare system.

Creating value
by improving
treatment
convenience

Biopharmaceuticals

Our specialised expertise with proteins and our understanding of chronic disease are leveraged in our biopharmaceuticals business to develop innovative and improved ways to treat haemophilia and other rare coagulation disorders, growth hormone deficiency, the symptoms of menopause and inflammatory diseases.

Commitment to haemophilia

Haemophilia is an inherited or acquired coagulation disorder and people living with haemophilia lack, either partly or completely, an essential clotting factor necessary to form blood clots. The main danger is uncontrolled internal bleeding, which can cause stiffness, pain, severe joint damage, disability and even death.

Novo Nordisk has a heritage of improving existing standards of care. For this reason, our haemophilia pipeline has expanded to include compounds targeting faster and more efficient treatment of episodic bleedings, long-acting compounds to allow for less frequent infusions and products administered by the more convenient subcutaneous route.

We have a solid position in the treatment of haemophilia patients who have developed inhibitors, or antibodies, to their missing coagulation factor. NovoSeven^® remains the only recombinant treatment option for these patients. Our pipeline includes two potential successors to NovoSeven^®: a long-acting, recombinant factor VIIa derivative and a fast-acting, recombinant factor VIIa analogue. Both are in clinical development.

“In the absence of a cure, the challenge is to provide effective, safe and convenient treatments that prevent bleeding as far as possible,” says Anne Prener, corporate project vice president of Haemostasis Management.

Expanded pipeline
Our ambition is to use our understanding of haemophilia to develop new compounds to offer improved treatment options for all people with haemophilia and for the treatment of many rare coagulation disorders.

In order to improve upon existing treatments for haemophilia A using factor VIII, we had to first produce a third-generation factor VIII compound. We expect to launch this new recombinant factor VIII treatment for haemophilia within the next few years while we continue to develop a longer-acting formulation. Our goal is to

Photo: Egon Persson, principal scientist, Haemostasis Biochemistry, is an inventor of a fast-acting, recombinant factor VIIa analogue currently in a phase 2 clinical trial. A potential successor to NovoSeven^®, it is intended to deliver predictable, sustainable clotting fast, as shown in the diagram.

improve treatment by developing a long-acting concentrated formula to reduce frequency and infusion times, which can be as long as 45 minutes every other day.

During 2009, we initiated a phase 1 trial for a long-acting, recombinant factor IX compound for haemophilia B that is intended to be used once a week. This would offer patients greater convenience compared to current prophylactic treatments to help prevent bleeding, which have to be infused twice a week.

In most of the world, patients with congenital factor XIII deficiency do not have any treatment options. The only treatment available in some countries is made from human plasma, which may involve risk of bloodborne viruses. Our phase 3 clinical trial for a safer recombinant factor XIII treatment involves 40 patients and is expected to be completed in 2010. We are investigating the same molecule to reduce the need for blood transfusions for cardiac surgery patients.

New generation of NovoSeven^®
Novo Nordisk developed NovoSeven^® for the 3,500 people with haemophilia who develop inhibitors, or antibodies, to other replacement factor therapies. Our factor VIIa product, NovoSeven^®, was a significant innovation when launched and remains the only recombinant medication available for haemo-philia patients with inhibitors. It provides effective treatment for rapid control of bleeding episodes and has been a major advancement in the treatment of haemophilia patients who have developed inhibitors, for whom there were few other treatment options. NovoSeven^® is also the only recombinant medication approved for the treatment of bleeding episodes in acquired haemophilia factor VII deficiency and, in Europe, Glanzmann’s thrombasthenia.

Our continuous efforts to make NovoSeven^® more convenient and more effective include the launch in 2008 of a NovoSeven^® room temperature stable formulation that has a smaller infusion volume for added convenience. Because NovoSeven^® room temperature stable does not need to be refrigerated, it is portable, which may allow bleeds to be treated faster⁸. After initial launch in the US in 2008, we successfully introduced the product in 24 markets in 2009.

Novo Nordisk has a heritage of improving existing standards of care. Our long-term ambition is to develop more effective, safe and convenient treatment options for people with haemophilia.

To develop new therapeutic approaches for prevention of bleeding based on the established efficacy of factor VIIa, we initiated a phase 2 clinical trial in 2009 for a long-acting derivative of recombinant factor VIIa. The same molecule is also being investigated for subcutaneous use. Another phase 2 trial is currently ongoing to determine the optimal dose and safety profile of a new recombinant factor VIIa analogue with an even

faster onset of action than NovoSeven^® and the ability to form even stronger clots in a shorter time.

Expanding access to care
As our focus on haemophilia has expanded, so has our commitment to the global haemophilia community. We established the Novo Nordisk Haemophilia Foundation in 2005 to address the significant need for improving haemophilia care and treatment in developing countries, where haemophilia is not a healthcare priority and many patients go undiagnosed or are inadequately treated. Our donations to the NNHF, including 15.4 million Danish kroner in 2009, support 28 projects and five fellowships in 24 developing and emerging countries. By working with partners across all areas of the haemophilia community with local ownership of projects, the NNHF aims to ensure the sustainability of development programmes. See nnhf.org for more information.

Changing Possibilities in Haemophilia^®

Building on our long-standing concerted efforts in diabetes, called Changing Diabetes^®, we launched a similar strategic initiative in late 2008 called Changing Possibilities in Haemophilia^®. Under this umbrella, we seek to partner with physicians and the wider haemophilia community to help build a better tomorrow for people with haemophilia. We also collaborate with governments and healthcare policy-makers to track quality of life issues for people who have haemophilia, and help set standards for the level of treatment that this patient group receives.

We partner with physicians and the wider haemophilia community to help build a better tomorrow for people with haemophilia.

Collaboration with the haemophilia community
To strengthen our collaboration with the global haemophilia community, we have embarked on a psychosocial study to determine how to best support the needs of those with haemophilia. A multi-disciplinary team of healthcare professionals and patient representatives met in Montreal, Canada, in September 2009 to establish a global advisory board on psychosocial issues in haemophilia. Based on discussions from this meeting, we are beginning a structured process of enquiry, seeking a broad spectrum of input about life with haemophilia in the family, the school setting, the workplace and the wider community. Our hope is that findings from the study will uncover ways to improve the quality of life for people with haemophilia and those caring for them. The programme will be conducted in close collaboration with experts and patient representatives and is inspired by our existing DAWN^™ (Diabetes Attitudes Wishes and Needs) programme.

In 2009, we also made a commitment with the World Federation of Hemophilia to further the haemophilia cause each year on World Hemophilia Day as an official sponsor.

Continued medical education
Some types of haemophilia are particularly rare, so few health-care providers have extensive experience with treatment. Through the Novo Nordisk Haemophilia Grants & Awards programme, Access to Insight, we offer support to encourage doctors and scientists to enhance their understanding of haemophilia and share best practices for treatment to improve care. We also sponsor an accredited training programme and scientific sessions at major congresses such as the World Federation of Hemophilia and the International Society of Thrombosis and Haemostasis.

Leadership and innovation

In determining which businesses our company should be in, we consider our core strengths in protein engineering and chronic disease as well as the potential for global market leadership.

Leadership and innovation in human growth hormone
Through our expertise in protein synthesis based on recombinant technology, Novo Nordisk has become one of the world’s leading producers of human growth hormone. Norditropin^® builds on our 40-year commitment to growth hormone treatment and is a market leader because it is unique: it is the only liquid growth hormone product with a formulation that does not require refrigeration and is available in a prefilled, ready-to-use device.

Growth hormone deficiency affects the pituitary gland, a small gland located at the base of the brain that produces growth hormone and other hormones. If the pituitary gland does not produce enough growth hormone, growth is slower than normal. Children need growth hormone to grow to normal height. In adults, growth hormone is needed to maintain the proper amounts of body fat, muscle and bone. Research shows that children with short stature are more likely to experience difficulty at school and adults with growth hormone deficiency have poorer-than-average health-related quality of life.

Since human growth hormone is a protein that can work effectively only through injection, we have drawn on our technological expertise in injection devices to improve growth hormone delivery systems and products. We launched new devices in some markets in 2009, including an improved NordiFlex^™ pen, which studies indicate has a 40% lower dose force.

To further ease treatment for patients with this chronic deficiency, we are also developing a once-weekly growth hormone derivative to reduce the number and frequency of injections. A phase 2 trial of this compound was successfully completed in adult patients in 2009.

Supporting improved treatment outcomes
To improve treatment outcomes for people with growth hormone deficiency, we support healthcare provider education and scientific research. NordiScience^® supports physicians with endocrine

research and educational services and support, including clinical symposia, fellowship grants and access to scientific publications.

NordiNet^®, an international outcome study including data from more than 5,000 patients, is one example of our commitment to long-term studies that track treatment success and safety. The NordiNet^® platform is an electronic data-capturing tool for patient outcome evaluations that gives healthcare providers in certain countries access to software that determines bone age.

Since human growth hormone is a protein that can work effectively only through injection, we have drawn on our technological expertise in injection devices to improve growth hormone delivery systems and products.

Low-dose hormone replacement
Novo Nordisk launched its first low-dose hormone replacement product, Activella^®, in the US in 2008. It was introduced as Activelle^® in Europe in 2009. Our low-dose topical hormone replacement treatment, Vagifem^®, was approved in the US in November 2009 and by EU regulatory authorities in January 2010.

These products build on our 25 years of experience with hormone treatment for menopausal symptoms. Our long-standing position is that hormone replacement therapy for women should be prescribed at the lowest effective doses and for the shortest time periods consistent with treatment goals and risks assessed for individual women.

Development projects target inflammatory diseases
Leveraging our protein expertise to help patients with other types of chronic disease and add to our clinical pipeline of products, we now have three projects in early clinical development targeting chronic inflammatory conditions. These projects target rheumatoid arthritis, psoriatic arthritis and systemic lupus erythematosus.

By investing in early-stage research in this field we hope to find the underlying causes of different inflammatory conditions and

How
we work

Making a difference to patients and society is what we are all about. If we can improve treatment outcomes for people with chronic diseases, keeping them healthy and productive, we can help not only individuals needing treatment but also their families and their communities.

Our aspiration is to be the world’s leading diabetes care company and, ultimately, to defeat diabetes and leverage our expertise in the fight against other chronic, non-communicable diseases. This is our core business proposition, the essence of Novo Nordisk’s contribution to sustainable development and the heart of our vision.

We accomplish this by expressing our values in all of our actions, focusing on patients first. Our impact on society is reflected by the number of patients who benefit from our products and our efforts to catalyse change in healthcare systems and train patients and healthcare providers.

Novo Nordisk Way of Management

The Novo Nordisk Way of Management, the framework within which we work, supports our culture of innovation and responsibility. Aligned with the principles of the United Nations Global Compact in the areas of human rights, labour, the environment and anti-corruption, the Novo Nordisk Way of Management ensures the long-term growth and welfare of our company and helps us find the right balance between compassion and competitiveness.

In 2009, we continued to drive initiatives related to the UN Global Compact principles across our value chain. Many of these initiatives are described in the following pages. A comprehensive account is found in our annual Communication on Progress. See annualreport2009.novonordisk.com/governance-and-reporting/ un-global-compact.aspx.

The Novo Nordisk Way of Management includes our vision, our values and our commitment to the Triple Bottom Line principle. A follow-up methodology for auditing and validating performance and policies in key areas supports cross-organisational understanding and helps ensure implementation.

While our values are global, they are also owned and lived at a local level, providing flexibility and fostering diversity in ideas. As our business grows, the Novo Nordisk Way of Management provides

Photo: Our partnership approach to addressing climate change and preparing our business for a carbon-constrained future resulted in a new business model that has helped drive the market for renewable energy. Priya Matzen, programme director, Global TBL Management, has been a driving force behind our climate strategy. See pp 31 and 35.

a foundation to ensure that we stay on course, focused on innovating in ways that support our vision and are consistent with our values.

“Achieving targets is only one aspect of performance. It is just as important that employees work in a way that expresses Novo Nordisk’s core values,” says Lars Rebien Sørensen, president and chief executive officer.

The Novo Nordisk Way of Management’s follow-up methodology provides a tool to assess the degree to which values are embedded in our actions and operations. It also helps ensure that the framework can stand the test of time and different cultures.

The entire framework for the Novo Nordisk Way of Management is detailed at novonordisk.com/about_us.

Triple Bottom Line management
We are committed to operating in a way that is financially, environmentally and socially responsible. Anchored in the company’s bylaws, the articles of association, and the Novo Nordisk Way of Management, our commitment to the Triple Bottom Line principle helps us balance short-term profitability with longer-term societal interests.

Applying the Triple Bottom Line principle in decision-making serves two purposes. It builds trust and protects our licence to operate and it helps drive innovation and long-term growth. This is how Triple Bottom Line management generates value.

We monitor trends that could impact our business success and proactively respond to stakeholder expectations and emerging

issues such as the right to health, business ethics and bioethics. We also take responsibility for addressing global challenges that are critical to our ability to manage a sustainable business for the long term.

We focus on fighting the diabetes pandemic and confronting the climate change challenge. These are areas where we have an opportunity and an obligation to put effort behind making a real difference. Our impact goes beyond our own operations; by demonstrating results we can inspire others to join forces. We also seek to influence public policy and drive societal change towards more sustainable practices.

Measuring values-based orientation
As part of the follow-up methodology, we have a global facilitator team consisting of senior people with deep understanding of our business and the business environment. They evaluate the extent to which business units operate in compliance with the Novo Nordisk Way of Management, and the team has a formal reporting line to the chairman of the Board.

“Facilitation is the follow-up method used to document compliance regarding the Novo Nordisk Way of Management,” says Kim Bundegaard, senior vice president, Business Assurance. “It provides a systematic approach to gaining insight into how units in the organisation are living the Novo Nordisk Way of Management.”

For some units, facilitations take place annually; for others, the process takes place once every three years. From 30 September 2008 to 30 September 2009, 70 facilitations were conducted, covering units with more than 12,000 employees. Of these, more than 3,000 employees were interviewed to determine how corporate values are being lived and implemented throughout the organisation.

Observations from this process were reported to the Board in December 2009. To maintain a strong level of compliance, more than 300 recommendations or actions were issued during the 2009 facilitations. Areas identified for increased focus include future business direction and prioritising process improvement initiatives.

Our impact on society

We hold ourselves accountable to shareholders and other stakeholders that may affect or be affected by the company’s activities. As a business, Novo Nordisk generates wealth for society and contributes to socioeconomic development through sustainable business practices, investment and employment. As a pharmaceutical innovator, we provide knowledge, research and development and healthcare products. Our outreach programmes also improve awareness, diagnosis and treatment.

Engaging stakeholders

The burdens of chronic disease will grow and challenge societies in new ways as the global population expands and ages and increasing urbanisation contributes to more sedentary lifestyles. By involving stakeholders and working in partnership, we believe we can better understand these challenges and cocreate solutions that are more likely to succeed.

Our key stakeholders are patients. We engage with all other stakeholders – including healthcare providers, payers, employees, investors, suppliers and other business partners – in support of improved treatment outcomes for people with diabetes and other chronic diseases. Examples of our stakeholder engagement and partnerships are included in this section, but other examples can be found throughout this report and online at annualreport2009. novonordisk.com/stakeholder-engagement.aspx.

How we engage
Long-term partnerships have for many years created value for Novo Nordisk and for society. We partner with others to address societal problems that are integral to our long-term business success, to leverage our assets and expertise to deal with the problem, to play a role in mobilising stakeholders and driving concerted action, and finally to measure and learn from results.

Recognising the complexity of climate change, we have taken a partnership approach to address it, teaming up with others who have specialist knowledge in the field. Our CO2 reduction target was set in close collaboration with the World Wildlife Fund (WWF) under the WWF Climate Savers Programme. Our ongoing partner ship with DONG Energy (see p 36) has allowed us to find a cost-neutral way of converting power supplies for our Danish operations to wind energy, an important element in achieving the target.

When setting the target, we shared internal data with WWF and had a very open dialogue. WWF challenged us to set the bar higher than we would have otherwise done.

The UN Resolution on diabetes, adopted in December 2006 to increase awareness of the growing diabetes pandemic and develop policies for the prevention, treatment and care of diabetes, is one example of the kind of change that is possible through long-term partnerships. It was the result of a multi-stakeholder campaign led by the International Diabetes Federation in which Novo Nordisk was an active and supportive partner. It recognises the urgent need to pursue multilateral efforts to promote and improve human health and encourages UN member states to have strategies for diabetes prevention, diagnosis and treatment as part of the sustainable development of healthcare systems.

Patient support
Our core business is to help people, seeking to reduce suffering and improve health. Our commitment to patients is paramount, and engaging with patients and patient organisations and understanding their needs is an important part of how we work.

An example of the value of patient dialogue is the DAWN^™ programme – the largest global survey to uncover the psychosocial

aspects of diabetes and the attitudes, wishes and needs of people with diabetes. Initiated by Novo Nordisk in 2001, the survey included people with diabetes and healthcare professionals from 13 countries.

Today, DAWN^™ serves as a patient advocacy platform, calling for concerted action to improve diabetes care in more than 30 countries and influencing academic research, educational programmes and new approaches to treatment at hospitals and clinics. In some countries, national task forces and coalitions are now coordinating efforts to implement patient-centred care and community initiatives inspired by DAWN^™ surveys.

Since the DAWN^™ study started in 2001, other international studies have been completed, including the DAWN^™ MIND study. The DAWN^™ MIND study aims to implement monitoring of well-being in people with diabetes as part of routine diabetes care. Monitoring helps identify psychological needs that are otherwise likely to stay unrecognised.

We are also launching a psychosocial survey of people with all types of haemophilia to better understand their needs and wishes and help support efforts to improve care. See p 26.

Collaborating for innovation
Our commercial focus is on a few mutually re-enforcing protein-based therapeutic areas. Within each, we are committed to improving the quality of life for people living with the particular disease. We search for innovative biologics at all stages of development, from early discovery to clinical phases.

Always a pioneer in scientific innovation, we have entered into preliminary collaborations with biotechnology-based research companies, resulting in many technological advances. These include our work with research and development companies to formulate therapeutic proteins and generate human monoclonal antibodies. One example of our success in collaborating to drive innovation is our clinical development of oral insulin and GLP-1 formulations. See p 20.

By involving stakeholders and working in partnership, we believe we can better understand healthcare challenges and cocreate solutions that are more likely to succeed.

Our responsible sourcing programme is another example of how our commitment to partner with others is integrated in the way we do business. The programme also underpins the company’s commitment to the UN Global Compact and the Universal Declaration of Human Rights. We have established a methodology for assessing our supplier base, including screening principles and a model to map and manage social and environmental risks relevant for different types of procurement.