(MENAFN- AFP) The world's biggest insulin maker Novo Nordisk Thursday reported rising quarterly profits but cut its yearly sales forecast over the loss of a key US contract and changes to inventory levels.
Net profit rose 7.9 percent in the first quarter of the year from the same period in 2013 to 6.458 billion kroner (716 million euros, $1.2 billion), slightly above the 6.35 billion kroner forecasted by analysts polled by Dow Jones Newswires.
Revenue rose 1.8 percent to 20.343 billion kroner, but slightly below market expectations of 21.13 billion.
"We are pleased to reiterate our expectations for operating profit growth for 2014 despite a challenging start of the year and a lower outlook for sales growth," chief executive Lars Rebien Soerensen said in a statement.
The group said it expects sales in local currencies to grow between seven and 10 percent this year, down from a January prediction of eight to 11 percent, hit by a strong Danish currency.
It however maintained its operating profit growth guidance of around 10 percent in local currencies.
The group said it expected a "continued robust performance" from Victoza, which controls blood sugar levels by mimicking an intestinal hormone called GLP-1, and long-acting insulin Tresiba.
However, it expected some of that growth to be offset in the US by "a challenging rebate and contract environment," generic competition to (oral blood glucose-lowering drug) Prandin, and intensifying competition.
"The revised outlook reflects a more modest growth of the GLP-1 segment as well as a negative impact from changes to inventory levels at wholesalers and an earlier impact of the partial loss of reimbursement with a large pharmacy benefit manager in the US," the Danish group said.
Novo Nordisk last year lost a major contract with US health benefit manager Express Scripts, which negotiates drug prices for millions of insured Americans.
Jyske Bank said it was surprised by Novo Nordisk's sales target cut but added that it still viewed the shares as undervalued.
Novo Nordisk has almost half the global insulin market, which has grown rapidly in recent years following a rise in the number of people suffering from diabetes, estimated by the World Health Organization to stand at nearly 350 million.
The company is also involved in haemophilia care, growth hormone therapy and hormone replacement therapy.
Shares in Novo Nordisk were 3.17 percent lower in mid-morning trading on the Copenhagen stock market, where the main index was 1.11 percent lower.
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