QUALITY
`
`wii e) a
`
`novo nordisk
`annualreport 2011
`
`
`
`LVF
`
`05/15/24
`
`Oo
`
`NOVO NOFAIS
`
`MPI Exhibit
`
`:
`
`1130 A ,
`
`MPI EXHIBIT 1130 PAGE 1
`
`MPI EXHIBIT 1130 PAGE 1
`
`

`

`Key Tigures
`2011
`
`Financial performance
`Sales total
`Diabetes care
`—of which modern insulins
`— af which Victoza®
`Biopharmaceuticals
`Gross profit
`Gross margin
`Sales and distribution costs
`Research and developmentcosts
`Administrative expenses
`Operating profit
`Netprofit
`Effective tax rate
`Capital expenditure, net
`Free cash flow
`
`Long-term financial targets
`Operating profit margin
`Growthin operating profit
`Operating profit after tax to net operating assets’
`Cash to earnings (three-year average)
`
`Social performance
`Healthcare professionals trained or educated in diabetes
`Donations
`Employees(total)
`Averageof full-time employees
`Employee turnover
`Relevant employees trained in business ethics
`
`Long-term social targets
`Least developed countries where Novo Nordisk
`sells insulin according to the differential pricing policy
`Engaging culture
`Diverse senior management teams
`
`Environmental performance
`Energy consumption
`Water consumption
`CO, emissions from energy consumption
`
`
`
`DKK million
`DKK million
`DKKrnillion
`DKK million
`DKK million
`DKK million
`56 of sales
`% of sales
`% of sales
`% of sales
`DKK million
`DKK million
`%
`DKK million
`DKK million
`
`%
`%
`%
`%
`
`1,000
`DKK million
`Number
`Number
`%
`%
`
`%
`Scale 1-5
`3
`
`1,060 GJ
`1,660 m3
`1,000 tons
`
`2010
`
`60,776
`45,710
`26,601
`2,317
`15,066
`49,096
`80.8
`29.9
`15.8
`5,0
`18,891
`14,403
`21.2
`3,308
`17,013
`
`S11
`26.5
`63.6
`115.6
`
`373
`B4
`30,483
`29,423
`9.1
`98
`
`67
`43
`54
`
`2,234
`2,047
`95
`
`Change
`
`9.2%
`10.3%
`8.1%
`158.6%
`5.7%
`9.5%
`
`18.4%
`18.7%
`
`(9.2%)
`6.5%
`
`Long-term
`financial targets!
`35%
`15%
`90%
`50%
`
`123.9%
`(3.6%)
`7.0%
`7.1%
`
`Long-term
`social targets
`100%
`4.0
`100% by 2014
`
`(2.1%)
`4.3%
`(2.1%)
`
`Long-term
`environmental targets
`Long-term environmental targets
`
`
`Energy consumption {change compared with 2007) (20)=11% reduction by 2011%
`
`Water consumption (change compared with 2007} (37)=11% reduction by 2011%
`
`
`
`COemissions from energy consumption (change compared with 2004)
`%
`(55)
`10% reduction by 2014
`
`Share performance
`Diluted earnings per sharefADR
`Dividend per share (proposed)
`Closing share price {B shares)
`Market capitalisation (B shares}?
`
`DKK
`DKK
`DKK
`DKKbillion
`
`24.60
`16.00
`629
`292
`
`21.9%
`40.0%
`4.9%
`1.4%
`
`1. The long-term financial targets were updated in February 2012.Please refer to p 6.
`2. Move Nordisk B shares {excluding treasury shares),
`
`See more performance highlights on pp 14-15.
`
`MPI EXHIBIT 1130 PAGE 2
`
`MPI EXHIBIT 1130 PAGE 2
`
`

`

`For nearly 90 years, Nove Nordisk has combined drug discovery
`with technology to turn science into sclutions for people with
`diabetes. Wealso provide treatments for people with haemophilia
`and growth hormone deficiency and for women experiencing
`symptoms of menopause. We leverage our expertise with protein
`molecules, chronic disease management and device technology
`to provide innovative treatments that make a differencein quality
`of care.
`
`Novo Nordisk has more than 32,000 employees in 75 countries
`and markets products in more than 190 countries. Our B shares
`are listed on NASDAQ OMX Copenhagen and our ADRsarelisted
`on the New York Stock Exchange under the symbol NVQ. For more
`information about our company,visit novonordisk.com.
`
`
`
`We report on our financial, social and environmental performance
`in one integrated report and we report additional information
`online. This public filing contains references and links to information
`posted on the company’s website; such information is not incor-
`porated by referenceinto the public filing. The managementreview,
`as defined by the Danish Financial Statements Act, is comprised
`of pp 2-54 and 100-101.
`
`Material and business-critical information is reported in the annual
`report. Information forspecific stakeholder groupsis reported at
`annualreport2011.novonordisk.com. We value feedback and
`welcome questions or comments about this report or our perfor-
`mance at annualreport@novonordisk.com.
`
`2 Our 2011 accomplishments
`and results
`2 Letter from the Chairman
`3 Letter from the CEO
`5 Performancein 2011
`3 Outlook 2012
`4 Performancehighlights
`
`16 Our business
`
`17 The Novo Nordisk Way
`18 Our business.
`18 Gur corporate strategy
`20 Triple Bottom Line management
`22 Risk management
`26 Pipeline overview
`28 Novo Nordisk at a glance
`
`30 Diabetes care
`
`31 The diabetes pandemic
`33 Different pathways to diabetes control
`34 Changing Diabetes®
`
`36 Biopharmaceuticals
`37 Commitment to haemophilia
`38 Changing Pessibilities in Haemophilia®
`39 Other therapy areas
`
`40 Governance, remuneration
`and leadership
`41 Corporate governance
`44 Remuneration report
`48 Board of Directors
`51 Executive Management
`
`52 Shares and capitalstructure
`
`55 Financial, social and
`environmental statements
`56 Consolidated financial, social
`and environmental statements
`100 Summary offinancial data 2007-2011 in EUR
`101 Quarterly financial fiqures 2010 and 2011
`102 Financial statements of the Parent company
`109 Management's statement and Auditor's reports
`
`112. Additional information
`112 Index
`113 Our products
`
`Novo Nordisk Annual Report2011_
`
`1
`
`MPI EXHIBIT 1130 PAGE 3
`
`MPI EXHIBIT 1130 PAGE 3
`
`

`

`F)=
`ams
`ma
`is
`ral
`a[+4
`
`co
`
`3g= n
`
`m
`iS
`
`Letter from the Chairman _
`
`Sten Scheibye
`Crealef the Basar of Oleeciors
`
`Nova Nordisk has been a focused phannaceutical company
`specialising in therapeutic proteins, primarily for diabetes care,
`for nearly $0 years. Our company is characterised by a deep
`disease knowledge within diabetes, a long-term focus anda
`commitment to making Innovative treatments broadly avellable
`— also In areas outside diabetes,
`
`According to new data announced in 2011, diabetes affects around
`366 million people ginbally and is responsible for the deaths of
`nearly4.6 millon adults each year. In comparison, 1.8 milllon people
`died from HIV/AIDS in 2009. Diabetes and other chronic diseases
`are becoming more prevalent all over {he world as urbanisation
`increases and more people live longer.
`
`There has never been more need fora company like Nowe Nordisk
`
`While the short-term outlook for the global economy and for many
`parts of the healthcare Industry i uncertain, the Board of Directors
`is of the firm belief that Nowo Nordisk must continue to investin
`innovations in freatment and in expanding its business footprint in
`all comers-of the world, As the company expands globally, we only
`do business the ‘Novo Nordgk Way".Thmeans we operate In ways
`that balance finandal, socal and environmental responsibility for
`the benefil of patients, employees, healthcare professonab, share
`holders and society at large.
`
`Theresults achieved in 2011 in terms of both sales and new product
`development are remarkably-strong in ght of the difficult economic
`and regulatory climate. Nove Nordisk’s balance sheet and cash
`flow remain strong, and the Board has confidence In the strategic
`direction and growth proseects for the campary. We have
`
`2) Novo Nordisk Annusd leport 2011
`
`therefore consistently Increased the dividend In recent years, raising
`dividends by 33% to 10.00 Danish kroner per share for 2010. The
`proposed dividend for 2071 is 14.00 kroner persham, 340% increase.
`We have also continued our share repurchase programme, repur
`chasing shares worth 72 billion kronerIn the 12-menth perkod
`ending January 2012.
`
`The coming years ‘will be extraordinarily importantfor Novo Morisk's
`leng-term development. On one hand the company has never
`had amore promising pipeline of nes products than it has today,
`Extremely important launches are on the herizen. On the other
`hang, the pharmaceutical industry is unger immense pressure
`globally from measures ta reform healthcare and reduoe spending
`on pharmaceutiaals, particularyfor new and innovative products.
`
`In light of this, the Board has concluded that Lars Rebien Serensen,
`Novo Nordisk's president and chief executive officer, is the right
`person ta steer the company through this emciting - and chal-
`lenging — period. | am therefore pleased that Lars has accepted
`the Board's propasal to extend hes comract by three years, so that
`Knew expires In 2019.
`
`Novo Nordisk has in 2011 continued to increase sales and expand
`its business ata remarkable pace, and the Soard would like to
`express [ts appreciation for the leadership shawn by Lars Reblen
`Sarensen and his Eeeculive Management team and the hard war
`and dedicution of the entire Nova Nordisk organisation.
`
`Stan Schelbye
`Chainman of the Board af Diréctors
`
`MPI EXHIBIT 1130 PAGE 4
`
`MPI EXHIBIT 1130 PAGE 4
`
`

`

`|o
`
`mi|
`22
`a
`
`5=
`
`5a
`
`Letterfrom the CEO
`
`Lars Rebien Sgrensen
`Sreident and chile! executive office
`
`Just as we thought the global ecanomy was recovering from the
`financial cisis in 2008, we were reminded midway through 2011
`that there is stil 2 long way to go.
`
`We saw slow or no 2canemic growth and growing publdebts In
`EUROpean COLMtries and the US, with the focus swinging between
`the instability in the euro zone and the political stalemate in the US
`Congress preventing adoption of long-term financial measures to
`deal with soaring public debt.
`
`
`
`The situation has been |ikened ta the Great Depression in the
`1930s, with hardship felt tocay by millions of people who have
`lest theirjobsor their savings, but the situation today is different
`nevertheless: Itseems more like a ois of confidence — confidence
`in our financial systems, in aur democracies’ ability to agree on
`leng-term solutions, and In ourselves and each other.
`
`What we are witnessing is a giant transfer. of wealth and jobs from
`econamiss in the West to emerging economies in Asia, the Midgle
`East, Latin America and, to some extent, Africa. This k painful far
`those affected negatively, but we must not forget that more jobs
`are being created than lost and that the livelingod of hundreds of
`millions of people és improving, creating the foundation for more
`equal growth In the future, lam confident that many companies
`will emerge from the crsis.as more innovative, having realised
`
`that Innovation f the only sustainable engine for growth. This means
`finding better ways of providing goods and services and solving
`unmet needs ina financially, socially and environmentally respen-
`sible way.
`
`With public spending under pressure, provision of healthcare has
`again been infocus and, consequently, the pharmaceutical indusiry
`has had to make significant adjustments. No market we saree has
`been untouched by this trend. In 2011. Novo Nordisk faced the
`consequences of healthcare refonns in many markets — with our
`business in the US and Europe particularly affected.
`
`Review of 2011
`Given the current dimate,it is rewarding that Novo Nordisk was
`able te grow sales by 1156 in local curences in 2011. This growth
`was driven by our full portfollo.of modern Insullns, NovoRaplo®,
`Levemir* and NovoMix*, but most significantly by the Increasing
`demand for Victoza™, our trestment for type 2 diabetes, which
`became the leader in the GLP-1 category of diabetes treatrnents.
`
`This sales-growth, combined with continued focus on effickency
`Gf our operations, resulted in aperating profit growth of 18%
`reported and 22%. in local cqurendes: This is significantly above
`results for the general pharmaceutical industry.
`
`Equally significartt were thefinalisation of the dinical activites and
`filing fer regulatory approval in Europe, Japan and the LS of anew
`genenrtoanof insulin products. These are based on the ultre-long
`prindple of Degiudec, allowing for a half-Ite twice as kang as the
`basal ingulins mast commonty used today, With these products it
`our hope that we can offer both the world's longest-acting basal
`insulin, Geghidec, and a combination of this basal insulin with the
`world's leading short-acting Insulln. NovoRapld* (Novolog*),
`BegludecPlus, which will offer people with diabetes superior
`
`Novo NondisAnnuslReperti2oi)
`
`3
`
`MPI EXHIBIT 1130 PAGE 5
`
`MPI EXHIBIT 1130 PAGE 5
`
`

`

`Our glucose control, reducing the risk of hypoglycaemia (too lw
`
`EoEI
`
`i *2
`
`]S= = e
`
`I.
`
`blood sugar.and providing greater desing flesibility. Degludec is
`aleo designed to provide people with diabetes the flexibility to
`administer their insulin gt any time of day, at different times from
`day ta day.
`
`Vive also saw innovation across a broad range af our therapeutic
`areas, With progress In the development of a mew dotting facter,
`vatreptacog alfa, intended to improve treatment for haemophilia
`patlerrts with Inhisitors.ve alsa mac progress In the development
`o7 molecules to support the expansion of our presence into
`haemophilia A and B, aswell as ina strong portfolig of inflammation
`developmem projects.
`
`
`
`The year was also a success for the millions of people with diabetes
`and other chronic conditions, | wes encouraged by the outcame
`of the United Nations High-Level Meeting on non-communicable
`diseases in New York in September. Move Nordisk played a part in
`the adoption of a UN dedaration on dlabetes In 2006,and last year
`we again played 2 role as all UN member states pledged to develop
`diabetes strategies and 5et targets Tor improvementin scr@ening,
`Teatment and outcomes, This was.a moment for celebration for
`peoole with diabetes throughout the world. We believe the pledge
`by UN member states can be translated inte concrete actian to
`increase awareness of the threat diabetes poses.
`
`Our new vision Statement and updated guiding principles and
`values, The Novo Nordisk Way, dearly states that “we never
`compromise.an quality. and business: ethics’, With thiswe want to
`Send a clearsignal, intemally as well a5 externally, regarding what
`our stakeholders can expect from each of us at Nove Nordisk. To
`Support this commitment to Integrity anc high standards, In 2071
`we further strengthened cur efforts to ensureadherence to our
`global palicies and procedures.
`
`Not all went according to plan, however, in 2011.
`
`Healthcare reforms in Europe, combined with the anaemic
`expectations of the future pharmaceutical market, farced us te
`fe-allocate resourses from our European organkaton to fast-growing
`manastsin the US and Asia. This led to the unfortunate redundancy
`of approximately 200 positions, We value our people and wedid not
`takethis decision lightly. Securing axstelfidency, hexanaver, is the onl
`guarantee forthe long-term success of our company.
`
`i Asia, 4 major earthquake offthe coast of Japan caused a giant
`teunami which killed thousands and caused severa propertydamage
`a well 2s contributing to a nuclear mettdown dose to ourfactory
`in Kanyama.
`
`We were proud io see ourJapanese colleagues standing frm while
`Confranted with great personal. hardship, ensuring our ahility to
`delhverlife-saving medicines ta the people cf Japan while protecting
`the mesets of cur company.
`
`4& Mowo NordiskAnnual Report 2071
`
`Leaking ahead
`We have significant confidence in aur peopl, our pipeline and
`our products. Linlike most of the pharmaceuticalindustry, Nove
`Nordisk will undertake a year af major investments in 2012. This
`Includes Investment In further market expansion of our current
`portiolio, in preparing for the lsunch of cur new-generation
`insulins and in research and development activities far the medium
`to long term.
`
`Our focus In 2012 will be on:
`
`The regulatory process for approval of Deghidec and DeqludecPius
`in our malin markets and preparations for the launch of these
`new-gererstion insulins.
`
`» Execution and monitoring of the phase 3 dinical programme for
`liraglutice in obesity.
`
`» Clinical development of fixed combinations of Degludes and
`Victoza®, which may offer a new option for intensification of
`the treatment of type 2 diabetes.
`
`Clinical development of vatreptaacg alfa, for Improved treatment
`of haemophilia with inhibitors.
`
`Expansion of our International organisation, particularly In fast-
`grewing regions in the areas of sales and marketing, production
`and research and developrnerrt.
`
`Co-organksing the European Diabetes Leadership Farum under
`the auspices of the Danish EU presidency to reach consensus
`about what it will take to address the current challenges and
`change diabetes.
`
`With significant investment and continued focus on development,
`We epect continued growth for Nove Nordisk In 2012 and beyond.
`
`I would like te thank the entire Novo Nordisk organisation for their
`contributions to our success this year, our stakeholdersand pariners
`far their collaboration, and our sharehalders for their confidence
`and continued support.
`
`Lars Rebien Sarensen
`President and chief executrve officer
`
`MPI EXHIBIT 1130 PAGE 6
`
`MPI EXHIBIT 1130 PAGE 6
`
`

`

`ie
`
`vi
`ae=vw
`bs3=i
`ee$37
`
`a==C
`
`a]
`at
`
`= gau
`
`otn
`=™
`
`J=
`
`Performance
`in 2011
`
`Despite continued global economic turmoil, 2011 was a positive year
`for Novo Nordisk with strong sales growth, good performance
`against long-term financial, social and environmental targets
`and very significant progress in the clinical developmentpipeline.
`
`Sales increased by 9% in Danish kroner and by 11% measured in
`local currencies during 2011 compared to 2010. Sales growth was
`realised in both diabetes care and biopharmaceuticals. Victoza®
`and moderninsulins were the main contributors to growth, with
`Victoza® sales increasing by 159% (166% in local currencies) and
`sales of moderninsulins increasing 8% (11% in local currencies).
`Sales growth wasrealised in all regions. Sales in North America
`increased by 13% andin International Operations by 12%, both
`in Danish kroner, and by 18% and 17% respectively in local
`currencies. Sales growth in 2011 was reduced by approximately
`2 percentage points due to healthcare reforms in the US,several
`European markets, Turkey and China.
`
`
`
`Novo Nordisk achieved a significant milestone in 2011, as applications
`for marketing authorisation of two new-generation insulins,
`Degludec' and DeqludecPlus?, were filed in major markets, We
`madesignificant progress in the development ofsolutions for the
`range of haemophilia and other rare bleeding disorders, including
`initiation of a phase 3 trial prograrmmefor a fast-acting treatment
`of haemophilia with inhibitors. A phase 1 trial was also initiated for
`a long-acting growth hormone formulation.
`
`In addition, we exceeded long-term targets for resource optima-
`tisation, both in terms of reduced energy and water consumption
`for production and CO, emissions from energy consumption for
`production. Wealso continued to exceed our long-term target for
`employee engagement. Notable progress was made in reaching
`targets for insulin sales in least developed countries and increasing
`diversity in our senior management teams.
`
`Diabetes care sales development
`Sales of diabetes care products increased by 13% measuredin
`local currencies and by 10% in Danish kroner to DKK 50,425
`million in 2011 compared to 2010. Novo Nordisk is the world
`leader in diabetes care and now holds a global value market share
`of 24% compared to 23% at the samepoint in time last year.
`
`Moderninsulins, human insulins
`and protein-related products
`In 2011, sales of modern insulins, human insulins and protein-
`related products increased by 5% measured in local currencies
`and by 3% in Danish kroner to DKK 41,859 million compared to
`2010, driven by North America, International Operations and
`Region China. Global insulin sales growth was negatively impacted
`by healthcare reforms in the US, Europe, Turkey and China as well
`as by a decline in humaninsulin sales in Europe, the US and Japan.
`
`50:
`
`Growthin
`operating profit
`= Target
`= Realised
`= Realised excl pulmonary
`
`diabetes projacts 0.
`
`i
`
`2007
`
`2008
`
`i
`
`2009
`
`i
`
`2010
`
`i
`
`2011
`
`i
`
`ae
`
`Operating margin
`= Target
`= Realised
`= Realised excl pulmonary
`
`diabetes projects
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`%
`
`Operating profit
`after tax to net
`operating assets
`(Previously: Return
`on invested capital)
`= Target
`= Realised
`
`100;
`80!
`60+
`|
`40:
`/
`20,
`
`
`
`Financial performance
`2011 performance against
`long-term financial targets
`Cash toearnings=199
`
`By focusing on growth,profitability, operating assets and generation
`Three-year average
`120:
`= Realised
`of cash, our four long-term financial targets guide Novo Nordisk’s
`= Target
`op
`financial development. Our historic long-term financial targets are
`60-
`operating profit growth, operating margin, operating profit after tax
`to net operating assets and cash conversion. The realised perfor-
`30-
`manceforthree of the four ratios exceeded the targetlevel while
`the operating margin performance was progressing towards the
`target. See p 6 for an update on the long-term financial targets.
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`%
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`1. intemal designation for insulin degludec.
`2. Internal designation for insulin degludec/insulin aspart.
`
`Novo Nordisk Annual Report 2011
`
`5
`
`MPI EXHIBIT 1130 PAGE 7
`
`MPI EXHIBIT 1130 PAGE 7
`
`

`

`F#ou(y©
`
`fs Sales of moderninsulins increased by 11% in local currencies and
`
`fa
`
`rs=
`ow
`E=
`Pay
`rt
`iSfe]
`fei]
`
`=|—
`=|
`
`by 8% in Danish kroner to DKK 28,765 million compared to 2010,
`reflecting steady sales growth. North America, International
`Operations and Europe were the main contributors to the growth.
`Sales of modeminsulins constitute more than 72% of Novo Nordisk’s
`sales of insulin.
`
`North America
`Sales of modern insulins, human insulins and protein-related
`products in North America increased by 9% in local currencies
`and by 4% measured in Danish kroner in 2011. This reflects
`continued solid sales performance especially of NovoRapid® and
`Levemir® offset by a decline in human insulin sales and a negative
`impact of approximately 5 percentage points fram the US health-
`care reform enacted in March 2010. Currently, around 46% of
`Nove Nordisk’s modem insulin volume in the US is being sold in
`the prefilled device FlexPen® compared to around 43% in the
`sameperiod last year.
`
`Europe
`Sales in Europe decreased by 1% in local currencies and by 1%
`measured in Danish kroner in 2011, This reflects continued sales
`growth for modern insulins offset by a decline in humaninsulin
`sales. The growthofthe insulin volumein Europe is currently low,
`below 3%, and Novo Nordisk’s full year insulin sales are negatively
`impacted by market share losses, especially in the UK, and by
`healthcare reforms implemented during 2010 and 2011 ina number
`of European markets. Currently, around 96% of Novo Nordisk’s
`insulin volume in Europeis being sold for use in devices.
`
`International Operations
`Sales in International Operations increased by 10% in local currencies
`and by 6% in Danish kronerin 2011. The growthis primarily driven
`by modern insulins with all three insulin analogues growing solidly,
`complemented by modest sales growth of humaninsulin.
`
`Currently, around 58% of Novo Nordisk’s insulin volume in
`International Operations’ non-tender marketsis being sold for
`use in devices.
`
`Region China
`Sales in Region China increased by 10% in local currencies and by
`10% in Danish kroner in 2011. The main contributor to growth was
`sales of modern insulin with the entire portfolio growing strongly,
`while sales of humaninsulin in 2011 were at the samelevel as sales
`in 2010, primarily as a result of implementation of a healthcare
`reform in China during 2011. Currently, around 96% of Novo
`Nordisk’s insulin volume in China is being sold for use in devices.
`
`Japan & Korea
`Sales in Japan & Korea decreased by 4% in local currencies and
`increased by 1% in Danish kroner in 2011. The sales development
`reflects sales growth for modern insulins being offset by a decline
`in humaninsulin sales. Furthermore, continucus low market growth,
`below 3%,isimpacting overall growth. The device penetration in
`Japan remains high with approximately 98% of Novo Nordisk’s
`insulin volume being used in devices, primarily FlexPen®.
`
`Victoza® (GLP-1 therapy for type 2 diabetes)
`Victoza® sales reached DKK 5,991 million during 2011, reflecting
`solid sales performancein all regions. The globalroll-out is
`continuing with nearly 50 countries having launched. Victoza®
`achieved global market share leadership with 58% value market
`share in the GLP-1 segment in November 2011 compared to 30%
`in November 2010. Furthermore, the GLP-1 class’s value share of
`the total diabetes care market increased to 4.5% in November
`2011 compared to 3.2% in November 2010.
`
`Long-term financial
`target update
`Novo Nordisk operates with four long-term financial targets to
`balance short and long-term considerations, thereby ensuring
`a focus on shareholder value creation. The target ‘Return on
`Invested Capital’ (ROIC) has been changed to ‘Operating profit
`after tax to net operating assets’ to more accurately describe
`the financial elements included in the ratio. Further, the target
`level has been increased to 90% from 70%. The previous
`target level assumed that proposed accounting rules regarding
`treatment of operating leases, the draft International Financial
`
`Reporting Standard ‘Leases’ (ED/2010/09), would be
`implementedin the near future. However, the implementation
`has now been postponed and the actual contentis currently
`unclear and as such,this assumption no longer applies.
`
`The targetlevels are based on the assumption of a continuation
`of the current business environment and the current scope of
`businessactivities and have been prepared assuming that
`currency exchangerates remain at the levels outlined in Outlook
`2012 on p 13. Should any of these assumptions change, the time
`horizon for achieving the long-term targets may beextended or
`it may be necessary to revise the targets.
`
`
`Performance against long-term financial targets
`
`
`
` Previous targets Updated targets
`
`
`
`Operating profit growth
`
`Operating margin
`
`Operating profit after tax to net operating assets (previously ROIC)
`
`Cash to earnings
`
`Cash to earnings (three-years average)
`
`15%
`
`35%
`
`70%
`
`15%
`
`35%
`
`90%
`
`
`50%
`90%
`
`6 Novo Nordisk Annual Report 2011
`
`MPI EXHIBIT 1130 PAGE 8
`
`MPI EXHIBIT 1130 PAGE 8
`
`

`

`
`
`a=gb
`
`a]ofeSS
`c=)™N
`S=
`o
`
`al
`ad=vw
`ia=]=iy
`
`‘=Fi
`=7
`al
`
`North America
`
`Sales of Victoza® in North America increased by 167% in local
`currencies and by 155% measured in Danish kroner in 2011
`compared to 2010. This reflects continuous GLP-1 market expansion
`driven by Victoza®, and the value market leadership position Victoza®
`achieved during 2011.
`
`
`
`Japan & Korea
`Sales in Japan & Korea increased, from a relatively low base in 2010,
`by 348% in local currencies and by 370% measured in Danish
`kronerin 2011. The sales performance in 2011 is encouraging and
`reflects the expiry of the 14 days prescription limitation mid-2011
`and a significant commercial focus on Victoza® throughout the year.
`
`NovoNorm®/Prandin®/PrandiMet®
`(oral antidiabetic products)
`In 2011, sales of oral antidiabetic products declined by 3% measured
`in local currencies and by 6% in Danish kroner to DKK 2,575 million
`compared to 2010. The sales development primarily reflects lower
`sales in Europe due to generic competition in several European
`markets.
`
`Europe
`Sales in Europe increased by 114% in local currencies and by 115%
`measured in Danish kronerin 2011. This reflects continued roll-out
`across Europe andin particular solid sales growth in France, the
`UK andItaly.
`
`International Operations
`Sales in International Operations increased by 781% in local
`currencies and by 776% measured in Danish kroner in 2011. This
`reflects a low comparison base from 2010 but also very solid sales
`performance especially in Brazil and the countries of the Middle East.
`
`Region China
`Victoza® was launched in China during the fourth quarter of 2011 and
`althoughinitial market feedbackis positive, actual sales are limited.
`
`Biopharmaceuticals
`sales development
`In 2011, sales of biopharmaceutical products increased by 8%
`measuredin local currencies and by 6% measured in Danish kroner
`to DKK 15,921 million compared to 2010 primarily driven by North
`America and International Operations.
`
`NovoSeven® (bleeding disorders therapy)
`Sales of NovoSeven®increased by 7% in local currencies and by 4%
`in Danish kroner to DKK 8,347 million compared to 2010.All regions
`contributed to the sales growth of NovoSeven®,International
`Operations was the primary contributor to growth followed by
`Europe and North America.
`
`%
`
`
`
`
`
`
`
`
`DKKbillion
`
`Insulin volume
`100;
`Sales by 201TNNINNNTTTcc.
`market share
`—e
`:
`geographic region
`
`2010 (TT soe
`Geographic region
`z
`:
`i
`® North America
`
`= North America
`2009 (Gs:
`siwiee
`
`== Europe
`2008 |—Cc- 456
`SS International Operations
`— :
`| Japan & Korea
`= International Operations
`2007| +1.
`i RegionChina
`~ Japan & Korea
`0 1 20 30 40 50 60 70
`
`
`— Region China be2007 2008 2009 2010 2011
`
`
`
`
`
`
`DKKbillion
`
`2011 [SINT <2
`Salesby therapy area
`
`2010A<<
`mdiabets car
`7
`;
`i Haemostasis management
`
`2009 Es.
`(Noose
`
`1 Growth hormonetherapy Ly
`© Hormonereplacement
`2U0e
`eee
`
`20eTge——»_e.a=e
`© Otherproducts
`0
`10 20
`30 40
`50 60 70
`2007 "2008
`2009 “2010 2011
`
`DKKbillion
`
`2011i <<
`Research and
`developmentcosts
`
`20IE§ Diabetes care
`(exd pulmonary
`diabetes projects)
`B Biopharmaceuticals
`
`Sales growth
`Local and reported rates
`= In DKK as reported
`= In local currencies
`
`%
`
`25:
`
`
`
`Modern insulins
`Global value market share
`of modern insulin segment
`= NovoRapid®
`= NovoMix®
`= Levemir®
`
`%
`
`100
`gy
`
`fa
`40
`
`0:
`
`2007
`
`2008
`
`2009
`
`¥
`
`2010
`
`2011
`
`Novo Nordisk Annual Report 2011
`
`7
`
`MPI EXHIBIT 1130 PAGE 9
`
`MPI EXHIBIT 1130 PAGE 9
`
`

`

`Research and development costs of DKK 9,628 million remained
`at an absolute level similar to 2010, Whereas thecostlevel in 2010
`reflects execution of the phase 3a programmesfor both Degludec
`and DegludecPlus, the cost level in 2011 reflects the initiation of
`pivotal trial activities within diabetes care, obesity and haemophilia.
`
`
`
`Licence fees and other operating income constituted DKK 494
`million in 2011 compared to DKK 657 million in 2010. This decline
`is primarily due to a non-recurring income from a patent settlement
`during thefirst quarter of 2010.
`
`Operatingprofit in 2011 increased by 18% to DKK 22,374 million
`compared to 2010.In local currencies the growth was 22%.
`
`Netfinancials and tax
`Net financials showed a net expense of DKK 449 million in 2011
`compared to a net expense of DKK 605 million in 2010. As of 31
`December 2011, foreign exchange hedging losses of around DKK
`1,200 million have been deferred for recognition in the income
`statement in 2012.
`
`For 2011, the foreign exchange result was an expense of DKK 322
`million compared to an expense of DKK 1,341 million in 2010. The
`foreign exchangeloss in 2011 reflects losses on foreign exchange
`hedging contracts primarily related to the Japanese yen due to the
`appreciation versus the Danish krone in 2011 compared to the
`exchangerate level prevailing in 2010 andin the last quarter of 2009.
`
`Also included in net financials is the result from associated
`companies with an expense of DKK 4 million. In 2010, the result
`from associated companies was an income of DKK 1,070 million
`as Novo Nordisk recorded a non-recurring income of approximately
`DKK1.1 billion from the sale of shares in ZymoGenetics,Inc.
`
`The effective tax rate for 2011 was 22%.
`
`Capital expenditure
`and free cash flow
`Net capital expenditure for property, plant and equipment for 2011
`was DKK3.0 billion compared to DKK 3.3 billion in 2016. The main
`investment projects in 2011 were the insulinfilling plant in Tianjin,
`China,filling capacity for biopharmaceuticals and new device manu-
`facturing capacity in Denmark and the US.
`
`Free cash flow for 2011 was DKK 18.1 billion compared to DKK
`17.0 billion in 2010.
`
`Equity
`Total equity was DKK 37,448 million at the end of 2011, equivalent
`to 57.9% oftotal assets, compared to 60.2% at the end of 2010.
`Please refer to p 59 for further elaboration of changes in equity
`during 2011.
`
`Norditropin® (growth hormonetherapy)
`Sales of Norditropin® increased by 5% measured in local currencies
`and by 5% measured in Danish kroner to DKK 5,047 million
`compared to 2010. The sales growth wasdriven by International
`Operations, North America and Japan & Korea, partly offset by a
`decline in Europe. Novo Nordisk is the second-largest company in
`the global growth hormone market with a 24% share measured
`in volume.
`
`Other products
`Sales of other products within biopharmaceuticals, which primarily
`consist of hormone replacement therapy (HRT)-related products,
`increased by 15% measured in local currencies and by 13% in Danish
`kroner to DKK 2,527 million compared to 2010. This development
`primarily reflects continued sales progress for the law dose Vagifem®
`that was launched in North America and Europe in 2010. Sales
`growth was furthermore supported by GlucaGen®sales in the US
`and Japan, and partly off-set by a decline in Activelle® sales following
`patent expiry in Europe,
`
`Developmentin costs
`and operatingprofit
`The cost of goods sold grew by 8% to DKK 12,589 million in 2011.
`Reported gross margin increased by 0.2 percentage point to 81.0%
`com