July 18, 2010 - Novo Nordisk (NVO-NYSE), a healthcare company, engages in the discovery, development, manufacture, and marketing of pharmaceutical products. It operates in two segments, Diabetes Care and Biopharmaceuticals.

The Biopharmaceuticals segment provides products in the areas of haemophilia, growth hormone therapy, hormone replacement therapy, and inflammation therapy.

The company markets and distributes through subsidiaries, distributors, and independent agents in the United States, Japan, China, Russia, India, Brazil, and Turkey. Novo Nordisk A/S was founded in 1925 and is headquartered in Bagsvaerd, Denmark.

Earnings are strong with no hint of slowing. In fact, the last time the company showed earnings below the previous year was in 1999 when it reported 49 cents vs 51 cents. Since then, every year has been better. Last year, eps was $3.32. This year, 2 analysts have a consensus estimate or $3.83, then $4.54 a share for next year. Quarterly earnings are expected on August 5. Earnings growth over the last 5 years, on average, was 22.5% a year annually. Going forward, analysts see 20.10%.

Revenues followed the same path, growing annually. Last year, they finished at $9.53 billion. This year, the estimate is for $9.875 billion, then 10.625 billion in 2011. Over the last 5 years, revenues grew, on average, 19.5% annually. Estimates are for 10.5% annual increases over the next 5.

Growth is coming from Novo's modern insulins, ones that have faster absorption or slow release. They're taking over from human insulins as the standard. Novo's analogue sales grew by 17% in the first quarter to $1.06 billion and were almost 70% of the quarter's sales increase. They represent 68% of Novo's total insulin revenues.

The Biopharmaceutical division also showed improvement. Sales of NovoSeven, a hemostatic agent, rose 6% to $346 million in the first quarter. It treats spontaneous bleeding episodes. The company is working on expanding the market with recombinant engineered short and long acting compounds for on-demand and prophylactic therapy.

In the insulin department, the company introduced in February a once daily analogue for Type 2 diabetes in the U.S. called Victoza. Now it's in Japan and 15 other countries. In China, Novo launched Levemir, a long lasting analogue. In the pipeline is next generation insulins, Degludec and DegludecPlus. They are in Phase III trials with 10,000 patients enrolled, the largest clinical program ever done for insulin therapy.

This is one of those stocks that has weathered all the storms over the last decade, going from a low of $10.80 in 2002 (split adjusted for a 2 for 1 split in 2007) to a high of $73.70 in 2008. It did falter after the split, finding a bottom in March of 2009 at $41.30, only to rally to a recent all-time high of $89.23. Investors love the story, love the stock. They've taken it to levels that fully value all the current information about it. This is a stock that most investors would love to own....at a lower price.

- Company Web site: www.novonordisk.com

Ted Allrich