Please go ahead, sir. Lars Sørensen: Thank you very much and welcome to this Novo Nordisk conference call regarding our performance of the first 3 months of 2012 and an updated outlook for 2012. I'm Lars Rebien Sørensen, the CEO of Novo Nordisk. With me I have our Chief Financial Officer, Jesper Brandgaard; Mads Krogsgaard Thomsen, our Chief Science Officer; and our Investor Relations officers. Today's earnings release and the slides for this call are available on our webpage, novonordisk.com. The conference call is scheduled to last approximately 1 hour. As usual, we'll start with an outline of the presentations on Slide 2. The Q&A session will begin in about 25 minutes. Turn to Slide 3. As always, I need to advise you that this call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause the actual results to differ materially from expectations. For further information on the risk factors, please see the earnings release and the slides prepared for this presentation. Please note that the conference call is being webcast live and a replay will be made available on Novo Nordisk's website after the call. Turn to Slide #4. We are satisfied with the performance in the first 3 months of 2012. Sales increased 10% in local currencies. The key drivers have been modern insulins and Victoza. The solid sales performance is realized in a challenging economic environment, with healthcare reform impacting sales growth negatively with 1.5 percentage points in these first 3 months. Today we're happy to announce the intended global brand names for our new long-acting insulin Degludec and DegludecPlus, which are currently under regulatory review by the regulatory authorities in major markets such as U.S., Europe and Japan. Degludec is intended to be marketed as Tresiba and DegludecPlus is intended to be marketed as Ryzodeg. The regulatory reviews of Tresiba and Ryzodeg continue to progress in the major markets. Novo Nordisk has completed an initial Phase I trial for a range of novel insulin aspart formulations with faster onset of action. The data on the trials are encouraging and additional confirmatory Phase 1 trials will proceed during 2012. Mads will elaborate on this during his R&D update. Further, Novo Nordisk is now initiating a Phase IIIa program for N8-GP, a long-acting recombinant factor VIII for the treatment of hemophilia A. Turning to financials. Reported operating profit grew 18% and diluted earnings per share also 18%. For 2012 we now expect sales growth of 8% to 11% in local currencies and operating profit growth of at least 10% in local currencies. Turn to Slide #5. The modern insulins continue to exhibit double-digit growth rates and Victoza continues the steady growth performance. In the first 3 months of 2012, the diabetes care franchise grew 15% while the biopharmaceutical franchise declined 4%, both measured in local currencies. Diabetes care now represents 78% of overall sales. Modern insulins were the prime growth drivers, accounting for 61% of growth, followed by Victoza, accounting for 53% of growth. Sales of NovoSeven declined 8% in local currencies. The 2 primary regions for NovoSeven, Europe and North America. The sales development primarily reflects a low level of surgeries involving NovoSeven treatment, strengthened budgetary controls to the hospitals and a low level of acquired hemophilia cases and also an increasing number of inhibitor patients participating in clinical trials. Sales of Norditropin increased 4%, measured in local currencies. The sales growth was driven by international operations in North America, partly offset by a decline in Japan and Korea. Turn to the next slide. For 2011, the insulin sales growth rates were impacted by healthcare reforms across most major markets, including U.S., Europe and China, as well as competitive pressures in North America, Europe and Japan. Due to annualization of U.S. Healthcare Reform and the strengthening competitive situation in the U.S. in the first 3 months of 2012, we are encouraged to see that our insulin sales growth rates have rebounded as illustrated on this slide. With a stable underlying volume growth in the diabetes market created by increasing diabetes population, continued conversion to modern insulins and devices, and introductions of new insulins, we believe that our insulin sales growth rate in the long term will be able to be maintained at double-digit levels. Turn to the next slide. The positive market dynamics in the U.S. are illustrated on this slide, where we are seeing an encouraging development in the prescriptions across the entire portfolio of Novo Nordisk modern insulins. We illustrate here the development we saw in 2011 and during the first quarter of 2012 for our 3 modern insulins, NovoLog, NovoLog Mix and Levemir. The developments are primarily driven by strong promotional activity and recent contract dynamics. Turn to the next slide. In the first 3 months of 2012, North America accounted for 64% of growth, followed by international operations accounting for 34% of growth, both measured in local currencies. Sales growth in North America was 17% in local currencies, reflecting a continued solid market penetration of the modern insulins and the continued steady performance of Victoza. Sales growth of the first 3 months in Europe is flat, measured in local currencies and in reported currencies. Sales development reflects a solid performance of Victoza, progress for the portfolio of modern insulins, and the sales growth is also negatively impacted by declining sales of human insulin and NovoSeven, and generic competition for NovoNorm and healthcare reforms. Sales for the International Operations grew 24% in local currencies, driven by a continued penetration of modern insulins, solid human insulin sales and continued solid Victoza performance. Sales in China increased 9% in local currencies. The main contributor to growth were sales of modern insulins, especially NovoMix. The growth is driven by modern insulins portfolio, partly offset by loss in market share and modern insulins' losses of EDL biddings in 3 provinces and slowing of the retail growth rates in China. Sales in Japan and Korea declined 7% in local currencies in the first 3 months of 2012. The sales development reflects wholesaler destocking prior to the mandatory price reductions taking effect the 1st of April 2012. Further, the first 3 months of last year, 2011, were positively impacted by supply chain stocking following the earthquake in March '11. Turn to Slide #9 for an update on the market situation. The global diabetes care market continues to grow by more than 8% in value, with injectables growing close to 14% annually. As you can see on the right hand side of the slide, Novo Nordisk continues to expand our leadership position within diabetes care and now holds 25% value share of the global diabetes care market. Turn to the next slide for an update on Victoza. Sales of Victoza reached DKK 2 billion in the first 3 months of 2012. The performance reflects steady penetration across key markets, including United States, U.K., Germany, France, Japan and certain countries in International Operations. The development in Victoza's quarterly sales when comparing Q1 2012 with previous quarter Q4 2011 primarily stems from 2 elements: rebate reversals in the U.S. and Europe in the fourth quarter, which amounted to approximately DKK 200 million; and normal seasonality where we typically see Q1 diabetes sales being slightly lower than previous quarters. When adjusting for these effects, Victoza continues to exhibit a steady growth rate, reflecting the steady performance across key markets and the continued expansion of the GLP-1 class. Turn to the next slide for more specifics. In the U.S., Victoza sales continues to be encouraging. We hold a market share of close to 56% of the total GLP-1 prescriptions in the U.S. and we are currently capturing 53% of new GLP-1 patients. Since the launch of Victoza in February 2010, the GLP-1 class, measured by prescriptions, has grown by around 70% and now constitutes 5.6% of the U.S. diabetes care market measured in value. Turn to the next slide. In Europe, we continue to see strong uptake for Victoza. Several key markets, the GLP-1 class has more than doubled since the launch of Victoza. Victoza is the leading GLP-1 product in many key markets, including Germany, U.K., France and Italy. With this, I would like to hand over to Mads.

Thanks you, Lars. Please turn to the next slide. Let me start with an update on Tresiba and Ryzodeg that have been submitted for regulatory review within the last 6 months in a large number of territories, as listed on this slide. In parallel with the ongoing dialogue with the many regulatory agencies, which is continuing in line with expectations, we continue to submit new drug applications for both products in a number of markets during 2012. We will also continue to provide quarterly updates on the regulatory process towards broad [ph] market approval of Tresiba and Ryzodeg, a process which currently does not include a U.S. ad company but does involve a multitude of agency inspections all over the world. While we are on Tresiba, it is now the second time that the Lancet publishes trials from a clinical program. More about that in a minute. Next, we have now with encouraging results finalized the first Phase I investigations on NN1218, a novel fast-acting insulin formulation of insulin aspart. Further confirmatory Phase I testing will be conducted during this year, with the potential for selection of a candidate for Phase III in 2013. A Phase I trial investigating Victoza as adjunct therapy to insulin in type 1 diabetes has now also been initiated, based on animal and human data suggesting that GLP-1 suppresses glucagon secretion while enhancing residual beta cell secretions in type 1 diabetes. Apart from the insulin-sparing effect, the potential for more time spent in the so-called target zone is one of the endpoints relevant to studying type 1 diabetes. The Victoza labels in the U.S. and EU have been updated to include data from the sitagliptin comparative trial published last year in the Lancet and showing superior blood glucose control for Victoza. The U.S. label update also includes approval of combination therapy with basal insulin for the treatment of adults with type 2 diabetes. Thus in the U.S., basal insulin can now be added to Victoza therapy or vice versa. Finally, the CV outcome trial comparing Victoza to standard of care in 9,000 patients with type 2 diabetes has completed recruitment slightly ahead of schedule, and we are looking forward to outcome of this event-driven trial that is expected to report in 2016 as part of the postmarketing requirements agreed upon with FDA and EMA. Moving on to biopharmaceuticals, the hemophilia B compound N9-GP has completed pivotal trial recruitment. And further to this, we have initiated the Phase IIIa program for our long-acting glyco-PEGylated recombinant factor VIII compound, N8-GP. The first Phase IIIa study will involve 132 hemophilia A patients in a two-armed non-randomized interventional study investigating N8-GP, both in prophylaxis and in on-demand treatment. Later this year, we will initiate the second Phase IIIa trial, which will be smaller study investigating N8-GP during surgical procedures. Lastly, in the inflammation area, Novo Nordisk has completed a Phase IIA trial of anti-NKG2d in rheumatoid arthritis. The trial showed that the compound was safe, but it did not demonstrate any effect on the primary endpoint, DAS28-CRP, which is a measure of disease activity. As a consequence of this, Novo Nordisk will not pursue further development of the compound within rheumatoid arthritis. Please turn to next slide. As mentioned, I am happy and proud to share with you today that 2 of the Phase IIIa studies of Tresiba has just been published in the Lancet, where the papers will feature back to back together with an editorial in Lancet’s today's printed edition. This marks the first full length publication of primary data from the Phase IIIa program. The 2 trials included a total of 1,635 participants and investigated basal-bolus treatment for one year with insulin Degludec compared to insulin glargine as the basal component in either type 1 or type 2 diabetes, using insulin aspart as prandial insulin in all groups. These were [indiscernible] target studies, implying that insulin doses were titrated systematically to allow patients to achieve the same level of glucose control in both arms. This approach is requested by the FDA and allows for detailed assessment of risks and benefits, including hypoglycemia, on the same HbA1c background. Despite the important contributions of mealtime insulin towards overall hypoglycemia, both this and nocturnal hypoglycemia were significantly reduced in the Tresiba group in type 2 diabetes, and in type 1 diabetes nocturnal hypoglycemia was reduced significantly. The editorial accompanying the papers highlighted that the biggest barrier for diabetics to achieve the desired glucose target was hypoglycemia and the fear thereof. The editorial further describes how the ultra-long flat action profile of Tresiba regularizes the absorption of insulin monomers on all days, leading to a higher likelihood of a consistently good match between glucose and insulin levels and potentially higher treatment adherence. Finally, Tresiba is described as an evolution in the insulin management of diabetes, similar, I would argue, to the therapeutic evolution represented by the current basal insulin analogs, when they improved upon existing NPH insulin therapy a decade ago. Later this year, the remaining Phase IIIa Tresiba trials will be presented at major diabetes conferences globally, all confirming the improved hypoglycemia profile, dosing flexibility and other benefits of Tresiba. Please turn to the next slide. The ADA and EASD joint type 2 diabetes treatment guidelines have been updated and published online last week. The general HbA1c target remain 7%, but the guidelines call for individualized targets with younger motivated patients in the lowest end and elderly patient with complications and short life expectancy in the higher end of the HbA1c target range. A decisive factor in this regard relates to the risks associated with therapy-related hypoglycemia, to which recent drugs with no or low hypoglycemia risk should be strongly considered for use. With metformin maintained as the first-line agent, there are a number of proposed second-line drugs to be added to metformin upon HbA1c target failure, including GLP-1 and basal insulin. Specifically for patients with very high glucose levels, dual therapy with metformin and basal insulin should be strongly considered, and likewise for GLP-1 as second-line therapy in patients where weight loss is a big need. Over time as the disease progresses, basal insulin therapy will typically be needed according to the guidelines, with intensifications either through supplementation with prandial insulin or via a shift to twice-daily biphasic insulin therapy. Since type 2 diabetes treatment is multifaceted and should target the relevant elements of the metabolic syndrome in a patient, polypharmacy will often be needed, and in order to reduce treatment complacency, it is the Novo Nordisk strategy to reduce the need for multiple daily drug administrations by working, a, with therapeutic classes offering high efficacy as standalone agents; and b, the use of these in fixed combinations such as Ryzodeg and IdegLira. Please turn to the next slide. Public Citizen, a U.S. NGO, petitioned the FDA to withdraw Victoza from the U.S. market on April 19 due to their concerns related to the safety profile of Victoza, which were primarily based on the pre-approval data included in the ADA review, as well as observations from the FDA adverse-event reporting system known as the AERS database. All the pre-approval findings that were highlighted in the petition were obviously known to the FDA when approving Victoza in 2010. Importantly, and since then, 2 pre-clinical studies have been completed as part of the FDA postmarketing requirements. First, a rigorously conducted diabetic rat study revealed no micro or macroscopic signs of pancreatitis and, further to this, a mouse knockout study revealed no C-cell cancer observations, adding further support to our original hypothesis that development of C-cell cancer in rodents involves a mechanism to which they, but not humans and monkeys, are sensitive. Moving now from animals to the large pool of completed human studies, there has been no indication of causative role between Victoza therapy and pancreatitis or C-cell proliferation. Specifically, the ongoing LEADER cardiovascular outcome trial described above also assesses these and other parameters as trial endpoints, and as of today we've heard nothing untoward from the Data Monitoring Committee in regards to significant adverse findings in the LEADER trial. Today, almost 1 million years of human type 2 diabetes exposure to Victoza is included in our pharmacovigilance system, where adverse events are reported by treating physicians and monitored as part of our rigorous safety surveillance program. All relevant data are routinely shared with the FDA, EMA and other regulators, and to date there have been no deviations from the expected background incidence rates as regards EG [ph], pancreatitis and cancer. Indeed as described in the preceding sections, the FDA and EMA have just updated the label for Victoza and as part of that process, the benefit/risk, need for warnings, et cetera, have been assessed by the agencies for the indication areas included in the recently updated product label. Finally, the AERS database operated by the FDA is a signal detection system that, as described by the agency, is not suitable for event rate calculations. However, even with an EG [ph], a ten-fold underreporting of pancreatitis, Victoza is still within the 1 to 4 cases of pancreatitis per 1,000 patient-years that would be expected in a type 2 diabetes population based on published incidence rates. So in conclusion, no post-approval safety data have emerged that would suggest any change in the favorable benefit/risk profile for the indicated use of Victoza in type 2 diabetes. With that, over to Jesper for an update on the financials.

Thank you, Mads. Please turn to the next slide. In the first 3 months of 2012, sales increased by 13%, measured in Danish kroner, to DKK 17.6 billion and by 10% in local currencies, compared to the first 3 months of 2011. The underlying production [ph] economy improved by 70 basis points in the first 3 months of 2012. The improvement is mainly due to positive price impacts from North America, Victoza and the conversion to human -- to modern insulins from human insulins. Due to a neutral currency impact, the reported gross margin also improved by 70 basis points to 80.8% in the first 3 months of 2012. Total non-production-related cost increased by 9% in local currency and by 11% in the Danish kroner to DKK 3.4 billion. Sales and distribution cost increased by 14%, primarily reflecting increased sales promotion activities in the U.S. and the sales force expansion in China mid-2011. R&D cost increased by 9% to DKK 2.5 billion, mainly driven by Phase III trials for IdegLira, the fixed combination of Tresiba and Victoza, ongoing Phase IIIb trials for Tresiba and Ryzodeg, as well as the 2 ongoing Phase III trials for Liraglutide in obesity. On the biopharm side, R&D costs are impacted by the Phase III trial for Vatreptacog alfa and N9-GP. Operating profit increased by 18% in the first 3 months to DKK 6.4 billion. In local currency the growth was 13%. Net financials shows a net expense of DKK 328 million in the first 3 months of ‘12 compared to a net expense DKK 128 million in 2011. For the first 3 months of 2012, the foreign exchange result was an expense of DKK 309 million compared to an expense of DKK 104 million in the first 3 months of 2011. This reflects losses on foreign exchange hedging contracts, primarily related to the U.S. dollar due to the appreciation versus the Danish kroner in 2012, compared to the exchange rate level prevailing towards the end of 2010 and in the early part of 2011. The effective tax rate for the first 3 months was 23%. Please turn to the next slide. The 2 graphs illustrate the development of the U.S. dollar and Japanese yen versus the Danish kroner. The tables on the right show the expected annual impact on operating profit of a 5% movement in each of our key invoicing currencies and the current extent of hedging for the same currencies. During the first 3 months of 2012, the average exchange rate for the U.S. dollar versus the Danish kroner was approximately 4% above that experienced in the first 3 months of 2011. At present, the value of the U.S. dollar is approximately 5% above the average level for 2011. Please turn to the next slide. Novo Nordisk now expects sales growth in 2012 of 8% to 11% measured in local currencies. This is based on expectations of continued market penetration from Novo Nordisk products, as well as expectations of continued intense competition; generic competition for all anti-diabetic products; and a continued impact on healthcare reforms, primarily in U.S., Europe and China. Given the current level of exchange rate versus the Danish kroner, the reported sales growth is expected to be around 4 percentage points higher than the growth measured in local currencies. For 2012, growth in operating profit is now expected to be at least 10%, measured in local currencies. The outlook for growth in operating profit reflects significant costs related to the expected launch of the ultra-long-acting Tresiba, including an expansion of the sales force in the U.S. in the middle of 2012. Given the current level of exchange rate versus Danish kroner, the reported operating profit is expected to be 6.5 percentage points higher than the growth measured in local currencies. For 2012, Novo Nordisk now expects a net financial expense of around DKK 800 million, reflecting a net loss on the foreign exchange hedging contracts following the appreciation of the U.S. dollar and the Japanese Yen versus kroner, compared to the exchange rate prevailing in 2011. The effective tax rate for 2012 is expected to be around 23%. Capital expenditure is expected to be around DKK 3.5 billion in 2012 primarily related to investments in filling capacity and a prefilled device production facility in Denmark. Expectations for depreciation, amortization and impairment losses are around DKK 2.9 billion, and free cash flow is still expected to be around DKK 18 billion. All of the above expectations are based on the assumption that the global economy environment will not significantly change business conditions for Novo Nordisk during the remaining part of 2012, and that currency exchange rate, especially for U.S. dollar, will remain at the current level versus the Danish kroner during the remaining part of 2012. This concludes the financial update. Now back to you, Lars. Lars Sørensen: Thank you very much, Jesper, and we’ll now move into the Q&A part. Operator, we are ready to take the first question please.

[Operator Instructions] And we will take our first question from Michael Novod from Nordea.

It's Michael Novod from Nordea Markets. I have 2 questions. First of all, if you could elaborate a bit on Victoza and your confidence in quarterly growth. You said before that you expect 200 million, 250 million per quarter, that would be a reasonable level. Is that something you still have confidence in, i.e., that you are hitting around 9.25 to 9.5 billion for 2012? And also perhaps including in that, the status on Victoza in China. And then secondly, a FDA panel meeting, you will often get notifications 55 days before what to include in briefing materials. Do you still expect that there would be no panel meeting on Degludec or with the new names in mind? Or what should we put into our forecast? Lars Sørensen: Marcus, this is Lars Rebein here. I will start off with the Victoza comments and then we will ask Mads Krogsgaard to elaborate on the typical guidelines for AdComs and the implications of that. If we look at -- when we annualize the historical development of Victoza sales, we've had a quarterly growth of around 200 million. And we mentioned that we believe we are on a steady track going forward. So it's anybody's guess of course with all the uncertainties going forward, but I would tend to think it's a reasonable projection to calculate with somewhere between 200, somewhere around 200 per quarter growth going forward. So that's a reasonable assumption. In terms of China, we've had strong growth, but it was coming from a very, very low base and the product is not reimbursed, so it is typically for private paying patients or patients with private insurance, and so far the numbers are in just double-digit earnings million kroner. So it's going to take it sometime before we can make it noticeably in our numbers, but it's after all a very good sign and it has some indications for other emerging markets that there is a large group of potentially wealthy individuals that will be look acquire this product. Mads, AdCom, it is correct though, isn’t it, the 55 days, working days prior to the PDUFA date as a typical timeline you should have to prepare for the AdCom.

Yes, well, yes, so what you can see Michael, is the PDUFA action date is issued to us as being July 29 and then according to the FDA, you can say working procedure, that means that you typically start discussing the label, i.e., the packaging surface, 6 weeks in advance of that. And if you then work your way backwards, it is true that if they would need 55 working days prior to that to issue a request for a pre-meeting package, et cetera, et cetera, it is getting very close indeed. So of course that is decreasing likelihood that we will see an AdCom. With that said, obviously Novo Nordisk is always planning for whatever can happen in any scenario, and that means that we are fully on top of having prepared ourselves for an AdCom as it relates to the multitude of risks and benefits that can be discussed at such a panel.

We will take our next question from Brian Bourdot from Barclays.

Brian Bourdot calling from Barclays in London. One question on the GLP-1 market in the U.S., please, and one question on insulin competition more broadly. Firstly on GLP-1, it looks like Amylin's share in the U.S. has stopped declining since the BYDUREON launch despite inferior efficacy, a second needle and a cumbersome injection process. Could you tell us whether your plans to expand your U.S. workforce by 15% are motivated by any sort of disappointment at the progress for Victoza in the U.S.? Or is it more to do with your keenness to ensure a successful Degludec launch? Or is it both? And the second question, I guess, on insulin competition, your competitor Eli Lilly made some aggressive comments regarding its ambitions in the insulin space the other day. In particular they claim to have made significant progress in emerging markets and also claim biosimilar glargine could take 1/3 of the long-acting segment. Could you please offer your perspective on the competitive situation and how you expect the basal segment to develop as new products, including your own, are introduced? Lars Sørensen: Thank you. This is Lars Rebein here and I will attempt to give a shot at both questions. With regards to the GLP-1 market in the U.S., we have seen that BYDUREON has gotten off to a reasonable start, which was what we anticipated. As I mentioned, we have the better part of the lion's share of the market, with a 55% market share in the GLP-1 segment in the United States, and the new scripts that we are picking up every week is very consistent with historical patterns. So our expansion and intention to expand this field sales force is actually more predicated on our ambition and willingness to support our modern insulin franchise and the potential launch of Degludec and DegludecPlus, or should we rather say Tresiba and Ryzodeg, going forward. I know it's difficult even for us to remember. But so that's the key rationale for that. What we see in the U.S. is we are seeing that BYDUREON primarily is expanding the market. So this is viewed as a positive for us and giving momentum behind the whole GLP-1 segment versus the DPP-4 segment. With regards to insulins, yes, Lilly has made a number of bold statements, and what we do see is Lilly is losing ground in the United States due to contracting dynamics, if we can call it that. It is also true that if we take China as an emerging market leader, it has gained market share in China because of extension of the reimbursement and adoption on the regional essential drug list with modern insulins. And so, yes, we are anticipating a continued strong battle with Lilly on the emerging market, in fact, as well as everywhere else. Whether or not they will be successful is of course questionable. In general, we would say that generics is not the place to be in. We see now that, for instance, that if you take the global insulin market, 85% on the total value of the global insulin market is constituted by patent-protected modern insulins. So there will be a transitional phase where one can buy volume, get some business in generic medicines, but we cannot arrive at profitability and growth rate that is necessary to fund innovation going forward if you are betting on generic medicines. So that would be my comments. They are to be reckoned with and they are a long and respected competitor.

We'll take our next question from Carsten Madsen from Carnegie Banks.

Carsten from Carnegie here. First a question to Mads on your newer, fast acting insulin here. How far are you in the work? It seems -- I actually thought that you are sort of approaching the end of Phase I and were more or less ready to move into Phase II trials with an identified new fast-acting insulin. And how long time do you think until you will actually be ready to move into Phase II? And how confident are you that you will actually be able to innovate this segment? And then just to follow-up to Lars, did I understand you correct that Lilly also in China had bought volume? Or was it primarily because of more EDL listings? Or how should I understand the comments made about China? Lars Sørensen: Thank you. Mads, first a comment to you around the faster acting formulation of aspart, where we are and what the timeline should be expected on that.

Yes, well, Carsten, you can -- in some regards, you can compare to what we've done in the oral insulin and GLP-1 space, where you essentially test out a number of different, in an almost competatorial [ph] fashion, a number of different formulation candidates in humans, being the best species to actually verify that you get the faster onset of action. What you essentially want is an action profile that gives you a faster onset of action with a similar duration of action to that observed with today's fast-acting modern insulins. So that is being done in this, you can say, competatorial [ph] way, and what I am saying is that at the end of the year, it is our hope that we can then select candidate not for Phase II development, but for Phase III development, because the way that these formulations are engineered, it is actually possible to move into Phase III without a Phase II dose-range finding phase for the sheer reason that insulin is titrated regardless of Phase II, whereas other products you have to do dose-range finding in a more classic setting in a Phase II. Lars Sørensen: Thank you very much, Mads, and then a clarification on China. The loss to Lilly in China is primarily relating to the fact that Lilly had expanded provisional reimbursement drug listing. Whereas previously they have had 14, they have gone to 31 provinces where they are on the provincial reimbursement drug listing. That leads to volume loss on our part. And with regard to human insulins, we have in some of the biddings which takes place, since human insulin is on the essential drug list, we’ve lost to, and it's primarily to local manufactures, volume on human insulin.

And we will take our next question from Keyur Parekh from Goldman Sachs.

Mads, I believe the EMA is about to revise their guidelines for proving bio-equivalence for insulin and for them to include analog insulins as the part of the revised guidelines. Can you share with us your perspective on what might be required and what feasibility do you see for analog insulins to have biosimilars in Europe over the course of the next 2 to 3 years? Lars Sørensen: Thank you very much. Mads, that was very direct to you.

Yes well, obviously we have been involved as one of the, so to speak, seriously heard parties. It seems the EMA sent out for a hearing about their draft guidelines in the different therapy groups related to biosimilars. And it is true that there are many aspects to consider for the EMA before they issue their final guideline, and one of them is clearly bio-equivalence. Is that enough? Our view is that since insulins are known in a, you can say, somewhat differential manner to influence also immunogenicity and sometimes thereby the pharmacokinetics of these compounds, it is our view that there is a need to actually do not only bioequivalent studies and PKPD as such, but full immunogenicity studies and you can always discuss the HB [ph] of 6, 12 or 24 months duration. And these are the kinds of considerations that we've shared with the agency. But until we see the final product-specific guidelines in the insulin category, it’s difficult to say much more.

And we will take our next question from Mark Dainty from Citi.

Just 2 quick questions please. Could you just give some clarity about the potential timing of European submission for the -- for N8-GP, just given the extra requirements of pediatric exposure there? And then on Victoza and obesity, given the comments that the FDA Advisory Committee meeting about cardiovascular outcome trials or at least cardiovascular event analysis, could you just share with us your perspective of what you think may be required for Victoza, assuming the efficacy guidelines that you submitted? And whether you think you would have enough events in your obesity population to perform a meta-analysis, and if not, whether you would need to use the diabetes population to support that and if you think that would be acceptable? Lars Sørensen: Thank you very much. So, Mads, 2 questions for you. The first one, to give a little bit more clarity on the timelines that you are anticipating on N8-GP given the requirements for pediatric studies.

Right, well, we are obviously having dialogue [ph] with the pediatric committee, the PIP committee in Europe. We are pretty much aware of the pediatric guidelines, and what we're doing right now is the main study that is gating for the overall submission timing, and where you may be aware that we have to show 50 exposure days in all patients. So it’s a question of when does the last patient have a 50 exposure experience with the product. And our anticipation is that, that should happen kind of towards the turn of the next year, so that we are recruiting this year and then treating the better part of next year. The pediatric requirement, I will not comment more specifically other than say that we are discussing with EMA and the pediatric committee, recently, how much to submit and when to submit it, whether you get a waiver, whether you do part of it, or whether you do the full thing. And we haven’t disclosed exactly what is the case, but do trust us that we are in a very constructive dialogue project-by-project on the pediatrics hemophilia. This is European issue, as you know.

Then, Mads, on obesity and this is Liraglutide in obesity. These recent AdCom meetings are starting the future CV requirement for new drugs in the obesity space. What are your anticipation of influence on, if any, on our program?

Yes, well, as you are all aware, those who have been following this intensely as we have, obviously this is supposed to give guidelines for new products that are entering Phase III, so that they can prepare themselves for what is needed pre-approval as compared to post-approval. With that being said, Liraglutide 3 milligrams is and has been for quite some time undergoing Phase III development, and you can say after the discussion that took place in March 28 and 29, I think a fair statement would be, and this is actually supported by the senior staff at the agency, namely Bob Temple and Mary Parks and others, I think a fair statement would be that the agency clearly sees increasing overlap, both between the obesity and type 2 diabetes populations, but also between drug development in these areas, as exemplified by Liraglutide. And our view is that even though this was not unanimous, there is a general consensus also in the panel that to use some degree of enrichment in your patient population to get up there where you can accumulate a number of mazes, whether it’s custom maze, narrow maze or broad maze, that is of course a discussion we will have with the agency. Then we will be able to use the SCALE program, where the total amount of mazes will be modest, if I can put it that way, and analyze that together with the elements of the diabetes program where adjudication has taken place in a good way -- and in fact the FDA was kind enough to actually adjudicate the lead trial events that have taken place for us with the FDA adjudication committee because we were operating in the pre-CV guideline era when we had the lead trial program ongoing. So we are actually pretty confident, even though this of course remains to be discussed with the agency, that the aggregate of all the mazes that we have from the 20 or more trials we've done in diabetes plus the Phase II and III programs that we've done in obesity should lend themselves well to a meaningful CV analysis that can rule out the pre-approval upper-95% confidence bound of either 1.8 or 2.0. As you will recall, we did that already in the lead program with the data that we had there. In about 15 out of 16 analysis, we were below 1.8. But this is something we will discuss with the agency and we will do it sooner rather than later.

We will take our next question from Sachin Jain from Bank of America.

Just a couple of quick questions, please. Firstly on NovoSeven, you've called out slightly lower expectations versus previously. I wondered if you have any color on how much of the shortfall is budgetary constraints versus lower bleeds due to clinical trials ongoing and whether those pressures are increasing or decreasing from here. Secondly, on the once-weekly GLP-1 Semaglutide versus Victoza weekly, just any color on timing of the decision. And then the final question on CV safety, just a quick follow on. Could you just run us through the basis of the discussions with the FDA as to using the 1.8 diabetes dose to support safety at the 3-milligram obesity dose? Lars Sørensen: Jesper, with all the uncertainties surrounding NovoSeven and the experience we have, do you care to comment on if you can sort of dissect the impacts to the different either clinical trial participation, budgetary control or surgeries, or what have you?

Of course we don’t have complete clarity as to where the clinical trials are undertaking for competitors trying to develop a NovoSeven, but I'd the prime focus here as we see it is a reduction in the number of patients being -- undergoing surgical intervention, typically orthopedic surgery for either knee or hip surgery. And that has been restrained both in U.S. and particularly in a European setting, and we are seeing, in certain of the Southern European markets, a significant drop in usage compared to prior years. But it's not in the ordinary hemophilia treatment. The basic treatment is primarily related to the surgical intervention. Then there may also be an element of an increased -- an individual converse increased use of immune tolerance treatment to try to overcome the inhibitor reaction and treat patients with Factor VIII. That could be some of the cases, but the prime part we would ascribe to reduce the surgical use of factor VII. Lars Sørensen: Thank you very much, Jesper, and then Mads Krogsgaard will cover for you first on comment on the once-weekly, the timing of our decision, and the implications and when we would expect to have a once-weekly preparation for GLP-1 on the market.

Yes, well, Sachin, so there is no change there. What we have said is that around midyear we should be able to update the market on which one or ones have been selected. As you know, we have announced that we will come one with the Phase II data from Semaglutide at a major conference this year, which is indeed the case. I can confirm that. Whereas in the case of the once-weekly Lira depot formulation, it is so that we are still awaiting analysis of the clinical data such that we can make the judgment call between the 2. So no real change there, but we will get back later or around midyear. Lars Sørensen: And then the CV safety issues, whether there -- you have any concerns around having accumulated the larger portion of patient experience on 1.8 as opposed to 3 mg, which is being used for dosing in obesity.

Yes. Well, first of all, just a piece of anecdotal, you can say, data. It is well known that in the lead trial meta-analysis, that we have done many of by the way, the BMIs that we are operating with are around 29-point-something on average, with at least 3 in 4 being slightly heavier and the others being slight lighter in weight terms. And in the SCALE program where the dose is higher, 3 mg compared to 1.8, we are also operating with average BMIs, that are, I would argue, quite a bit above 35. So the percent difference that you'll get in exposure, just driven by sheer body mass in SCALE versus lead is actually, you can say, erasing part of the difference between the 2 doses. On top of that, there's a significant overlap in the overall exposure, i.e., the area under the curve in patients, whether they are getting one dose or the other. But these were more kind of, you can say, empirical considerations. When it comes to our liaison with the agency on this one, we've discussed that a lot with the FDA. Obviously, the FDA did not have a cardiovascular guideline and they still don’t, by the way, for obesity products. That is something that has emerged more recently in the aftermath of all the programs that we heard about last year, several of which were issued complete response letters. Now based on the discussions that we have had with the agency, it is so that they consider data on cardiovascular outcomes in diabetic patients who are at high risk. They may also be older, et cetera. It is of relevance to what we are going to witness in the obese population. Obviously it cannot stand alone. I.e., we have a adjudication committee that is adjudicating what is going on in the programs for obesity, and then of course, it becomes an approach where we will discuss with the agency what is enough, because quite frankly we also have the LEADER trial that is encompassing 9,000 patients treated for up to 5 years. So we will have discussion, I believe, in the second half of this year, I hope, with the FDA to further corroborate the notion that we are on the right track with what we've discussed with them previously and what we are doing now. Lars Sørensen: Thank you very much for the very, very good observation. It is a different dose and, therefore, not necessarily completely transposed from one to the other.

We'll take our next question from Gavin MacGregor from Credit Suisse.

Two questions please. Firstly on Levemir, looking back over last few quarters and particularly this quarter, there's been an acceleration in the growth rate. So I'm wondering if you can give a bit of color behind that. Is it certain geographies? Is it volume gains or just pricing? And then secondly, looking at the diabetes care franchise, the operating margin for that business has been steadily expanding over the last several quarters. Just wanted to see what you think in terms of whether that can continue. How far can that really go? Lars Sørensen: Levemir, yes, we've had a relatively strong showing of Levemir. It is largely reflecting the performance of the product in the United States, where we are conducting a lot of direct-to-physicians and direct-to-patient activities, especially highlighting our device capability with all our insulin but also with Levemir. So it’s largely reflecting a strong performance in the United States. Jesper, do you want to comment on the diabetes care business, the margin development going forward, what our expectations are?

Yes, it has been a gradual progression, as you read rightly, due to organic. And of course, you have to be careful with the individual quarters, where first quarter last year was marked by some provisions for legal cases. But I think the general trend that you pick up is a gradual improvement and that’s really coming from a margin expansion, selling more advanced products, where you see the results of selling a higher proportion of Victoza and the modern insulins. Whereas the overall mix was not improving due to the lower sales of NovoSeven, of course, the relative improvement can be directly related to the diabetes care franchise. And then of course, when you look into 2012 and moving onwards, is largely attributable to we're going to expand our U.S. sales force, primarily to be ready to market Tresiba. And of course, that expansion in the sales force and hopefully a significant advancement in launch costs in some of the client markets with the prime focus first on U.S., I give you that would certainly temper the development, near-term, with the prospects of delivering a further expansion longer term and could take out some of the difference longer term that we have had historically between the biopharm franchise and the diabetes care franchise.

And we will take our next question from Vincent Meunier from Exane BNP Paribas.

Two questions please. The first one is another follow-up on Victoza obesity. What could be the implication of the Citizen petition, given the higher dose used in obesity and the potentially increasing safety risks? And the second question is related to your strategy in immunology. What is your strategy there, following the decision to terminate NKG2D? And what could be then the impact on the long-term R&D expenditure? Lars Sørensen: Citizen petition, Mads, and first of all maybe just say a few words on it. And then, do you think it's going to have any implications for obesity? Then I will get to immunology, yes?

Well, indeed, as I also talked a little bit about during my presentation, the Citizen petition is basically based on 2 things: a, historical data mostly derived from the pre-approval era of the requisite R&D. And in that regard, not much has changed. The only things that have changed since is that 2 of the 3 pre-clinical postmarketing required studies have been completed, and as I mentioned, one of the criticisms at the AdCom was that we have not studied the occurrence of pancreatitis in diabetic creatures, only in non-diabetic animals. What we’ve done now is taken Zucker diabetic fatty rats and done very rigorous slicing of the pancreas, looking at endo -- sorry, yes, it was endo and exocrine parts of the pancreas using many markers of potential pancreatitis and seeing absolutely nothing. The other one was the mouse knockout study where we confirmed our model, in which it's rats and mice that are sensitive to functional GLP-1 receptors being present on the C-cells and driving a proliferation response that is not seen in monkeys and humans for the sheer reason that they do not express functional GLP-1 receptors in the thyroid. And do bear in mind that type 2 diabetes was approved by the agency based on 3-milligram data from obesity Phase II. What they looked at, Mary Parks and her colleagues, later on in the process was the 2-year extension data from our Phase II program on 3 mgs in obesity and that was what actually gave us, you can argue, the type 2 diabetes approval for 1.8 milligram. So we have already used quite a bit of 3-milligram data in the approval process, and when you ask about the increased safety risk, I mean, it’s anybody’s guess what we will see in the SCALE program, but what I know today is that we completed one study called the 19 23 bodyweight maintenance study. And even though that’s a smaller study, it was done for 1 year with 3 mgs, and based on that, the benefit/risk profile in terms of what we see safety-wise is looking very reminiscent of what you see at the other diabetes doses. So if we can repeat that performance, than I am clearly cautiously optimistic that we have something very exciting here. But more about that next year when we, in the first half, can reveal the data from the SCALE program. Lars Sørensen: Yes, Mads, and then -- or perhaps I should talk a little about immunology, but the question was, is that going to have any implications on our overall guidance in terms of cost and R&D and to our general R&D budget? And it is not. We of course, when we budget our activities at this early stage of the pipeline as our immunology projects are at, we budget with some attrition. So now this project is going in to a phase where we will evaluate its further destiny, whether we will continue with some other indications, Crohn’s disease or IBD, whatever, and so it would not have any significant impact on the overall R&D budget.

Yes. We'll basically continue to assume that until we have clinical proof-of-concept of any of our inflammation compounds, then you should anticipate that we'd spend approximately 10% of our R&D resources on building up the inflammation franchise.

We’ll take our final question from Sam Fazeli from Bloomberg Industries.

Just a couple of questions very quickly. On Victoza, can you just reiterate again why the numbers came in a little softer than past expectations were? As I remember, you were talking a little bit about some patterns of buying, but if you could just go through the items there that you would like us to take away from this meeting and hopefully highlighting specifically whether you saw competition from BYDUREON, although Amylin says that most of the patients are coming from new to script, new to class. The other question I have is on NovoSeven. What are you seeing in terms of procedures in hospitals? It doesn’t correlate with some of the data that we have seen. We've in fact seen the opposite, where hospital procedures, specifically in orthopedics, knee and hips, both in the U.S. and Europe, have been up and revenue for those hospitals has been higher than that. So is it procedures that are pressurizing you? Or is it the new patterns of buying that hospitals are going through that are pressuring you on NovoSeven? That’s it. Lars Sørensen: Mads, I will ask to comment on the NovoSeven situation as we see it. You may have different data than we have. In regard to Victoza, just to reiterate, the fourth quarter was impacted by approximately DKK 200 million in rebates that were reversed, due to the fact that we, on a ongoing basis, are assessing what the average annual rebates are on all our products and in particularly in the United states. And this is particularly in the U.S. There is also some influence in France, for instance, when we reach certain volume thresholds then we have to give some rebates and that's calculated late in the year, but that's primarily a U.S. issue. So you have to take DKK 200 million out of the trough of Q4 and add it to the quarters 1 to 3 to normalize the sales. And then if you want to go even further back, then you should take off the peak, which counts on the pipeline filling. And it all took place in the United States. So when you smooth out these curves, then you get to a growth rate of approximately DKK 200 million per quarter. And so we -- and then we mentioned further to that, that it is customary -- at least that's -- we've seen it historically that Q1 numbers are relatively soft for diabetes product. To go in and look at Amylin and Lilly numbers, and Byetta and BYDUREON, they see the same thing: Q4 bigger than Q1. So with that said, the numbers are following exactly the trend that we have anticipated and also the trend that we have used in our guidance, and so the numbers as such are not a major surprise to us. With regard to hospital procedures or not, Mads, do you have any comments on this?

Yes, well, the reason why we are following it, normally we say, which is also true, that it’s a very erratic and aren't too predictable amount of surgeries that's taking place in the different areas of the world, because it fluctuates, because the numbers are -- whether you look at them one way or the other, they are always rather small. But what is clearly present right now is a situation where we are looking into it because we need to know what -- which surgeries we can plan for our hemophilia programs. And quite frankly, Sam, it is a fact, as we see it, there are less surgeries -- elective surgeries ongoing than we are used to seeing this year, in first half of the year. That can change over time. That we cannot predict, particularly in this area, but this is the numbers that we have seen. Lars Sørensen: Thank you very much. And, ladies and gentlemen, thank you for this interest. We shall be back with the half year result following a nice summer vacation, hopefully. And so thank you for your interest. And any further questions to this, please contact our Investor Relations officers. Thank you.