Lars Rebien Sørensen - Chief Executive Officer Kåre Schultz - President and Chief Operating Officer Jesper Brandgaard - Executive Vice President and Chief Financial Officer Mads Krogsgaard Thomsen - Executive Vice President and Chief Science Officer

Tim Race - Deutsche Bank Sachin Jain - Bank of America Merrill Lynch Richard Vosser - JPMorgan Michael Leuchten - Barclays David Evans - UBS Simon Baker - Exane BNP Paribas Michael Novod - Nordea Markets Philippe Lanone - Natixis

Good day and welcome to the Q4 2014 Novo Nordisk A/S Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference to Lars Rebien Sørensen, CEO. Please go ahead sir. Lars Rebien Sørensen: Thank you very much. Welcome to this Novo Nordisk conference call regarding our performance for the full year of 2014 and the outlook for 2015. I am Lars Rebien Sørensen, the CEO of Novo Nordisk. And with me I have President and Chief Operating Officer, Kåre Schultz; Chief Financial Officer, Jesper Brandgaard; and Mads Krogsgaard Thomsen, our Chief Science Officer. Present are also 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 one hour. As usual, we’ll start with the presentation as outlined on slide number two. The Q&A session will begin in about 25 minutes. Please note that the conference call is being webcast live and a replay will be made available on Novo Nordisk webpage. Turn to slide number three. As always, I need to advise you that this call will contain forward-looking statements. Thus 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. Turn to slide number four. Sales growth in 2014 was 8% in local currencies and 6% in Danish kroners. This growth reflects the expected challenge related to partial loss of reimbursement and a large pharmacy benefit manager in the United States effective of January 2014. Generic competition to Prandin and expanded Medicaid and Medicare Part D utilization. The growth was driven by North America, International Operations and Region China. When looking at the products, the growth was primarily driven by Levemir and Victoza. The rollout of Tresiba, the once daily new generation insulin continues. In Japan where Tresiba was launched in March ’13 it now represents 26% of the basal insulin market measured in monthly value market shares. Within R&D we are pleased with the recent FDA approval of Saxenda for the treatment of obesity and the positive opinion from the European THMP. Turning to financials, operating profit grew 13% in local currencies and by 10% in Danish kroner. Diluted earnings per shares increased 8% to 10 kroner and €7. The outlook for 2015 sales growth is 6% to 9% and around 10% for operating profit growth both measured in local currencies. The impact from currencies currently indicate a very significant impact on reported numbers in Danish kroners. Sales growth is expected to be 12% higher and operating profit growth is expected to be around 19% higher equivalent to a pretax profit growth of around 16%. At the Annual General Meeting in March, the Board of Directors will propose an 11% increase in dividends to DKK 5 per share each of 20 Danish [indiscernible]. With this over to Kåre for an update on sales. Kåre Schultz: Thank you, Lars. Please turn to slide five. In 2014, North America accounted for 61% of growth followed by international operations in China accounted for 25% and 14% of growth respectively, all measured in local currencies. Sales growth in North America was 11% in local currencies reflecting a continued positive contribution on pricing in the U.S. and market share gains for both Levemir and Victoza. Sales growth in North America remains negatively impacted by the partial loss of reimbursement at a large pharmacy benefit management expanded Medicaid and Medicare Part D utilization as well as well as generic competition. The later effect started to annualize as of August 2014. Sales within international operations grew by 14% in local currencies and by 4% in Danish kroner. The modest growth in Danish kroner reflects the depreciation of the Argentinean pesos, the Turkish lira and the Russian ruble. Growth in IO was driven by robust configuration of all three modern insulins partly offset by decline in human insulin sales due to lower sales as well as the continued conversion of the market to modern insulin. Sales in Region China increased by 13% in local currencies the sales growth was driven by all three modern insulins but sales of human insulin only grew modestly. Please turn to slide number six. From a product perspective sales growth was realized within both diabetes care and biopharmaceuticals with the majority of growth coming from modern insulin and Victoza. Within modern insulin growth is primarily driven by Levemir which accounts for 42% of the growth measured in local currencies. Sales of NovoSeven remained unchanged in local currencies. The stagnant sales development reflects growth in international operations which is being offset by lower sales in Europe, Japan and North America. Sales of Norditropin increased by 10% in local currencies. The sales growth is primarily driven from North American and is driven by contractual wins, increased demand driven by the pre-filled FlexPro device as well as the support programs in Novo Nordisk offers, healthcare professionals and patients. Novo Nordisk is the leading company in the global growth hormone market with a 33% market share measured invoice. Please turn to slide number seven. Victoza sales increased by 16% in local currencies in 2014, sales growth was primarily driven by North America accounting for more than 81% of growth. In North America Victoza increased by 20% in local currencies. This reflects a positive impact from pricing and a continuous growth of the GLP-1 class. The volume growth in the U.S. is still at relatively low level compared to the beginning of 2013 but has stabilized over the last couple of months. Victoza remains the clear market leader with a 66% volume market share. Despite the partial loss of reimbursement with a large pharmacy benefit manager in the U.S. as of January 2014. The recent launches of the two-weekly GLP-1 compounds dulaglutide and albiglutide have had little impact on the overall U.S. GLP-1 market size and Victoza market share. However it is still too early to conclude on the impact. Please turn to slide number eight. Levemir grew by 25% in local currencies accounting for 42% of total growth. Growth of Levemir was primarily driven by North America where sales increased by 38% in local currencies. Japan and Korea sales of Levemir were negatively impacted by the strong uptick of Tresiba in the Japanese market. In the U.S. Levemir continues its solid trajectory. During the last year Levemir has gain more than two market share points in the modern basal insulin segment. This performance is driven by a strong commercial and promotional focus in our U.S. organization. Please turn to the next slide for an update on the Tresiba rollout. The rollout of Tresiba continues and the product has now been launched in 23 counties most recently in Italy. In Japan, where Tresiba was launched in March 2013, Tresiba has reached 26% of the basal insulin market measured as monthly value market share. Similarly Tresiba has shown a solid penetration in other markets with reimbursement at a similar level as insulin glargine. Ryzodeg has now also been launched in India. The launch activities in both India and Mexico are progressing as planned. In January 2015 Switzerland was the first country to launch Xultophy, further launches are planned during 2015. With this over to Mads for an update on R&D.

Thank you, Kåre. Please turn to slide 10. I will start with an update on DEVOTE, the recruitment of 7,644 type 2 diabetic patients with existing or high risk of cardiovascular disease has now been completed. Furthermore, the required number of adjudicated major adverse cardiovascular events for the pre-specified interim analysis has been accumulated very recently. In order to preserve the integrity of the ongoing trial, the DEVOTE trial remains blinded to all but a small dedicated unblinded Novo Nordisk team that has access to the interim data. This unblinded team will intact with the FDA and decided on resubmission of the insulin Degludec filed based on the interim data, as just stated we and the management team do not have access to the results of interim analysis and the results will not be communicated when the submission decision is taken. We will only communicate that we will be submitting based on the interim data or that submission will await to file DEVOTE results. This decision is still expected during the first half of this year. The DEVOTE trial is now expected to be completed in the second half of 2016 compared to the previously communicated window between October 16 and October 17. Please turn to the next slide. In December 2014, the FDA approved the NDA for Saxenda, the first once daily GLP-1 analogue for the treatment of obesity. Saxenda is indicated as an adjunct to a reduced calorie diet and increased physical activity for chronic weight management in adults with obesity and at least one weight related comorbidity such as type 2 diabetes, hypertension or hyperlipidemia. On the 22nd of January, the Committee for Medicinal Products for human use, the CHMP under the European Medicines Agency adopted a positive opinion for the use of Saxenda in the treatment of obesity. The marking authorization from the European Commission is expected around two months from now. We expect to launch Saxenda in the U.S. during the first half of this year, subject to the European Commission's approval Saxenda is expected to be launched in several European markets starting in 2015. Please turn to the next slide, in December 2014 we completed the DUAL V based repeat trial with Xultophy briefly 557 type 2 diabetics that were previously inadequately controlled on insulin glargine and metformin were randomized to either 26 weeks of treatment with Xultophy or to further optimization of insulin glargine in addition to metformin. After 26 weeks of treatment patients on Xultophy had achieved a superior reduction of HbA1c up 1.8 percentage points compared with 1.1% for patients intensified with insulin glargine. From a baseline of 8.4% A1C 72% of the patients treated with Xultophy achieved treatment target of 7%. The corresponding number for insulin glargine was 47% from a baseline of 8.2% A1c. On top of the improved glycemic control patients randomized to Xultophy experienced a significantly lower rate of confirm and nocturnal hypoglycaemia compared to patients randomized to insulin glargine. Moreover they experienced a weight loss of 1.4 kilograms for patients treated with insulin glargine increased their body weight by 1.8 kilos. Finally, on Xultophy and as mentioned by Kåre, Switzerland was in January of this year the first country globally to launch the product. Please turn to the next slide. In January 2015 we completed the second Phase IIIa trial for faster-acting insulin aspart in asset 3 type 2 diabetics inadequately controlled on basal insulin were optimized with the respect to basal treatment for eight weeks, the 236 patients who failed to reach the target after eight weeks were subsequently randomized to either addition of meal time faster-acting aspart or further optimization of the basal insulin therapy for an additional 18 weeks. From an hbA1c of 7.9%, the patients who added faster-acting aspart further improved the A1c to 6.8% this end of trial A1c was superior by 0.9% to the reduction achieved undergoing optimization with basal insulin therapy alone. Please turn to the next slide for an update on other key development milestones. In December 2014, we initiated the last trial in the global Phase III for semaglutide, the sixth and final pivotal trial sustained by investigates the efficacy and safety of semaglutide against placebo as add on to basal insulin in around 400 type 2 diabetes patients. Within all GLP-1 we decided in November 2015 to discontinue the further development of OG217GT as the achieved drug exposure in healthy volunteers was considered insufficient. The all semaglutide project still expects to report phase II data during the first half of this year. Within obesity, we initiated the first phase I trial with a novel long-acting amylin analogue. The trial will investigate the safety tolerability and pharmacokinetics in around 60 overweight to obese but otherwise healthy men. Within hemophilia we completed in December 2014, Pathfinder 5, a multinational trial investigating the safety and efficacy of N8-GP when administered for prophylaxis in previously treated pediatric patients with hemophilia A between 0 and 11 years of age. The patients were treated for 26 weeks, during which the median annualized bleeding rate was 1.95 per year, 80% of all bleeding episodes were resolved with two or less infusions. N8-GP appeared to have a safe and well-tolerated profile, and no participants developed inhibitors. As previously announced in October last year we initiated a Phase 3A trial with the once-weekly growth hormone in NN8640 in adults with growth hormone deficiency. The 35 week trial investigates the safety of once-weekly NN8640 compared to both placebo and daily administration of Norditropin in 280 adults. With that over to Jesper for an update on the financials.

Thank you Mads. Please turn the slide 15. 2014 sales increased by 8% in local currencies and by 6% measured in Danish kroner to 88.8 billion. The reported gross margin improved by 50 basis points to 83.6. The development reflects an underlying improvement driven by higher prices in North America and the positive impact from product mix due to increased sales of modern insulins and Victoza. Sales and distribution costs increased by 1% in local currencies and decreased by 1% in Danish kroner to 23.2 billion. The modest increase in cost reflects sales force investment in the US, China and related market and international operations which is offset by lower promotional spend in US and Europe. Research and development costs increased by 18% in local currencies and by 17% measured in Danish kroner to 13.8 billion. The significant increase in cost reflects the progression of the late-stage diabetes care portfolio as well as the cost associated with the discontinuation of all activities within inflammatory disorders. Operating profit in local currencies increased by 13% and by 10% measured in Danish kroner to DKK 34.5 billion. Net financials show - of around DKK 400 million compared to a net income of DKK 1 billion in 2013. The foreign exchange result was an expense of DKK 380 million compared to an income of DKK 1.140 million in 2013. The result reflects losses on non-hedged commercial balances, following the depreciation of the Russian ruble and the Argentinian peso. The effective tax rate for 2014 was 22.3%, the decrease of 0.3 percentage point versus last year mainly reflects an effect from the gradual lowering of the Danish corporate income tax rate. Please turn to slide 16. Overall there was a slight negative impact from currencies on operating profit in 2014. This was primarily driven by the depreciation of the Japanese yen throughout the year as well as the depreciations of the Argentinian peso and the Russian ruble compared to the average rates in 2013. During the second half of 2014, the US dollar significantly appreciated against the Danish kroner. The reason rapid appreciation of the US dollar versus the Danish kroner to a spot rate of 659 compared to the average rate of 562 in 2014 is expected to have a significant positive impact on operating profit in 2015 provided that is based at the current level. The positive impact from key invoicing currencies on sale and operating profit for 2015 will however partly be offset by losses on hedging contracts. Please turn to slide 17 for the financial outlook. Sales growth for 2015 is expected to be 6% to 9% measured in local currencies. Given the current level of exchange rate versus the Danish kroner, the reported sales growth is expected to be around 12 percentage point higher. The sales growth reflects expectations for continued robust performance for the portfolio of modern insulins, Victoza and Tresiba as well as well as modest sales contribution from the launches of Saxenda and Xultophy. These drivers are expected to be partly countered by increased rebate levels in the US, intensifying competition within diabetes and biopharmaceuticals as well as the macroeconomic conditions in a number of markets in international operations. Operating profit growth is expected to be around 10% in local currencies and around 19 percentage point higher for the reported growth equivalent to a growth of approximately 29% reported in Danish kroner. The local currency expectations for operating profit growth above the level of sales growth reflects expectations from modest growth in selling and distribution costs and also administration costs as well as expectations for a slight decline in R&D cost. The reduction in R&D cost reflects the 2014 one-off cost related to the discontinuation of all activities within inflammatory disorders as just mentioned. The gross margin is expected to stay at similar levels to 2014 in local currency rates. For 2015, we expect the net financial loss of around DKK 5 billion. This primarily reflects losses associated with foreign exchange hedging contracts, following the recent appreciation of the US dollar versus the Danish kroner compared to the average prevailing exchange rates in 2014. This loss will partly offset the growth in reported operating profit and is expected to result in a pretax profit growth rate of around 16%. All of the above again assuming that the exchange rate for Novo Nordisk key invoicing currencies remain at the current level for the remaining part of 2015. The effective tax rate for 2015 is expected to be around 22%. Capital expenditure is expected to be around DKK 5 billion in 2015, primarily related to investments in the expansion of manufacturing capacity for biopharmaceutical products, expansion of insulin filling capacity, additional capacity for insulin API production as well as construction of new research facilities. Depreciation, amortization and impairment losses are expected to be around DKK 3 billion. The free cash flow for 2015 is expected to be between DKK 29 billion and DKK 31 billion up from DKK 27 billion in 2014. In connection with the full year release of the 2012 results, we updated our long-term financial targets. The targets were based on the business environment at the end of 2012 and assumed the continuation of the overall business environment with regard to the US healthcare system, regulatory requirement, pricing environment, competitive environment and exchange rates. The realized 13% operating profit growth measured in local currencies in 2014 was slightly below the target of 15%. However when adjusting for the one-off cost related to the discontinuation of inflammation, the underlying operating profit growth in local currency would have reached the threshold of 15%. The operating margin increased during 2014 to now 39%. This reflects a gradual increase versus the five year average of 34%. In 2014, operating profit after-tax to net operating assets increased to 101% and this being well above the five year average of 77%. The rates performance reflects a continued robust operating profit growth combined with the stable effective tax rate and relative limited increase in net operating assets. Cash to earnings ratio measured as a three year average achieved the long-term target ratio. The slight decrease compared to the 2009 to 2013 average is related to the higher growth in International Operation and Region China which have everything else being equaled higher capital requirements. In 2015, we will continue of the long-term financial targets as we consider the meaningful and achievable but yet ambitious. Please turn to the next slide. At the Annual General Meeting on 19th of March 2015, the Board of Directors will propose an 11% increase in dividend to DKK 5 per share of 20 euro corresponding to a payout ratio of 48.7. For 2013, the payout ratio was 47.1. No dividend will be paid on the company’s holding of treasury shares. Yesterday, the Board of Directors approved the new share repurchase program of up to DKK 15 billion to be executed during the coming 12 months. The suggested dividend payments and new share repurchase program are a confirmation of our policy to return the generated of our policy to return the generated cash to our shareholders. Furthermore in order to maintain capital structure flexibility, the Board of Directors will at the Annual General Meeting in 2015 propose a reduction in the B share capital by cancelling B shares at a nominal value of DKK 10 million from the company's treasury holding of shares. This is equivalent to 1.89% of the total share capital. The reduction in share capital is in line with previous years after implementation of the share capital reduction, the company's share capital will amount to DKK 520 million. This concludes the financial update, now back to you Lars. Lars Rebien Sørensen: Thank you very much Jesper. Please turn to slide number 20. To summarize with brief with our financial performance in 2014. It was a year that was more challenging than usual but where we remained encouraged by the performance of Levemir, Victoza as well as the uptake of the Tresiba in key markets. 2015 will be an important year for us with the launch of Saxenda and Xultophy as well as significant results from our late-stage development portfolio. We're now ready to take the Q&A session where we as usual ask you kindly that to restoring yourself to only two questions. Operator we are now ready to take the first question.

Thank you sir. [Operator Instructions]. We'll take our first question from Tim Race of Deutsche Bank.

Hi there, gentlemen. Thanks for taking my question. First question is on the cost line as per sales and distribution. That interest account has been relatively low when you talk about promotional cost being low in the US and Europe. Is this now sort of the real world if that being, the common [ph] being more cost conscious going forward? Obviously say a phasing effect and could you give me some examples of why or how are you reducing cost in the quarter or at least keeping costs stable. And then just maybe a question on Levemir and the price protection that seen picking in both quarter. Hope if you just explain how that's working and how we should expect to see that working on a sort of costly basis going forward, as I understand price protection getting some one year contracts and it's more than that now. So could you just help us understand what we should expect from sort of some of the price gaps and heat [ph] built into contracts and how that should evolve? Thank you. Lars Rebien Sørensen: Thank you Tim. This is Lars Rebien here. Yes there is a cost line clearly a restrain on development of S&D. How - is this something that's going to continue or are we just basically getting at local footprint or what is the story here?

Yeah I think there is a significant element in Novo Nordisk having established a global footprint in terms of our sales force. And we feel that we can constantly operate in the ballpark of 26% as in the S&D ratio out of total sales. And savings in 2014 was partly related to the promotional activities in the European and the US markets, we would anticipate that we would slightly ramp up our direct to consumer marketing in the US in 2015 but we would still feel with the growth in our business we will feel comfortable operating at a similar ratio, we don't have any current plans for expansion of the US sales force which is of course a key cost driver. So I think a fair assumption for 2015 will be around 26 and as the S&D cost out distributed with sales don't expect any significant currency impact on the ratio.

Thank you very much Jesper. Could you please educate us on how do this price protection schemes work in the US to what extent has it influenced us in 2014 or what are your expectations going forward?

Allow me, this is slightly long and for just to the extreme mechanism. So price protection mechanism in contracting in the US -whereby you either on a one year basis or on a several year basis correspondent to the contract you might have with the PBM go in and I believe that you will not have a net price increase over and above a certain percentage threshold. So if we take an example of an 8% for instance and that means that if prices in calendar year if it's a one year price protection you have go above 8% you only get the 8% net in pricing effect. Then if you have a contract over several years it might be that you have a cumulative price protection of 8% per year over a period and then so if you list price increases are above that level you get the same situation over a number of years. When you want to analyze the detail, the effects of this it's quite complex because you need then to compare to what price protection situation a year ago compared to how it is now and at what time of the calendar year where the price increases actually execute. So it gets very detailed when you want to get to the granularity of how to analyze this. But overall, what we can say is that longer contracts with price protection will have a tendency to lead to lower net price increases but also more stability. Because often when you renegotiate your contracts, your gross rebate gets pushed up. So in a way there is a tradeoff between having longer contracts with the price protection to having very short contracts maybe without price protection but where the rebate in demand might go up year by year. So in the future we expect to see both types of contracts short, long with and without price protection. And it's all a part of you could say the wheeling and dealing about net pricing. Lars Rebien Sørensen: So it's basically a reflection of the competitive environment in the given segment that you're contracting on.

Yes and then there can be tactical considerations for the PBMs which means that they are more sort of in favor of a certain set up but of course at the end of the day what matters is the net price. Lars Rebien Sørensen: And then also the length of these price protection contract also is influenced by the advent of new products into the marketplace in the coming years.

It would be tactical considerations for the manufacturer, tactical considerations for the PBMs who decide on whether they would like to have a long or a short contract. Lars Rebien Sørensen: Thank you very much. Excellent. Next question please.

Our next question comes from Sachin Jain of Bank of America.

Hi Sachin Jain from Bank of America, two questions. Firstly on DEVOTE just wondered Mads if there is real life CV event date from launch territories that you could potentially use the supplement to DEVOTE interim I know that's not on obviously controlled data. Wonder if I could help and if any color in the number of events that could represent. Second question on the GLP-1 contracting market, question on Trulicity note that’s got our position on the Express Scripts strips national formulary so I think one of the contracts you excluded from and does that positioning give you any color on how aggressive linear going to be with the rebating strategy there. Thank you. Lars Rebien Sørensen: Thank you Sachin. Mads first on potential and CV events from the life use of Tresiba.

Yeah, so Sachin as you're well aware the situation is that there are two components to a potential NDA Class II resubmission. One component is the DEVOTE data per se, the interim analysis that includes the maintenance and the few other endpoint so to speak agreed upon with agency. And then the rest and the rest is a completely standard update including an analysis including also a meter analysis of all the existing fees [indiscernible] trials and that's more than 20 that have been entertained by the company and also investigations in overall pharmacovigilance systems that are in place for the drug when that being said even though we have more than 100,000 patients in Japan and this year may have 100,000 patients also in Europe. It is still so that in the big broad context that pharmacovigilance real world evidence database so to speak is still relatively loosely developed because it is early days. We are not seeing any signs or signals neither in the pharmacovigilance systems nor in this 3P analysis that changed our clear view that Tresiba is safe as other insulins but it is the DEVOTE data that ultimately as you know will be getting for what will happen later this half.

And then thank you very much and then go onto GLP-1 solicity gaining access to ESI how do we see that is, is that sort of a sign of progression on the part in Eli Lily or how should we [indiscernible] this.

I think we should be careful with how we interpret how competition does but we can of course conclude Trulicity has been launched and has open access on the several plans and has a least price which is a very comparable to the least price of Victoza and has a slightly less effect on weight than we see with Victoza. But that being said I would rather comment on how we see the market, we think that there should be three choice among doctors and patients in the GLP-1 space. So our contract and strategy is to try not to go for exclusives but to have several products listed so that there is a choice for the patient and healthcare professionals. Lars Rebien Sørensen: Thank you very much. Next question please.

Our next question is from Richard Vosser of JP Morgan.

Hi thanks for taking my question. First question just going back to DEVOTE, I noted your comments on the IIIb analysis just wondering if you can give just a little bit of granularity on the hazard ratio there whether it’s an improvement on the one on the MACE analysis strict MACE analysis, the FDA did back in 2012 which I think got to about 1.3 on one of their analysis whether the hazard ratio you’re seeing is improving. Second question just on the oral GLP-1 could you talk through your thoughts on the product 9924 in phase II given the discontinuation of the IIa product and obviously there are different carrier mechanism, different oral GLP-1 included so just wondering what do you think these results more related to the carrier mechanism or the GLP-1 as in the discontinuation? And finally if I could just link to that whether what the thought process is behind staffing a PK trial with unmet result with the phase II product as well? Thanks very much. Lars Rebien Sørensen: Thank you very much Richard. DEVOTE, Mads is it on hazard ratios?

Okay. I’ll see if I can show my way to all of this. In terms of what does that mean the IIIb program if anything I would say Richard we had seen a regression towards the means so to speak, i.e. not any stronger deviations from hazard ratio of 1.0 so there’s no signals of any kind in what we are seeing in the ongoing 3D program at all if that’s what you’re meaning at. Now to my mind, that neither did we see that in the pre-specified analysis in the BEGIN trials because as you recall we have events rates of 1.44 and 1.48 it is only when you start kind of massaging the data that you can see outlier findings so I think it’s all in the DEVOTE data and we will be much wiser either this year or next year, so that’s on the DEVOTE. Then should I go on to all. Lars Rebien Sørensen: Yeah why don’t you go on with all of this just sort of characterize the difference between the one that was discontinued and the one which we are still continuing.

Yeah so the one the OG217GT that was as you correctly stated with the genetic carrier [ph] and the genetic carrier [ph] is noted for its predominantly paracellular optic mechanism by reversible loosening of the tight junctions between the enterocytes [ph] to be less specific. Now that was well for insulin but it seems less well for GLP-1 and if you ask me why I cannot give an answer. But the short factor is that exposure for this particular molecules semaglutide is a distinctive data in the case of the SNAC enhancer which predominantly uses a transcellular optic mechanism and that also means that when we see data from the phase II we have to look at many things. We have to look at how good other data at which dose were the data obtained, was the population distributed in a normal distribution manner in terms of efficacy also in terms of the expected safety findings so the GI and so on and then overall basically it all pause down to one thing can we in a way where we can claim that all semaglutide will actually match an injectable counterpart in terms of clinical safety and efficacy in a way that is commercially viable for the company to develop in phase III. If you can say yes to all of that then the company can in the second half look into phase III stop go decisions and that is also why this is truly new territory there are many more analysis to be done in such a program than in a straight forward injectable once we get GLP-1 program so it will be very exciting. Lars Rebien Sørensen: Thank you very much Mads.

One more - you had I think you asked about [indiscernible] when you do clean farm with this kind of agents we have to investigate is the acidity of the stomach by any means and measures indicative of greater or lesser absorption of the active [indiscernible] semaglutide so by using the product [indiscernible] you can investigate whether or not this interference in people who have gastric problems and so far it looks as it does not. Lars Rebien Sørensen: So thank you Mads, I got a lecture on para versus transcellular absorption. Thank you very much for that. We will move readily on. Next question please.

Our next question today comes from Michael Leuchten of Barclays.

Thank you two questions from me please. One, a large question on the Xultophy please now that you have the approval in Switzerland I just wondered if you can offer an update on how you thinking about positioning the product within this space? And then secondly, so Mads just going back to DEVOTE how do you think about the number of duration so at a number of events that is driving hazard ratio versus duration of exposure one of the concerns in the market seem to be that even though you may have a hazard ratio one could argue that the duration on average isn’t long enough to really allow you to have a view at that point in time if you could offer your thoughts that would be great? Lars Rebien Sørensen: Thank you very much, Kåre positioning of Xultophy in Switzerland and then general comment on how you see that position going forward and then Mads. Kåre Schultz: Xultophy of course combines the fantastic chooser [ph] with the strong effect of Tresiba and the way we are positioning it globally is for all those millions of patients more alike that are currently on a basal only regimen but that have inadequate control of their glucose. So basically we have millions of people who are basal insulin analogues but their A1c numbers are failing to reach target and that is the target we go. Lars Rebien Sørensen: So that is in a way safe intensification of therapy. Kåre Schultz: It's safe it’s convenient and effective. Lars Rebien Sørensen: And effective on. Good excellent. Mads, DEVOTE.

Yes well obviously this question adds to in which way do you put together the amount of MACE events either lower grade and long exposure or higher grade and the low exposure also might be between and this has obviously being discussed with the agency and the way the conduct of this trial including the conduct up to the interim analysis that is as you can imagine ongoing in the very near future that is completely compatible with what we have discussed with the FD there is no demand as to so and so mainly have to speak for so and so long. That however you are right in stating it's typically a phenomenon that will be associated with the fine outcome of the trial where for instance in the leader trial for safety reasons the European Agency actually demanded a minimum of 3.5 years of exposure in each individual cardiovascular patient in that trial but for the interim analysis.

If I could understand your position as that it should be a free choice of doctor if you see the marketing material are they arguing for the Trulicity should be the first product for everybody or is it more of a peak of daily or weekly and then we’ve got the best weekly essentially are they looking for co-positioning and position themselves again by Durian are they looking are they going after Victoza? Second, I was a little bit surprise by the moderate but yes interesting success of Tanzam [ph] you get through a couple of months with your points in the U.S. with somewhat of a lower efficacy product. I was wondering if you can discuss is there a tier of clients that would prefer or patients that would prefer a low efficacy low side effect product or you’re seeing this primarily being a natural between you and Lily? Lars Rebien Sørensen: Thank you very much. Kåre I think I guess you. Yes the positioning of Trulicity and its effect on the evolution of the one in United States and then whether or not there is sort of a low effective low cost segment of the market. Kåre Schultz: Yes if we start with - then of course the details about that products positioning you should really address that question with our competitor and not with us but the way we see it there will be a strong part of the market which would prefer once daily and Novo for sure also be a signal market that will prefer once weekly. And it is unlikely that one of the two regimens will sort of take the whole market which connected - analyzing the split that has been seen with the first GLP-1 that hit the market, GLP-1 look alike and follow on by Durian. So I think it’s here to say that we will not be one who want to take it all. If we then what seems to matter in our research in the market then it’s quite clear that any injectable diabetes medication it is efficacy that matters. Efficacy that’s rule number one, two and three and then is of course efficacy both of glucose and it could be efficacy on other parameters for instance weight and therefore I find it very unlikely that there is an appetite for sort of a low efficacy discount product. However we’ve confidence coming out of products that had sort of maybe a slide each on one part of the efficacy slide, each on another part of efficacy. We do hope to see expansion of the total market because if you look at the patient numbers than the GLP-1 market in the U.S. is very small patient numbers compared to the superior efficacy that GLP-1 such has. Lars Rebien Sørensen: Thank you very much Kåre. The next question please.

We’ll just move to our next question from David Evans of UBS.

Thank you so much. I have three questions please, one about U.S. net pricing and one about Saxenda so Saxenda pricing on my estimates Novolog is - low-single digit net price increases in the US. NovoMix has roughly flattened that price well Levemir seeing net pricing well into the teens. Is this fair to assume that US net price may actually be negative and Novolog and Mix for this year? And then for Levemir do you still seem to expect net positive price plus is that will also fair but could you give us a sense of this is likely to be in the low or high-single digit range. And just given if we strip out the R&D charge from Q3 operating profit growth for this year for this year around 8%. Will pricing get back to in 2016 so how get you back towards your target is 15% operating profit growth. And then secondly on the Saxenda given that US label doesn't allow it's used by patients from insulin, I mean does that impact to your target population and is that something you believe you can change in the future or is that just fundamentally how it is. Thanks. Lars Rebien Sørensen: Thank you very much. Kåre a comment on the net pricing development I mean we have to careful whether we talk about 2014 and 2015 because there are certainly changes expected from '14 to '15 and then there was a comment on whether or not we're anticipating price picture changing in '16 as a way of getting back to double digit growth. So a whole lot of things. Kåre Schultz: Of course a multi-faceted complicated topic, but if you look at '14 it's quite clear anybody can do the math that we have seen net price increases of all three insulin analogues or the pre-novel insulins that are in US market. If you look at '15 we also expect net price increases we do not expect double digit price increases we expect single digit price increases net on all three modern insulins. The details about how playout for each of them is of course down to details about contracting this price increases timing and so on. We don't expect to see any dramatic change in the pattern compared to what we have seen in other years other than the level will probably be slightly lower than what we have seen in '14. We don't have any major contract changes the way we had last year. So we expect a more even and calm development you could say from a contracting pricing and rebating point of view. With regards to '16, and we don't have an anticipation at this point in time about how we look. We will have to comment on that once we get closer to 2016. Lars Rebien Sørensen: Yeah this is Lars Rebien here. I mean anything 2016 looks a month a time where there will be more products on the market if we are to project and to new entrance. So that if everything else being equal that would go for more competition in the field. Do you have any comment Jesper?

Yeah in terms of the long-term financial targets which you also brought up with the, I think the comment from our side on the longer term horizon is a precondition for longer term achieving the '15 operating profit growth target will be that we get our top-line growth up to the double digit level we historically operated on. And at precondition for achieving that will clearly be having access in the US market with Tresiba and the portfolio of Degludec products that goes with Tresiba. Lars Rebien Sørensen: Yeah and then Mads Saxenda will it have any implications that's currently it is not indicated for insulin users.

Yeah that is the same situation as when we were developing Victoza both in Europe and the United States, when you don't have a - you can say statistically reliable database of safety and efficacy when combining to agents together. Then obviously you will not get that as an indication and our scale of program has obviously not investigated to any significant extent co-use of 3 milligrams of Lyrex with insulin and that is why it's not indicated it does indicated for use in people with diabetes but not use those well in insulin therapy. That would be a management goal whether we want to investigate that at some point in time but it would not be highest on the list of priorities. Lars Rebien Sørensen: Thank you very much. Next question please.

The next question comes from Simon Baker of Exane BNP Paribas.

Thanks for taking my questions. Firstly you mentioned hopefully that the impacted currency only S&D ratio was minimal. Perhaps you could give us the impact on the R&D ratio. And secondly I wondered if you could remind us the proportion of revenues in non-hedged currencies. And also on the point of hedging if you have any hedging for kroner or euro. Thanks so much. Lars Rebien Sørensen: Thank you very much. I guess that [indiscernible].

Yeah the currency impact on the other cost line and I think it's a relevant question to have or not. In these volatile surroundings I think the first one just to give you is the gross margin and with the current rates and with the half of portions of our sales that's coming from the currencies that have appreciated and the high production base in Denmark. I would anticipate approximately 100 basis point data we powered across margin than on the line gross margin. In terms of the R&D ratio, similar we have a very significant path of the R&D cost base in the Eurozone and hence also here I would anticipate that the R&D ratio which I would forecast in the ballpark of between 14% to 15% local currencies that local reported numbers is probably going to be about 100 basis points data. And then just to round that off in terms of admin ratio that is likely to drop slightly below the 4% mark in local currency and reported because of the weight of the headquarter approximately 20 basis point better in reported service compared to local currency. And then you ask about the proportion of our currencies that - one has and that's about a 25% of the currencies which are not directly hits the actually in the release we given and our view and outline of the currencies that we do hit in the hedging period and the others remained unhedged and that's pretty stable. We don't take out a hedge for the different for the development in the Danish kroner/euro that's generally a very, very stable fixed rate and that we've regard the euro/Danish kroner as our home market and reporting currency. Lars Rebien Sørensen: Thank you very much. Next question please.

Our next question is from Morten McManus [ph] of Credit Suisse.

Hi thank you for taking my questions. Firstly those are very significant FX tailwinds provide any competitive advantage in international tender markets. I'm guessing in the short and mid insulin spaces or should we think if this only the translational impact. And then secondly on the [indiscernible] 500 US sales people are these incrementally or how they come from the Tresiba approval of this previously recruited and are what products so they marketing in the meantime. Thank you. Lars Rebien Sørensen: Yeah Kåre why don't just start off with this agenda especially agents for manning up of that launch and then go onto the discuss a little bit high. You see the tender market given the change in currencies. Kåre Schultz: It's great that for Saxenda we expect to have roughly 500 sales people targeting a relative narrow target group of specialists that are already involving weight management in United States. The majority of these people will be coming from our existing sales force and we will have those people trading and we'll have those people trained and once we launched with the next few months. So that's on the sales force. On the foreign exchange and the effect on tenders then most tender contracts internationally longer standing contracts which gets negotiated over a period of time and where it doesn't have any major impact how the foreign exchange develops and in general we compete on local term so you could say in most markets. Of course it is great that relatively speaking with us having some manufacturing overweight in Denmark that's a slight effect but you should not look that we have manufacturing operations all over the world such as Brazil, China, France, US and so on. So no major thing. Lars Rebien Sørensen: Thank you Kåre. Next question please.

The next question comes from Michael Novod of Nordea.

It’s Michael Novod from Nordea. Just two questions. First of all regarding the GLP-1 mark, we've seen there is more rebound, is that something you see sustainable and do you see this coming from mainly more players promoting GLP-1 or is it lag of noise around side effects maybe a bit more flavor on that. And then secondly to DEVOTE study given the fact that you see it enrolling or both accruing and completing faster than expected can you perhaps elaborate a bit on the risk for the state saying okay in just a year now from or year and a half for completion let's just see the final data is that a risk in the discussion with DFT and do you see that this speculation? Lars Rebien Sørensen: Thank you very much Michael. GLP-1 market development call you've already spoken a little bit to it and also during our various presentations today thereabout two different components to this growth and how do you see that is it sustainable?

And I think it is sustainable I think the two components are the ones you mentioned, one is the sort reduced focus on this I think not real safety risk related to pancreatic cancer that has refute by the relevant authorities and then the fact that more players are entering the GLP-1 field and it's like mix in hot and cold water you can't really say whether it's one or the other effect that is leading to this slightly improved growth label in the GLP-1 to market. I think it’s sustainable because I think the newcomers are they to stay so they will keep on promoting and I think we have sort of the refute the pancreatic cancer safety story so hopefully we will see a label of growth GLP-1 market. This year that's better than last year however we won't get back to of course the percentage growth levels that we had in the beginning. Lars Rebien Sørensen: Thank you very much. And then on to across the highly speculative to what extent comorbidity that ESA given the quick recruitment and quick accrual events will say why we don’t wait for the completion of the trial.

So I will start by quoting my boss as you also Michael that is pure speculation nobody can't have any guesses on that. I have to remind everybody however that the prudent drug administration is a science based agency and that implies that they should be totally able to disconnect any time cause relationship between these things and they should look at the data and I would expect that they will look at the data and the discussion with this small unblinded theme and that will form the basis for a potential B submission and the action thereupon. So I would not expect any connection between these two things but again it's pure speculation. Lars Rebien Sørensen: Thank you very much. We would like to have the final question please.

Our final question today comes from Philippe Lanone of Natixis.

Good afternoon gentlemen. One quick question on the hedging, the other 5 billion loss on hedging in 15 but if the counter level we made it what they are at the end of January am I correct in understanding that that will mean that there is a zero in 2016 apart from maybe one or two hedging and the second question is on the promotion in the long acting insulin in the US apparently Sanofi is trying to catch up in terms of fueling some more promotion. What will be your position in 15, will you increase again in your promotion which has been very successful last year and maybe one last on for Mads, the magnitude of obesity and at the slightly hope to have the announcement of phase 2 already, so is it still in the cards? Lars Rebien Sørensen: Thank you very much. First on the hedging and with that and it's correct to assume that if we have the continuation of the current rate that that would be no impact from 16 and onwards.

As you can see from the company announcement most of the currencies are hedged to 11 month period so that means that the full hedging effect will get 2015, the only deviating currency is the Japanese yen and that has actually appreciated a little bit deeper but for all practical purposes you are correct in your statement that basically the full hedging effect will get 2015 and as it looks now with the current rates we basically stand at zero in effect in 2016. Lars Rebien Sørensen: Kåre there will be a promotion in United States in the basal segment are we seeing any changes in the competitive pressure and promotion activities. Kåre Schultz: We are not seeing any significant changes in promotional landscape Sanofi is obviously promoting lances heavily as they have been doing for the past several years we are promoting heavily in the marketplace and we intend to continue to do so. Lars Rebien Sørensen: And Mads any comments on semaglutide for obesity.

Yes, only I can confirm your notion that based on what we have seen i.e. potential for more efficacy with semaglutide compared to liraglutide at a higher doses the management does intent to seek to explore also that indication for same. Lars Rebien Sørensen: And with that ladies and gentlemen, we thank you for your attention and keen interest in Novo Nordisk full result for 2014 and outlook for 15 and we are looking forward to revert hopefully exciting news shortly.

That will conclude today's conference call. Thank you for your participation ladies and gentlemen you may now disconnect.