Novo Nordisk Pharmatech A/S

Ledelsesberetning

Our purpose – enabling better medicines, enabling better lives has for years centred around our commitment to bring forward pharmaceutical materials that enable our customers to produce better medicines. In 2024, we marked our 75th anniversary, an important milestone in our company’s history.What started as a small chemistry factory in Køge has become a valuable subsidiary of Novo Nordisk – enabling some of the greatest pharmaceutical discoveries and treatments of all time to reach millions of patients around the world.We stand on a long history of excellent quality, expertise within purification resins, process enzymes, quaternary ammonium compounds (Quats), and recombinant technical insulin for cell culture media.Over the past two years, we have experienced significant sales growth, driven by increased demands from our valued customers. In line with our strategic growth initiatives, 2024 also witnessed the announcement of our groundbreaking investment of 1.5 billion DKK in a new facility at Køge North – the largest single investment ever made by Novo Nordisk Pharmatech. Furthermore, 2024 was the third consecutive year in which we ®launched a new product, namely TrypsiNNex – a new recombi-nant enzyme that represents part of our growth strategy in the specialty enzymes sector for biopharmaceutical manufacturing.In 2024, we achieved a revenue growth of 9% compared to 2023, largely driven by silica gels, enzymes, and our Quats portfolio. The technical insulin business exhibited more Ulla Grove Krogsgaard ThomsenCEONovo Nordisk Pharmatech A/Svolatility than anticipated, attributed to patent expirations on customers’ originator drugs. Nonetheless, we successfully acquired new customers for technical insulin, which will provide additional future revenue.As planned, we increased the production capacity for silica gels and successfully met increased demands of speciality enzymes. Our Køge North facility will further add capacity in terms of silica gel manufacturing, quality control as well as warehousing. The project is progressing as scheduled, and we will start production at the new site in 2027. Our pipeline of late-stage enzyme projects has progressed ®well, with TrypsiNNex launch in October 2024. Additionally, we have further developed and diversified our early project pipeline for manufacturing of materials for regenerative medicines. In line with our new strategy, we have deprioritised gene therapy efforts and are now focusing on cell-based therapies, as well as manufacturing of oligo nucleotides. In 2024, we initiated a new phase of our sustainability journey by conducting a supplemental assessment to our parent company’s Double Materiality Assessment. This assessment has provided us with insights on which sustainability matters are most significant to us, guiding us in determining our strategic focus. In our pursuit of ensuring environmental safety, in 2024 we have proactively worked on climate adaptation by ensuring we can withstand extreme weather events.In 2024 we welcomed 105 new colleagues, supporting our ongoing growth. It is essential that our workplace expands sustainably as we grow. Our primary focus remains on ensuring a healthy, safe, diverse, and inclusive environment, with attention on our employees. We are committed to a proactive approach, with prevention and continuous improvement as the cornerstones of our health and safety management system and company culture.Our investments in robust and compliant IT infrastructure and solutions continues. Cybersecurity and physical security have been further strengthened to counter future threats. Prepara-tions are on track for the implementation of NIS2 EU legislation to Danish national law which will come into effect in July 2025. This focus will continue as a high priority to safeguard our ability to deliver products to our customers. In pursuit of enhancing operational robustness, cost control, and capacity expansion throughout the value chain, we con-tinue to initiate and implement digitalisation initiatives. As part of this strategic direction, we recently introduced our Business and Manufacturing Intelligence data platform. We never compromise on quality, and it is fundamental to the way we work. Our products have a direct or indirect impact on the quality of pharmaceutical products administered to millions of patients. Our quality performance remains at a high level, as testified by the results of more than 23 quality audits and one inspection from the Danish Medical Agency hosted in 2024. We constantly seek to improve our quality management system through better processes, training and operating procedures. We strive to have a scalable system in place that supports fast progress of our pipeline and projects without compromising product quality. Our strategic endeavours have been further validated by the launch of a new product, enhanced stability in production, and increased production capacity. The result is an overall growth of 9%. Due to investments in a robust organisation preparing for our future growth, the operating profit ended up at DKK 73 million or a reduction of 19% compared to 2023.I want to acknowledge and thank the entire Novo Nordisk Pharmatech team for their focused dedication and commitment throughout 2024. It is through our collective hard work and engagement that we continue to excel across all aspects of our operations, continuously pursuing our purpose of enabling better medicines, enabling better lives.9%higher revenue than 2023956 DKK million in net sales517 Employees worldwide73 DKK million in operating profit39 Countries with customers whom we export to53% Women at all leadership levels+200% Investment in property, plant and equipmentNovo Nordisk Pharmatech A/S at a glanceFinancial review 2024Sales developmentSales grew by 9% from DKK 880 million in 2023 to DKK 956 million in 2024, primarily driven by increased demand for silica gels and enzymes. Total sales 2020-2024 Sales development DKK millionDKK million1,00095680088060066861959840020002020 2021 2022 2023 2024The main drivers of the development from 2023 to 2024 were: • Sales of technical insulin was on par with 2023.• Sales of silica gels increased by 31% versus 2023 as the demand continued to increase.• Enzymes sales increased by 10% versus 2023. The product mix and volumes demand led to the higher sales.• Sales of Quats increased by 9% versus 2023 due to increased demand for Cetrimide and CTAB.• Sales of microscopy analyses increased by 9% due to an increased number of analyses conducted during 2023.Sales by product group 2023 Sales by product group 2023Sales by product group 20233%3%12%12%36%36%22%22%27%27%Sales by product group 2024Sales by product group 2024Sales by product group 20243%3%12%12%33%33%22%22%30%30% Insulin Silica Gels Enzymes Quats MicroanalysisCostCostCostCostDKK millionDKK millionDKK millionDKK million1,0001,0001,0001,0004848484842424242800800800800330330330330313131312972972972976006006006002828282828282828193193193193400400400400175175175175184184184184505505505505451451451451200200200200311311311311332332332332260260260260000020202020202020202021202120212021202220222022202220232023202320232024202420242024Total cost Total cost increased in 2024, primarily driven by rising raw material costs due to the growth in silica gels and enzyme production volumes. Additionally, there was an increase in capacity costs, linked to the organisational expansion to sup-port current demand increase and the strategy to ensure fu-ture product launches. Average number of FTEsAverage number of FTEsAverage number of FTEsAverage number of FTEsFTEsFTEsFTEsFTEs50050050050046146146146140040040040030030030030033633633633624424424424420020020020021221221221219719719719710010010010000002020202020202020202120212021202120222022202220222023 2023 20232023 2024202420242024The average number of employees was 461 in 2024, compared to 336 in 2023. The consistent growth in the number of employees over the last 5 years reflects a general scaling of the organisation to support current demand increase as well as expected future business growth.Investments in property, plant and equipmentInvestments in property, plant and equipmentInvestments in property, plant and equipmentInvestments in property, plant and equipmentInvestment costsInvestment costsInvestment costsInvestment costsDKK millionDKK millionDKK millionDKK millionD5005005005002440440440440400400400400130030030030012002002002002192192192191001001001001061061061067171717153535353000020242024202420202020202020202021202120212021202220222022202220232023202320232024Investment in property, plant, and equipment for 2024 was DKK 440 million compared to DKK 219 million in 2023. Investment costs were primarily spent on establishing the new Silica facility in Køge North. Investments were also made in site protection, site expansion, our facilities, and IT infrastructure to accommodate the increased number of full-time employees and ensure IT security. KK million %KK million %DKK million %DKK million%00020020025252525202020200501501501541541541541471471471471515151500010010010101010909090900505050737373735555424242420000000020202020202020202021202120212021202220222022202220232023202320232024202420242024Net operating profit (EBIT) for 2024 was DKK 73 million, decreasing from DKK 90 million in 2023. The decline in net operating profit is primarily driven by lower average sales prices and higher unit costs for Quats and insulin. Further-more, the total profit of the year is impacted by our continuous focus on building a robust organisation and increasing capacity to support the future growth of the company. The decrease in net operation profit in 2022 was mainly driven by increased insulin raw material prices.Key figures2020 2021 2022 2023 2024Result, DKK 1,000Revenue 667,729 619,083 598,265 880,400 956,033Gross profit/loss 145,866 150,859 22,300 51,177 17,147Profit/loss before financial income and expenses 153,939 147,120 41,876 90,301 73,479Net financials (7,770) (514) 7,235 8,232 3,649Net profit/loss for the year 114,915 113,748 39,307 77,247 60,619BalanceBalance sheet total 745,525 639,924 966,914 1,266,562 1,962,701Equity 606,434 520,247 689,619 766,912 1,327,620Cash FlowInvestments in property, plant and equipment 71,171 53,477 105,684 218,933 439,944Average number of employees 197 212 244 336 461 Ratios, %1Gross margin 21.8% 24.4% 3.7% 5.8% 1.8% 2Profit margin 23.1% 23.8% 7.0% 10.3% 7.7% 3Return on asset 20.6% 23.0% 4.3% 7.1% 3.7% 4Solvency ratio 81.3% 81.3% 71.3% 60.6% 67.6% 5Return on equity 17.7% 20.2% 6.5% 10.6% 5.8% Key figures are in accordance with The Danish Society of Financial Analysts’ guidance from 2016.1. Gross profit as a percentage of sales (Gross profit / Sales).2. Profit before financial income and expenses as a percentage of sales (Profit before financial income and expenses / Sales).3. Profit before financial income and expenses as a percentage of total assets (Profit/loss before financial income and expenses / Balance sheet total).4. Equity on the balance sheet date as a percentage of total assets (Equity / Balance sheet total).5. Net profit for the year as a percentage of the shareholders’ equity (average) (Net profit / ((Equity + Equity last year) / 2)).We are on a growth trajectory, and we know that over the coming years the primary drivers of growth will come from our purification resins and speciality enzymes. We are committed in our ambition to triple our sales by 2034. This objective depends on our commitment to continuously develop innovative products, build adequate manufacturing capacity and maintain our position as a reliable supplier for our customers.Early in 2025, we rolled out our new strategy, Enabling Better Growth. This strategy is structured around our core capabilities that are aligned with our current product portfolio, and builds on several growth paths. Focusing on what we are good at, expanding our market to new customers, developing adjacent competencies or exploring new product frontiers. Strategy In 2025, the expectation is to grow revenue by 10-15%, and we see increasing demands on several products. We remain committed to expanding our capacity, thereby enabling our customers to cater to patients’ needs. Our Greenfield enginee- ring project at Køge Nord to expand our production capacity is progressing as scheduled, and we anticipate starting production at the new site in 2027. The market for technical insulin is undergoing changes as origi-nator drugs reach patent expiration. We continue to have good momentum with some of our existing customers, while we are also seeking broader customer segments, including regenera-tive medicines opportunities. The Quats pharmaceutical market is increasing slightly more, and we expect to grow within the BKC portfolio, for example through applications within topical acne treatment. In addition, it remains important for us to further strengthen our partnerships with contract manufacturing organisations, media manufacturers, and biomanufacturers of therapeutic proteins or regenerative medicines, as we observe continued customer interest in high-quality, animal-free, and reliable ingredients.®Following the launch of our new speciality enzyme, TrypsiNNex,we anticipate generating data on this product in collaboration with various customers throughout the year. In parallel, we are advancing our other innovative projects within the fields of regenerative medicines and biopharmaceutical manufacturing. In Research & Development, we are set to initiate validation of the production process of a speciality enzyme for stem cell manufacturing, anticipated to be completed by year-end. Additionally, we are in the process of developing a novel affinity resin, which will be deployed at our pilot facility. As part of this effort, our affinity resin pilot will undergo enhancements to evolve into a multi-product facility. In alignment with our new strategy, Enabling Better Growth, we are dedicated to refining our portfolio of research projects aimed at providing innovative solutions for our customers to produce regenerative medicines, with focus on stem cells and oligo-RNA therapeutics.To support our strategic outlook, it is essential to have a dedicated and skilled workforce with the right competencies. We will continue investing in our current and future employees, developing their professional growth to foster an inclusive, positive, and diverse work environment. Prioritising the well- being and safety of our employees will continue to stand as a fundamental focus. Our commitment is to cultivate an environ-ment free from accidents and work-related absences, ensuring the long-term well-being of our employees.In our pursuit of advancing sustainability, our focus in 2025 will be on enhancing the data foundation across various sustainability domains. Our goal is to establish a robust data framework for each sustainability topic, emphasising the setting of ambitious targets and the measurement of performance initiatives to a more scientific level, employing a consistent science-based methodology. By doing so, we will be better equipped to initiate appropriate actions and accurately measure our progress and advancements in the sustainability area.Throughout the year 2025, we are dedicated to sharpening our pipeline in accordance with our updated strategy and sup-porting our customers by introducing innovative products to the market. As a scientific partner, Novo Nordisk Pharmatech is a committed front-runner in the development of innovative media components, purification resins, speciality enzymes, and supporting materials for oligo-RNA manufacturing. We will ensure the consistent quality and dependable delivery of our products by enhancing and continuously expanding our capaci-ty in a sustainable manner.Our growth strategy: Enabling better growthOur ambition is to grow sales by a factor of three by 2034 and to secure continued value for Novo Nordisk.Our growth is structured around our core capabilities. They derive from our current products and are within solid phase synthesis of customised purification resins, purification of process enzymes, organic synthesis of Quats, and sales and distribution of insulin for cell expression. Due to our history of excellent quality, we focus on pharmaceutical applications where quality is what makes us unique, and we will leverage our historical relationship with Novo Nordisk as a competitive advantage.The intention of our strategy is to strengthen our engagement with Novo Nordisk, to define areas where to develop new and innovative products, as well as outlining which key initiatives we will prioritise to succeed with our growth ambition.Growth through core capabilitiesWe have defined five areas that are crucial to reach our growth ambition. The first three areas are the basis for our current growth and the two following areas are essential to keep us growing in the future.Drive our insulin & Quats business to fund future growthSince our inception, we have been dedi-cated to building on our core competen-cy in Quats. Our focus is on always ensuring high batch-to-batch consistency according to regulations. Over the com-ing years we will maintain our leadership position within insulin and Quats and grow in new customer segments.Prioritise silica; this is our reason for beingSilica is the primary driver of growth over the coming years and also supports Novo Nordisk’ steadily growing franchise. Over the coming years we will establish a new greenfield facility for manufacturing of Silica (KNSF).Innovate in regenerative medicines starting with focus on stem cellsWe are committed to be a front-runner in developing innovative enzymes, reagents and active pharmaceutical ingredients. Over the coming years we will ensure successful launches for our new process enzymes and build a customer base within regenerative medicine.Focus on being a proactive reliable supplier and partnerWe are consistently delivering superior product performance returning high yield and stability. Over the coming years we will develop an engagement model with Novo Nordisk so we can proactively and reliably support their API pipeline with current and new products.Explore opportunities within RNA oligos through partnership led innovationOur competencies within particle size understanding from working with silica and solid phase synthesis, gives us entry into the field of RNA oligo synthesis and purification.Over the coming years we will explore resins for RNA oligo synthesis to evaluate how we can be a leader in this field.Board of Directors and CEOJean Fabian JeldorfChairman of the board Senior Vice President, Supply Chain and Business DevelopmentNovo Nordisk A/SJulie AunbirkVice President, Process& Facility DesignNNE A/STue MicheelsenPresident of North America and Head of Consumer Health, Human Health BiosolutionsNovonesis A/SJacob Sten PetersenSenior Vice President, Head of Global Nucleic Acid TherapiesNovo Nordisk A/SChristian Brøgger Stolberg Employee representative Engineering Responsible Novo Nordisk Pharmatech A/S Joachim Juel HagemeisterEmployee representative Process Responsible Supporter Novo Nordisk Pharmatech A/SUlla Grove Krogsgaard ThomsenCEONovo Nordisk Pharmatech A/SNovo Nordisk Pharmatech is a leading global supplier of high-quality ingredients for the biopharmaceutical and pharmaceutical industries. The company has attracted an extensive roster of leading pharmaceutical companies through unsurpassed product quality, manufacturing and quality control, regulatory documentation, precision delivery and a comprehensive risk mitigation strategy.For more information, please visit novonordiskpharmatech.com