Investor Presentaiton
Novo Nordisk Annual Report 2023
5.2 Commitments
Contractual obligations not recognised in the balance sheet
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
78
Contractual obligations
Research and development obligations include contingent payments related to
achieving development milestones. Such amounts entail uncertainties in relation
to the period in which payments are due because a proportion of the obligations
are dependent on milestone achievements. Exercise fees and subsequent milestone
payments under in-licensing option agreements are excluded, as Novo Nordisk is
not contractually obligated to make such payments. Commercial product launch
milestones include contingent payments solely related to achievement of a commer-
cial product launch following regulatory approval. The increase in research and
development obligation is driven by the general increase in business activities.
Commercial milestones, royalties and other payments based on a percentage of sales
generated from sale of goods following marketing approval are excluded from the
contractual commitments analysis because of their contingent nature, related to
future sales.
The purchase obligations related to investments in property, plant and equipment
primarily relates to production capacity expansion projects. Novo Nordisk expects
to fund these commitments with existing cash and cash flow from operations.
Other purchase commitments mainly consist of commitments related to promotional
and media activities, professional and consulting activities and strategic sourcing
contracts.
The contractual obligations not recognised in the balance sheet represent contractual
payments and are not discounted and are not risk-adjusted.
Other guarantees amount to DKK 1,878 million (DKK 1,222 million in 2022). Other
guarantees primarily relate to performance guarantees issued by Novo Nordisk.
5.3 Acquisition of businesses
Fair value recognised at date of acquisition
DKK million
Intellectual property rights
Other intangible assets
Financial assets
Marketable securities
2022
Forma Therapeutics
5,766
492
77
1,470
Cash
1,027
Deferred tax assets (liabilities), net
(709)
(21)
8,102
Other net assets
Net identifiable assets acquired
Goodwill
Consideration transferred
Cash acquired
Cash used for acquisition of businesses
Business combinations in 2023
8,102
(1,027)
7,075
No transactions completed during 2023 were classified as acquisitions of businesses.
Business combinations in 2022
On 14 October 2022, Novo Nordisk acquired all outstanding shares of the publicly held
US company Forma Therapeutics Holdings, Inc. at a price of USD 20 per share via a
cash tender offer, equal to a total purchase price of DKK 8,102 million. At end of 2022,
the initial accounting for goodwill, intellectual property rights, other intangible assets
and deferred tax assets and liabilities remained provisional. The valuation of these
were finalised in 2023 with the result that net deferred tax liabilities were reduced
retrospectively by DKK 524 million to a total of DKK 709 million. The reduction was
offset by a corresponding amount to goodwill. The valuation of intellectual property
rights and other intangible assets remain unchanged.
DKK million (undiscounted)
2023
Current
Non-
current
Total
Leases¹
144
Research and development obligations
8,678
2,053
13,235
2,197
21,913
Research and development - potential
milestone payments²
1,234
27,311
28,545
Commercial product launch - potential
milestone payments²
12,952
12,952
Purchase obligations relating to investments
in property, plant and equipment
4,222
1,693
5,915
Purchase obligations relating to contract
manufacturers
6,315
Other purchase obligations
7,151
26,792
5,888
33,107
13,039
Total obligations not recognised in the
balance sheet
27,744
89,924
117,668
2022
Leases¹
205
Research and development obligations
5,988
1,641
7,582
1,846
13,570
Other guarantees
Research and development - potential
milestone payments²
376
5,011
5,387
Commercial product launch - potential
milestone payments²
7,598
7,598
Purchase obligations relating to investments
in property, plant and equipment
1,696
1,427
3,123
Purchase obligations relating to contract
manufacturers
3,537
9,825
13,362
Other purchase obligations
15,225
4,541
19,766
Total obligations not recognised in the
balance sheet
27,027
37,625
64,652
1. Predominantly relates to estimated variable property taxes, leases committed but not yet commenced and
low value leases. 2. Potential milestone payments are associated with uncertainty because they are linked to
successful achievements in research activities.View entire presentation