Investor Presentaiton

Novo Nordisk Annual Report 2023 Introducing Novo Nordisk Strategic Aspirations Risks Management Consolidated statements Additional information 62 62 Description of material additions 2023 additions Novo Nordisk acquired Ocedurenone for uncontrolled hypertension with potential application in cardiovascular and kidney disease from KBP Biosciences PTE., Ltd. Ocedurenone is an orally administered, small molecule, non-steroidal mineralocorticoid receptor antagonist (nsMRA) that is currently being examined in the phase 3 trial CLARION-CKD in patients with uncontrolled hypertension and advanced chronic kidney disease (CKD). The transaction has been accounted for as an asset acquisition, with DKK 5,650 million recognised in intellectual property rights. Novo Nordisk acquired Inversago Pharma Inc. and obtained ownership of the development asset INV-202. INV-202, an oral CB1 inverse agonist, is designed to preferentially block the receptor protein CB1, which plays an important role in metabolism and appetite regulation. The transaction has been accounted for as an asset acquisition, with DKK 4,321 million recognised in intellectual property rights. Novo Nordisk acquired Biocorp Production in a transaction accounted for as an asset acquisition with DKK 1,221 million recognised in intellectual property rights. Of the total additions of intangible assets, DKK 500 million relates to internally generated software and other intangibles (DKK 544 million in 2022). 2022 additions Additions from acquisition of businesses relates to Novo Nordisk's acquisition of Forma Therapeutics Holdings, Inc., which primarily includes the lead candidate Etavopivat, which is recognised within intellectual property rights; refer to note 5.3 for details on the business combination. Impairment test Intangible assets other than goodwill In 2023, an impairment loss of DKK 1,796 million (DKK 760 million in 2022) was recognised. The entire DKK 1,796 million (DKK 250 million in 2022) of the impairment was related to the Diabetes and Obesity care segment. DKK 382 million was recognised as a reversal of prior impairment related to Rare disease (DKK 510 million impairment loss in 2022). The entire impairment loss in 2023, including the reversal of prior impairment, was recognised in research and development costs (DKK 760 million in research and development costs in 2022). The impairment was a result of Management's review of expectations related to intellectual property rights not yet in use. No impairment related to marketable products was identified in 2023 or in 2022. Goodwill As of 31 December 2023, goodwill is allocated to the segments Diabetes and Obesity care DKK 4,018 million (DKK 4,154 million in 2022) and Rare Disease DKK 446 million (DKK 461 million in 2022). No impairment of goodwill was recognised in 2023 or 2022 as the annual impairment test showed that the estimated recoverable amount in the forecast period exceeded the carrying amount of the cash-generating units to which goodwill was allocated. Goodwill is monitored for impairment at the operating segment level, which is the lowest level CGU to which consolidated goodwill is allocated and monitored by Management. CGUS are therefore defined as Novo Nordisk's business segments, Diabetes and Obesity care and Rare disease. The recoverable amount is estimated using an income-approach and is based on discounted cash flow projections. The applied post-tax discount rates for Diabetes and Obesity care and Rare diseases are 7.0% (Pre-tax discount rate of 8.3%). Cash flow projections are based on budgets approved by Management. The forecast period for Diabetes and Obesity care, and Rare diseases is 9 years. The discounted cash flow from the budget and forecast period significantly exceeds the carrying amount of goodwill.. The key assumptions and sensitivities are Novo Nordisk's volume market share, growth rates, pricing, development of new markets and the success rate for introducing new products and treatments. Sensitivities are affected by external factors such as market and generic competition, and price regulation. The value assigned to key assumptions reflects past experience adjusted for market specific risks or expected changes. Fair value is determined using largely unobservable inputs. Other intangible assets disclosures Intangible assets with an indefinite useful life and intangible assets not yet available for use amount to DKK 34,012 million (DKK 27,536 million in 2022), primarily intellectual property rights and goodwill. The carrying amount of internally generated intangible assets amounts to DKK 1,277 million at end of 2023 (DKK 1,017 million in 2022). Intellectual property rights include DKK 5,650 million related to Ocedurenone (acquired in 2023), DKK 5,740 million related to Etavopivat (DKK 5,546 million in 2022), DKK 4,648 million related to Ziltivekimab (DKK 4,648 million in 2022), all of which are intangible assets under development. In addition, intellectual property rights contain DKK 6,018 million related to Rybelsus® (DKK 6,584 million in 2022), which has a remaining useful life of 11 years (12 years in 2022), DKK 4,206 million related to Nedosiran (DKK 3,704 million in 2022) with a remaining useful life of 13 years and DKK 9,480 million (DKK 10,251 million in 2022) related to the RNAi technology platform, with a remaining estimated useful life of 21 years (22 years in 2022). ACCOUNTING POLICIES Research and development projects Internal and subcontracted research costs are fully charged to the consolidated income statement in the period in which they are incurred. Consistent with industry practice, development costs are also expensed until regulatory approval is obtained or is probable; refer to note 2.3. Payments to third parties under collaboration and licence agreements are assessed for the substance of their nature. Payments which represent subcontracted research and development work are expensed as the services are received. Payments which represent rights to the transfer of intellectual property, developed at risk by the third party, are capitalised. For acquired research and development projects, and intellectual property rights, the likelihood of obtaining future commercial sales is reflected in the cost of the asset, and thus the probability recognition criteria is always considered to be satisfied. As the cost of acquired research and development projects can often be measured reliably, these projects fulfil the capitalisation criteria as intangible assets on acquisition. Subsequent milestone payments payable on achievement of a contingent event (e.g. commencement of phase 3 trials) are accrued and capitalised into the cost of the intangible asset when the achievement of the event is probable. Development costs incurred subsequent to acquisition are treated consistently with internal project development costs. Recognition and measurement Intangible assets are initially measured at cost, and are subsequently measured at cost less any accumulated amortisation and any impairment loss. For intellectual property rights acquired for research and development projects, upfront fees and acquisition costs are capitalised as the historical cost. Subsequent milestone payments payable on achievement of a contingent event will be capitalised when the contingent event being achieved is probable. Intangible assets acquired in a business combination are recognised at fair value at the acquisition date. Amortisation is based on the straight-line method over the estimated useful life. This corresponds to the legal duration or the economic useful life depending on which is shorter, and not exceeding 25 years in either case. The amortisation of intellectual property rights commences after regulatory approval has been obtained or when assets are put in use. Amortisation of software is based on the straight-line method over the estimated useful life of 3-15 years. The amortisation commences when the asset is in the location and condition necessary for it to be capable of operating in the manner intended by Management.