Investor Presentaiton
Novo Nordisk Annual Report 2023
Key operational risks
Risk area
Research and
Clinical Pipeline
Risks
Introducing Novo Nordisk Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
42
22
Description
Findings in clinical activities, regulatory processes or
misjudging of commercial potential, leading to delays
or failure of products in the pipeline.
Impact
Patients would not benefit from innovative treatments.
Could have an adverse impact on sales, profits and market position.
Mitigating actions
Pre-clinical and clinical activities to demonstrate safety
and efficacy.
⚫ Consultations with regulators to review pre-clinical and
clinical findings and obtain guidance on development path.
KEY OPERATIONAL RISKS (ILLUSTRATIVE)
High
2
3
2
Product Supply,
Quality and
Safety Risks
3
Commercialisation
Risks
4
IT Security
Risks
5
Financial
Risks
Higher-than-expected demand or disruption of
product supply due to, e.g. geopolitical instability or
quality issues may compromise product availability,
ultimately impacting patients and representing a lost
commercial opportunity. In addition, there could be
risks related to safety and product liability.
Competitive pressures, as well as market dynamics
and geopolitical, macroeconomic or healthcare crises
(e.g. pandemics) leading to reduced payer ability and
willingness to pay.
Disruption to IT systems, such as cyber-attacks or
infrastructure failure resulting in business disruption
or breach of data confidentiality.
Exchange rate fluctuations (mainly in USD, CNY, JPY
and CAD), disputes with tax authorities and changes
to tax legislation and interpretation.
•
Product shortages could have potential implications for patients.
Could jeopardise reputation and license to operate if regulatory
compliance is not ensured.
Could have an adverse impact on sales, profits and market position.
Compromised patient safety and exposure to product liability
legal proceedings.
Market dynamics could impact price levels and patient access.
Could have an adverse impact on sales, profits and market position.
Could limit our ability to produce and safeguard product quality.
Could compromise patients' or other individuals' privacy.
Could limit our ability to maintain operations or limit future business
opportunities if proprietary information is lost.
Could have an adverse impact on sales, profits and market position.
Could lead to tax adjustments, fines and higher-than-expected
tax level.
Could have an adverse impact on sales and profits.
Significantly expanding global production with multiple
facilities and safety stock to reduce supply risk.
Planning and management of supply chain.
Regular quality audits of internal units and suppliers to
document GMP compliance.
• Identification and correction of root causes when issues
are identified. If necessary, products are recalled.
Innovation of novel products, clinical trial data and real-world
evidence demonstrate added value of new products.
Payer negotiations to ensure improved patient access.
Increased and new access and affordability initiatives.
Company-wide information security awareness activities.
Continuity plans for non-availability of IT systems.
Company-wide internal audit of IT security controls.
Detection and protection mechanisms in IT systems and
business processes.
Hedging for selected currencies.
• Integrated treasury management.
Applicable taxes paid in jurisdictions where business activity
generates profits and multi-year Advance Pricing Agreements
with tax authorities.
Impact
6
4
Low
Likelihood
REPUTATION SCORE
82.1
0.2↓
6
Legal, Patents
and Compliance
Risks
Breach of legislation, industry codes or company
policies. Competitors asserting patents against
Novo Nordisk or challenging patents critical for
protection of commercial product and
pipeline candidates.
Potential exposure to investigations, criminal and civil sanctions
and other penalties.
Could compromise our reputation and the rights and integrity
of individuals involved.
Unexpected loss of exclusivity for, or injunctions against, existing
and pipeline products could have an adverse impact on future sales.
Could have an adverse impact on sales, profits and market position.
Legal review of key activities.
Code of Conduct integrated in our business.
Compliance Hotline in place.
Internal Audit of compliance with business ethics standards.
Internal controls to minimise vulnerability to patent
infringement and invalidity actions.
5
High
We achieved a reputation score
of 82.1 points in 2023 measured
on a scale of 0-100 (0.2 down from
2022). Stable with last year, Novo
Nordisk continues to lead our
selected industry benchmarks. This
excellent reputation score is driven
by positive perceptions of our
products and services, the most
important reputation component,
and growing appreciation from the
informed general public.View entire presentation