novo-nordisk-2016-7.html
Novo Annual Review 2016
8 / 71
letter from the ceo 2016 sets the trend for the expansion of
novo
a/s? high return
life
science portfolio during 2016,
novo
a/s invested a record dkk 8.7 billion in
life
sciences
companies
, representing close to a 200% increase over 2015. this was primarily driven by the allocation of funds to larger equity stakes in private
companies
by the large investments team, as well as increased investments in the us by the ventures investment team. at year end, we partly or fully owned more than 80 portfolio
companies
in the
life
sciences, and our objective is to continue to grow our investments in this sector in the years to come. while the return on
life
science investments was down by 4% for the year, mainly due to drops in the share prices of chr. hansen holding a/s and ophthotech corp, the long- term irr (internal rate of return) of the portfolio remains at a highly attractive 21% on a five-year basis and 16% on a ten-year basis. we also took part in the successful public listings of eight portfolio
companies
in the us market in 2016, highlighting our position as one of the most active global investors in
life
sciences today. record dividend from the
novo
group the growth rates of
novo
nordisk a/s and
novo
zymes a/s slowed during 2016. nevertheless, both
companies
increased their profit and dividend pay-outs to new record levels. income from the
novo
group in 2016 amounted to dkk 7.1 billion, corresponding to a significant increase of 67% compared to 2015, and i am confident in the future prospects of both
companies
. investing in the future of
life
science
novo
a/s spans the entire range of
life
science investments: from early-stage ideas that need financial and commercial nurturing, to well-established biomedical and bioindustrial
companies
that require significant capital and a long-term investor to accelerate growth. we are able to provide the managerial, financial and strategic support that
companies
need to develop to the next stage, and we have the financial strength to stay the course. following an extensive strategic review in 2016,
novo
a/s plans to significantly grow its large investments and venture portfolio in the years to come. although healthcare reforms are adding pricing and other pressures on the
life
science sector, we believe that the underlying long-term industry trends are attractive, and that
novo
a/s will be able to continue to leverage its significant experience and expertise in the sector to generate an attractive irr. our seeds investment team are supporting early-stage
life
science
companies
at a record pace. this is in line with a strategic decision we made several years ago to contribute to the strengthening of the biotechnology sector in the nordic countries. in the coming years, we will build on the successes of our seed investment portfolio in the nordic countries and expand internationally. as we broaden our international seed investing network, we believe we can also attract international investors to the nordic region. adding value to society
novo
a/s will remain a strong owner of the
companies
in the
novo
group. in accordance with the articles of association of the
novo
nordisk foundation,
novo
a/s has a permanent commitment to remain the controlling shareholder in
novo
nordisk and
novo
zymes. on the investment front,
novo
a/s will deploy its capital in the
life
science sector to generate attractive returns that will enable the foundation to continue to increase its grants for scientific, humanitarian and social purposes. 8
novo
a/s 2016
novo-letter-2016-9.html
