For nearly 90 years, Novo Nordisk has combined drug discovery with technology to turn science into solutions for people with diabetes. We also provide treatments for people with haemophilia and growth hormone deficiency and for women experiencing symptoms of menopause. We leverage our expertise with protein molecules, chronic disease management and device technology to provide innovative treatments that make a difference in quality of care.

Novo Nordisk has more than 32,000 employees in 75 countries and markets products in more than 190 countries. Our B shares are listed on NASDAQ OMX Copenhagen and our ADRs are listed on the New York Stock Exchange under the symbol NVO. For more information about our company, visit novonordisk.com.

We leverage our expertise to make a difference in quality of care.

We report on our financial, social and environmental performance in one integrated report and we report additional information online. This public filing contains references and links to information posted on the company’s website; such information is not incorporated by reference into the public filing. The management review, as defined by the Danish Financial Statements Act, is com prised of pp 2–54 and 100–101.

Material and business-critical information is reported in the annual report. Information for specific stakeholder groups is reported at annualreport2011.novonordisk.com. We value feedback and welcome questions or comments about this report or our performance at annualreport@novonordisk.com.

		2		Our 2011 accomplishments and results
		2		Letter from the Chairman
		3		Letter from the CEO
		5		Performance in 2011
		13		Outlook 2012
		14		Performance highlights
		16		Our business
		17		The Novo Nordisk Way
		18		Our business
		18		Our corporate strategy
		20		Triple Bottom Line management
		22		Risk management
		26		Pipeline overview
		28		Novo Nordisk at a glance
		30		Diabetes care
		31		The diabetes pandemic
		33		Different pathways to diabetes control
		34		Changing Diabetes®
		36		Biopharmaceuticals
		37		Commitment to haemophilia
		38		Changing Possibilities in Haemophilia®
		39		Other therapy areas
		40		Governance, remuneration and leadership
		41		Corporate governance
		44		Remuneration report
		48		Board of Directors
		51		Executive Management
		52		Shares and capital structure
		55		Financial, social and environmental statements
		56		Consolidated financial, social and environmental statements
		100		Summary of financial data 2007–2011 in EUR
		101		Quarterly financial figures 2010 and 2011
		102		Financial statements of the Parent company
		109		Management’s statement and Auditor’s reports
		112		Additional information
		112		Index
		113		Our products

Lars Rebien Sørensen
President and chief executive officer

Just as we thought the global economy was recovering from the financial crisis in 2008, we were reminded midway through 2011 that there is still a long way to go.

We saw slow or no economic growth and growing public debts in European countries and the US, with the focus swinging between the instability in the euro zone and the political stalemate in the US Congress preventing adoption of long-term financial measures to deal with soaring public debt.

Innovation is the only sustainable engine for growth.

The situation has been likened to the Great Depression in the 1930s, with hardship felt today by millions of people who have lost their jobs or their savings, but the situation today is different nevertheless. It seems more like a crisis of confidence – confidence in our financial systems, in our democracies’ ability to agree on long-term solutions, and in ourselves and each other.

What we are witnessing is a giant transfer of wealth and jobs from economies in the West to emerging economies in Asia, the Middle East, Latin America and, to some extent, Africa. This is painful for those affected negatively, but we must not forget that more jobs are being created than lost and that the livelihood of hundreds of millions of people is improving, creating the foundation for more equal growth in the future. I am confident that many companies will emerge from the crisis as more innovative, having realised

that innovation is the only sustainable engine for growth. This means finding better ways of providing goods and services and solving unmet needs in a financially, socially and environmentally responsible way.

With public spending under pressure, provision of healthcare has again been in focus and, consequently, the pharmaceutical industry has had to make significant adjustments. No market we serve has been untouched by this trend. In 2011, Novo Nordisk faced the consequences of healthcare reforms in many markets – with our business in the US and Europe particularly affected.

Review of 2011
Given the current climate, it is rewarding that Novo Nordisk was able to grow sales by 11% in local currencies in 2011. This growth was driven by our full portfolio of modern insulins, NovoRapid^®, Levemir^® and NovoMix^®, but most significantly by the increasing demand for Victoza^®, our treatment for type 2 diabetes, which became the leader in the GLP-1 category of diabetes treatments.

This sales growth, combined with continued focus on efficiency of our operations, resulted in operating profit growth of 18% reported and 22% in local currencies. This is significantly above results for the general pharmaceutical industry.

Equally significant were the finalisation of the clinical activities and filing for regulatory approval in Europe, Japan and the US of a new generation of insulin products. These are based on the ultra-long principle of Degludec, allowing for a half-life twice as long as the basal insulins most commonly used today. With these products it is our hope that we can offer both the world’s longest-acting basal insulin, Degludec, and a combination of this basal insulin with the world’s leading short-acting insulin, NovoRapid^® (NovoLog^®), DegludecPlus, which will offer people with diabetes superior

glucose control, reducing the risk of hypoglycaemia (too low blood sugar) and providing greater dosing flexibility. Degludec is also designed to provide people with diabetes the flexibility to administer their insulin at any time of day, at different times from day to day.

We also saw innovation across a broad range of our therapeutic areas, with progress in the development of a new clotting factor, vatreptacog alfa, intended to improve treatment for haemophilia patients with inhibitors. We also made progress in the development of molecules to support the expansion of our presence into haemophilia A and B, as well as in a strong portfolio of inflammation development projects.

In 2011, all UN member states pledged to develop diabetes strategies and set targets for improvement.

The year was also a success for the millions of people with diabetes and other chronic conditions. I was encouraged by the outcome of the United Nations High-Level Meeting on non-communicable diseases in New York in September. Novo Nordisk played a part in the adoption of a UN declaration on diabetes in 2006, and last year we again played a role as all UN member states pledged to develop diabetes strategies and set targets for improvement in screening, treatment and outcomes. This was a moment for celebration for people with diabetes throughout the world. We believe the pledge by UN member states can be translated into concrete action to increase awareness of the threat diabetes poses.

Our new vision statement and updated guiding principles and values, The Novo Nordisk Way, clearly states that “we never compromise on quality and business ethics”. With this we want to send a clear signal, internally as well as externally, regarding what our stakeholders can expect from each of us at Novo Nordisk. To support this commitment to integrity and high standards, in 2011 we further strengthened our efforts to ensure adherence to our global policies and procedures.

Not all went according to plan, however, in 2011.

Healthcare reforms in Europe, combined with the anaemic expectations of the future pharmaceutical market, forced us to re-allocate resources from our European organisation to fast-growing markets in the US and Asia. This led to the unfortunate redundancy of approximately 300 positions. We value our people and we did not take this decision lightly. Securing cost-efficiency, however, is the only guarantee for the long-term success of our company.

In Asia, a major earthquake off the coast of Japan caused a giant tsunami which killed thousands and caused severe property damage as well as contributing to a nuclear meltdown close to our factory in Koriyama.

We were proud to see our Japanese colleagues standing firm while confronted with great personal hardship, ensuring our ability to deliver life-saving medicines to the people of Japan while protecting the assets of our company.

Looking ahead
We have significant confidence in our people, our pipeline and our products. Unlike most of the pharmaceutical industry, Novo Nordisk will undertake a year of major investments in 2012. This includes investment in further market expansion of our current portfolio, in preparing for the launch of our new-generation insulins and in research and development activities for the medium to long term.

Our focus in 2012 will be on:

•	The regulatory process for approval of Degludec and DegludecPlus in our main markets and preparations for the launch of these new-generation insulins.
•	Execution and monitoring of the phase 3 clinical programme for liraglutide in obesity.
•	Clinical development of fixed combinations of Degludec and Victoza®, which may offer a new option for intensification of the treatment of type 2 diabetes.
•	Clinical development of vatreptacog alfa, for improved treatment of haemophilia with inhibitors.
•	Expansion of our international organisation, particularly in fast-growing regions in the areas of sales and marketing, production and research and development.
•	Co-organising the European Diabetes Leadership Forum under the auspices of the Danish EU presidency to reach consensus about what it will take to address the current challenges and change diabetes.

With significant investment and continued focus on development, we expect continued growth for Novo Nordisk in 2012 and beyond.

I would like to thank the entire Novo Nordisk organisation for their contributions to our success this year, our stakeholders and partners for their collaboration, and our shareholders for their confidence and continued support.

Lars Rebien Sørensen
President and chief executive officer

Performance
in 2011

Despite continued global economic turmoil, 2011 was a positive year for Novo Nordisk with strong sales growth, good performance against long-term financial, social and environmental targets and very significant progress in the clinical development pipeline.

Sales increased by 9% in Danish kroner and by 11% measured in local currencies during 2011 compared to 2010. Sales growth was realised in both diabetes care and biopharmaceuticals. Victoza^® and modern insulins were the main contributors to growth, with Victoza^® sales increasing by 159% (166% in local currencies) and sales of modern insulins increasing 8% (11% in local currencies). Sales growth was realised in all regions. Sales in North America increased by 13% and in International Operations by 12%, both in Danish kroner, and by 18% and 17% respectively in local currencies. Sales growth in 2011 was reduced by approximately 2 percentage points due to healthcare reforms in the US, several European markets, Turkey and China.

2011 was a positive year for Novo Nordisk with strong sales growth.

Novo Nordisk achieved a significant milestone in 2011, as applications for marketing authorisation of two new-generation insulins, Degludec¹ and DegludecPlus², were filed in major markets. We made significant progress in the development of solutions for the range of haemophilia and other rare bleeding disorders, including initiation of a phase 3 trial programme for a fast-acting treatment of haemophilia with inhibitors. A phase 1 trial was also initiated for a long-acting growth hormone formulation.

In addition, we exceeded long-term targets for resource optimatisation, both in terms of reduced energy and water consumption for production and CO₂ emissions from energy consumption for production. We also continued to exceed our long-term target for employee engagement. Notable progress was made in reaching targets for insulin sales in least developed countries and increasing diversity in our senior management teams.

Financial performance

2011 performance against long-term
financial targets
By focusing on growth, profitability, operating assets and generation of cash, our four long-term financial targets guide Novo Nordisk’s financial development. Our historic long-term financial targets are operating profit growth, operating margin, operating profit after tax to net operating assets and cash conversion. The realised performance for three of the four ratios exceeded the target level while the operating margin performance was progressing towards the target. See p 6 for an update on the long-term financial targets.

Diabetes care sales development
Sales of diabetes care products increased by 13% measured in local currencies and by 10% in Danish kroner to DKK 50,425 million in 2011 compared to 2010. Novo Nordisk is the world leader in diabetes care and now holds a global value market share of 24% compared to 23% at the same point in time last year.

Modern insulins, human insulins and protein-related products
In 2011, sales of modern insulins, human insulins and protein-related products increased by 5% measured in local currencies and by 3% in Danish kroner to DKK 41,859 million compared to 2010, driven by North America, International Operations and Region China. Global insulin sales growth was negatively impacted by healthcare reforms in the US, Europe, Turkey and China as well as by a decline in human insulin sales in Europe, the US and Japan.

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North America
Sales of Victoza^® in North America increased by 167% in local currencies and by 155% measured in Danish kroner in 2011 compared to 2010. This reflects continuous GLP-1 market expansion driven by Victoza^®, and the value market leadership position Victoza^® achieved during 2011.

Victoza® reached global market share leadership in the GLP-1 segment in 2011.

Europe
Sales in Europe increased by 114% in local currencies and by 115% measured in Danish kroner in 2011. This reflects continued roll-out across Europe and in particular solid sales growth in France, the UK and Italy.

International Operations
Sales in International Operations increased by 781% in local currencies and by 776% measured in Danish kroner in 2011. This reflects a low comparison base from 2010 but also very solid sales performance especially in Brazil and the countries of the Middle East.

Region China
Victoza^® was launched in China during the fourth quarter of 2011 and although initial market feedback is positive, actual sales are limited.

Japan & Korea
Sales in Japan & Korea increased, from a relatively low base in 2010, by 348% in local currencies and by 370% measured in Danish kroner in 2011. The sales performance in 2011 is encouraging and reflects the expiry of the 14 days prescription limitation mid-2011 and a significant commercial focus on Victoza^® throughout the year.

NovoNorm^®/Prandin^®/PrandiMet^® (oral antidiabetic products)
In 2011, sales of oral antidiabetic products declined by 3% measured in local currencies and by 6% in Danish kroner to DKK 2,575 million compared to 2010. The sales development primarily reflects lower sales in Europe due to generic competition in several European markets.

Biopharmaceuticals
sales development

In 2011, sales of biopharmaceutical products increased by 8% measured in local currencies and by 6% measured in Danish kroner to DKK 15,921 million compared to 2010 primarily driven by North America and International Operations.

NovoSeven^® (bleeding disorders therapy)
Sales of NovoSeven^® increased by 7% in local currencies and by 4% in Danish kroner to DKK 8,347 million compared to 2010. All regions contributed to the sales growth of NovoSeven^®; International Operations was the primary contributor to growth followed by Europe and North America.

Norditropin^® (growth hormone therapy)
Sales of Norditropin^® increased by 5% measured in local currencies and by 5% measured in Danish kroner to DKK 5,047 million compared to 2010. The sales growth was driven by International Operations, North America and Japan & Korea, partly offset by a decline in Europe. Novo Nordisk is the second-largest company in the global growth hormone market with a 24% share measured in volume.

Other products
Sales of other products within biopharmaceuticals, which primarily consist of hormone replacement therapy (HRT)-related products, increased by 15% measured in local currencies and by 13% in Danish kroner to DKK 2,527 million compared to 2010. This development primarily reflects continued sales progress for the low dose Vagifem^® that was launched in North America and Europe in 2010. Sales growth was furthermore supported by GlucaGen^® sales in the US and Japan, and partly off-set by a decline in Activelle^® sales following patent expiry in Europe.

Development in costs
and operating profit

The cost of goods sold grew by 8% to DKK 12,589 million in 2011. Reported gross margin increased by 0.2 percentage point to 81.0% compared to 80.8% in 2010. Measured in local currencies the gross margin increased by 0.4 percentage point in 2011 reflecting a positive product mix impact due to the upgrade from human insulins to modern insulins.

In 2011, total non-production-related costs increased by 5% in local currencies and by 3% in Danish kroner to DKK 31,877 million compared to 2010.

Sales and distribution costs increased by 4% to DKK 19,004 million primarily as a result of increased sales promotion in the US and China, sales force expansion in the US in the fourth quarter of 2010 and costs related to the ‘Manufacturer’s fee’ part of US healthcare reform.

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Research and development costs of DKK 9,628 million remained at an absolute level similar to 2010. Whereas the cost level in 2010 reflects execution of the phase 3a programmes for both Degludec and DegludecPlus, the cost level in 2011 reflects the initiation of pivotal trial activities within diabetes care, obesity and haemophilia.

Operating profit in 2011 increased by 18% to DKK 22,374 million.

Licence fees and other operating income constituted DKK 494 million in 2011 compared to DKK 657 million in 2010. This decline is primarily due to a non-recurring income from a patent settlement during the first quarter of 2010.

Operating profit in 2011 increased by 18% to DKK 22,374 million compared to 2010. In local currencies the growth was 22%.

Net financials and tax

Net financials showed a net expense of DKK 449 million in 2011 compared to a net expense of DKK 605 million in 2010. As of 31 December 2011, foreign exchange hedging losses of around DKK 1,200 million have been deferred for recognition in the income statement in 2012.

For 2011, the foreign exchange result was an expense of DKK 322 million compared to an expense of DKK 1,341 million in 2010. The foreign exchange loss in 2011 reflects losses on foreign exchange hedging contracts primarily related to the Japanese yen due to the appreciation versus the Danish krone in 2011 compared to the exchange rate level prevailing in 2010 and in the last quarter of 2009.

Also included in net financials is the result from associated companies with an expense of DKK 4 million. In 2010, the result from associated companies was an income of DKK 1,070 million as Novo Nordisk recorded a non-recurring income of approximately DKK 1.1 billion from the sale of shares in ZymoGenetics, Inc.

The effective tax rate for 2011 was 22%.

Capital expenditure
and free cash flow

Net capital expenditure for property, plant and equipment for 2011 was DKK 3.0 billion compared to DKK 3.3 billion in 2010. The main investment projects in 2011 were the insulin filling plant in Tianjin, China, filling capacity for biopharmaceuticals and new device manufacturing capacity in Denmark and the US.

Free cash flow for 2011 was DKK 18.1 billion compared to DKK 17.0 billion in 2010.

Equity

Total equity was DKK 37,448 million at the end of 2011, equivalent to 57.9% of total assets, compared to 60.2% at the end of 2010. Please refer to p 59 for further elaboration of changes in equity during 2011.

build healthcare capacity to prevent and treat diabetes in developing countries. The company’s regular contribution was DKK 51 million, equivalent to 0.125% of net insulin sales for the year, in accordance with obligations previously agreed to by the company’s shareholders. During 2011, the company made a special contribution of DKK 14 million to WDF for activities relating to the UN High-Level Meeting on non-communicable diseases, including diabetes. Novo Nordisk also supports the Novo Nordisk Haemophilia Foundation (NNHF), established in 2005. In 2011, we donated DKK 16 million to NNHF. For more information on the foundations, see pp 34 and 39.

Clinical trials
The number of people participating in Novo Nordisk’s clinical trials increased by 16% in 2011 compared with 2010. A total of 22,445 people participated in Novo Nordisk’s clinical trials in 2011, compared with 19,361 in 2010.

Pricing
Our goal is for our differential pricing policy to be accepted in all least developed countries. We sold human insulin at or below the policy price, not to exceed 20% of the average prices in the western world, in 75%, or 36 of 48, of the least developed countries during 2011.

Capacity building
To achieve sustainable improvements in access to care and personal health, we seek to improve the ability to diagnose and treat diabetes. Over the years, our investments in training and education of healthcare professionals have been significantly scaled up. During 2011, approximately 835,000 healthcare professionals worldwide attended training programmes conducted or sponsored by Novo Nordisk. We also reached approximately 626,000 people with diabetes, providing training on how to manage their condition.

In addition to enrolling about 3,400 children with type 1 diabetes in our Changing Diabetes^® in Children programme during 2011, taking the total to nearly 5,000, we trained about 1,000 healthcare providers and established more than 40 clinics. The programme supports diagnosis and treatment of diabetes in children in developing countries.

Employees

Our global growth continued as projected, with new employees primarily added in International Operations, North America and Region China. At the end of 2011, the total number of full-time employees was 31,499, an increase of 7% compared to 2010. At the end of 2011, Novo Nordisk employed 32,632 people. In the same period, employee turnover increased to 9.8% from 9.1%.

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Engagement
The ability to manage global growth and stimulate productivity and innovation is tracked through a set of engagement scores from our annual employee survey, eVoice. In 2011, the consolidated engagement score (on a scale of 1 to 5, with 5 being the best score) was 4.3, which was consistent with 2010. Annual scores have met our target of 4.0 or above consistently since 2006.

Diversity, a prerequisite for global growth, increased in senior management teams in 2011.

Diversity
We believe that fostering workplace diversity is a prerequisite for achieving global growth. Our ambition is that by 2014 all senior management teams will include employees of both genders and different nationalities. While pursuing this objective we insist that all positions are filled by the best candidate. Though we have chosen two dimensions of diversity to track at the senior level, our focus is broader, ensuring equal opportunities, non-discrimination and an inclusive working culture.

At the end of 2011, diversity in terms of gender and nationality was reflected in 62% of the 29 senior management teams, compared with 54% of 28 at the end of 2010.

Health and safety
The frequency of occupational injuries decreased to 3.4 per million working hours in 2011, compared with 4.9 per million working hours in the previous year.

Regrettably, a Novo Nordisk sales representative in Bangladesh died in a car accident while on Novo Nordisk business in 2011. With thousands of employees on the roads around the world, we introduced a new global company car guideline in 2011 that includes the stipulation that company cars must have above-average safety ratings using regional benchmarks.

Assurance

Quality
As sales and production output have increased, quality levels, measured in terms of inspection findings, have been maintained. In 2011, 76 inspections of Novo Nordisk’s production facilities were concluded with no significant re-inspections or warning letters.

In 2011, Novo Nordisk had five instances of products recalled from the market, in line with 2010. Three recalls were implemented in single countries due to product storage issues in the distribution chain. Two recalls, involving several countries, were the result of product defects relating to production. None of the products recalled caused any harm to patients. In all cases, we cooperated with local health authorities to ensure appropriate information was provided to pharmacies, medical practitioners and patients.

Values
In 2011, we rolled out an updated version of our values-based management system, the Novo Nordisk Way, with significant focus on ensuring that the values are actively lived across the organisation.

Outputs

The total volume of waste increased 62% to 41,376 tons in 2011 from 25,627 tons in 2010. The increase was primarily due to the fact that yeast slurry, previously reused as pig feed, is now disposed of at biogas plants and therefore treated as recycled waste. For this reason, 70% of waste was recycled in 2011 compared with 51% in 2010.

Energy consumption and CO2 emissions decreased in 2011.

While sales and production increased in 2011, CO₂ emissions related to production fell by 2% compared with 2010 levels. This was due to increased energy efficiency in all production facilities globally.

 

	Environmental target update With the achievement in 2011 of the company’s long-term targets for energy and water consumption, we have framed a new environmental strategy towards 2020 and set interim targets for 2014. Focusing on resource productivity, the new target levels are to keep the annual rate of increase below the projected rate of growth in production. We believe that the new targets for 2012–2014 are ambitious. We have achieved a 34% reduction in water consumption for production since 2007. Because a substantial portion of the water used by Novo Nordisk is for fermentation and purification of insulin, finding opportunities to further reduce water consumption is challenging. While we have reduced energy consumption for production by 21% since 2007, we have more options regarding energy usage. The target for constraining growth in energy consumption is therefore lower than the target for constraining growth in water consumption.
	Performance against	Result		Annual targets
	environmental targets	2011		2012–2014
	Energy consumption	(2.1)%		< 3.3%
	(change compared to prior year)
	Water consumption	4.3%		< 5.4%
	(change compared to prior year)

The target levels are based on the assumption of a continuation of the current business environment and given the current scope of business activities.

Outlook 2012

The current expectations for 2012 are summarised in the table below:

Expectations are as reported,	Current expectations
if not otherwise stated	2 February 2012
Sales growth
• in local currencies	7–11%
• as reported	Around 4 percentage points higher
Operating profit growth
• in local currencies	Around 10%
• as reported	Around 7 percentage points higher
Net financials	Expense of around DKK 1,000 million
Effective tax rate	22–23%
Capital expenditure	Around DKK 3.5 billion
Depreciation, amortisation and impairment losses	Around DKK 2.9 billion
Free cash flow	Around DKK 18 billion

Novo Nordisk expects sales growth in 2012 of 7–11% measured in local currencies. This is based on expectations of continued market penetration for Novo Nordisk’s key products, as well as expectations of continued intense competition, generic competition to oral antidiabetic products, and a continued impact from the implementation of healthcare reforms primarily in the US and Europe. Given the current level of exchange rates versus Danish kroner, the reported sales growth is expected to be around 4 percentage points higher than growth measured in local currencies.

For 2012, growth in operating profit is expected to be around 10% measured in local currencies. The outlook for growth in operating profit reflects significant expenditure related to the expected launch of the ultra-long-acting insulin Degludec. Given the current level of exchange rates versus Danish kroner, the reported operating profit growth is expected to be 7 percentage points higher than growth measured in local currencies.

For 2012, Novo Nordisk expects a net financial expense of around DKK 1,000 million. The current expectation primarily reflects a net loss on the foreign exchange contracts hedging Novo Nordisk’s exposure in US dollar, Japanese yen and Chinese yuan. The accounting effect of foreign exchange hedging contracts has, in line with Novo Nordisk’s accounting policies, been deferred for loss recognition in 2012 when the hedged operating cash flows will be realised.

The effective tax rate for 2012 is expected to be 22–23%.

Capital expenditure is expected to be around DKK 3.5 billion in 2012, primarily related to investments in filling capacity for biopharmaceuticals in Denmark, filling capacity for insulin in Russia, and new prefilled device production capacity in Denmark and the US. Expectations for depreciation, amortisation and impairment losses are around DKK 2.9 billion and free cash flow is expected to be around DKK 18 billion.

All of the above expectations are based on the assumption that the global economic environment will not significantly change business conditions for Novo Nordisk in 2012 and that currency exchange rates, especially the US dollar, will remain at the current level versus the Danish krone during the remaining part of 2012.

Novo Nordisk has hedged expected net cash flows in a number of invoicing currencies and, all other things being equal, movements in key invoicing currencies will impact Novo Nordisk’s operating profit as outlined in the table below:

Key	Annual impact on Novo Nordisk’s	Hedging
invoicing	operating profit of a 5%	period
currency	movement in currency	(months)
USD	DKK 775 million	11
JPY	DKK 170 million	12
CNY	DKK 100 million	121
GBP	DKK 75 million	11

1. USD used as proxy when hedging Novo Nordisk’s CNY currency exposure.

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The financial impact from foreign exchange hedging is included in note 28 pp 80–82.

Forward-looking statements
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document and Form 20-F, both expected to be filed with the SEC in February 2012, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:

•	statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
•	statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
•	statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and
•	statements regarding the assumptions underlying or relating to such statements.

In this document, examples of forward-looking statements can be found under the headings ‘Performance in 2011, ‘Outlook 2012’ and elsewhere.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, inter ruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees and failure to maintain a culture of compliance.

Please also refer to the overview of risk factors in ‘Risk Management’ on pp 22–24.

Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.

The Novo Nordisk Way

Novo Nordisk is its people. As the company grows and globalises, it is important that we continue to build on a strong foundation of shared values. The Novo Nordisk Way, our values-based management system, was updated in 2011. In a concise and compelling form it makes clear to employees what the company’s ambitions are, how we will achieve them, and what we value as an organisation. To support it, we have framed 10 essentials that describe how our values are put into action in the way we work and collaborate and the way we interact with other people.

During 2011, employees around the world explored the essence of the Novo Nordisk Way and what it means to them. Nearly every one, 97% of employees, participated in training activities. The updated and simplified format has been welcomed, in particular the emphasis on patients at the front and centre of everything we do and the clear language on respect for everyone. The values are also consistent

with the universal principles for responsible business conduct expressed by the UN Global Compact, to which Novo Nordisk has been a signatory since 2002.

The Novo Nordisk Way expresses our deeply rooted values.

A follow-up methodology involving values audits, or facilitations, helps us assess and manage the degree to which the Novo Nordisk Way is actively put into practice throughout our company. To support this process, we have a global facilitator team of senior people with deep understanding of our business and business environment. The head of the team has a formal reporting line to the chairman of the Board.

For some units, these audits take place annually; for others, the process takes place once every three to five years. Observations from this process are reported to the Board of Directors each year. See more about facilitations on pp 11 and 43.

and the best method of oral delivery, one that will ensure that the active ingredients are not destroyed or degraded in the gastrointestinal tract before being absorbed.

We also seek to expand our leadership within GLP-1 treatment. With the successful launch of Victoza^® (liraglutide), our once-daily GLP-1 analogue, we have the leading GLP-1 treatment for the early stages of type 2 diabetes in adults.

Our goal is to offer treatments that are as safe and convenient as possible.

We are now building a GLP-1 portfolio with the intention to provide an even broader range of treatment options, including longer-acting versions to improve convenience. Our late-stage GLP-1 pipeline includes two new treatments, a fixed combination of Victoza^® with Degludec, which may offer the benefits of both compounds in a convenient solution, and a novel once-weekly GLP-1 analogue, semaglutide.

While there is not yet a cure for type 1 diabetes, we are conducting research in cooperation with leading academic centres to tackle the roots of the condition. At our Hagedorn Research Institute, we are making progress towards preventing and ultimately curing diabetes through projects involving stem cell biology and beta cell regeneration. For information on our efforts to find a cure, see annualreport2011.novonordisk.com.

Establish presence in obesity treatment

Obesity is known to be a major risk factor in developing type 2 diabetes, cardiovascular disease and a range of other life-threatening diseases. Despite the growing prevalence of severe and morbid obesity globally, there are currently only a few treatment options.

In studies of people with diabetes and people with obesity who do not have diabetes, liraglutide has shown the potential to reduce food intake with the result of controlling weight. We are therefore exploring the option of using liraglutide as a new way of treating high-risk patients, those with obesity-related medical conditions such as high blood pressure and high cholesterol levels.

Gaining regulatory approval for antiobesity medications remains a major challenge. Compounds developed by other pharmaceutical companies to target obesity have experienced significant challenges in obtaining regulatory approval due to concerns about side effects outweighing potential benefits. However, given the results seen so far in randomised controlled trials, we believe liraglutide can offer benefits for people with severe obesity and co-morbidities.

Achieve leadership in haemophilia

Our ambition is to achieve leadership in haemophilia by improving the efficacy of prevention and treatment of bleeding episodes with improved treatment options for all patients. With a significant number of compounds in clinical development, we are set to build a strong portfolio of recombinant products, covering all the main segments of the haemophilia market.

We introduced NovoSeven^® for the treatment of haemophilia patients with inhibitors 15 years ago and it remains the leading recombinant bypassing agent available for the 3,500 people with haemophilia who have developed inhibitors to conventional treat ments. To further improve treatment of bleeding episodes for people with inhibitors, we have a fast-acting recombinant factor VIIa analogue, vatreptacog alfa, with improved efficacy in phase 3 clinical development.

We are leveraging our core protein capabilities and our understanding of haemophilia to develop factor VIII and factor IX com pounds for the treatment of haemophilia A and B respectively. The primary focus of these development projects is to treat and prevent bleeding episodes and consequently reduce damage to joints. In 2011, these projects were either recruiting patients in phase 3 trials or approved to initiate phase 3 trials.

Novo Nordisk filed for regulatory approval of a recombinant factor XIII treatment in the US and Europe during 2011. This treatment, if approved, will be the only recombinant treatment option for the 600 people worldwide diagnosed with congenital factor XIII deficiency.

Achieve leadership in growth disorders

Novo Nordisk’s strategy in growth hormone therapy is to achieve leadership by providing innovative and convenient products and devices as well as a full range of service offerings for physicians and patients in markets where services can be delivered. Norditropin^® is the only liquid, room temperature-stable growth hormone product available in a prefilled pen device, the ergonomic Norditropin^® FlexPro^® with an easy-touch dosing mechanism.

We are also developing a long-acting growth hormone formulation, currently in phase 1 trials.

Establish presence in inflammation

Our expertise in design of therapeutic proteins and chronic disease care can be leveraged to address the significant unmet medical needs in diseases caused by chronic autoimmune inflammation. Initial clinical tests of first-in-class, protein-based therapuetic agents that reduce the overactive immune response indicate the potential to offer significant benefit to patients, but these projects are still at an early stage of clinical development.

There are a significant number of people with autoimmune inflam- matory diseases who do not adequately respond to current treatments. In order to successfully build a presence in treatment of inflammation, we are investing in early-stage research with the hope of finding the underlying mediators of inflammatory conditions and developing new treatments, particularly for patients who are unresponsive to current treatments.

Triple Bottom Line management

We aim to grow our business in ways that are both profitable and responsible. Recognising that long-term business success relies on a healthy economy, environment and society, we manage our business in a way that addresses multiple dimensions of performance: financial, social and environmental. We apply the Triple Bottom Line principle as a lens for decision making. This approach supports long-term success by creating shared value for society and our investors.

Our Triple Bottom Line business principle is anchored in our company bylaws, the Articles of Association, and the Novo Nordisk Way. We drive our social and environmental performance with the same diligence and focus as our financial performance. All business units are responsible for monitoring and reporting on their performance in all three dimensions, based on long-term goals and targets cascaded through the balanced scorecard process. Managers and employees are also encouraged to take initiatives that extend beyond compliance measures.

Helping people live better lives is at the core of our business.

Our corporate priorities reflect initiatives in support of business objectives as well as broader sustainability goals. Our main contributions include expanding access to healthcare and promotion of healthy lifestyles, offering an inclusive, healthy and engaging working environment, driving carbon reduction and climate advocacy, pursuing resource efficiency, combating corruption and ensuring consistent responsible business practices and good governance.

In 2011, we strengthened internal governance and oversight of our corporate sustainability efforts and made progress in embedding the Triple Bottom Line more firmly across the organisation. The Sustainability Committee, with representation from all parts of the business, has overall responsibility for setting direction for strategic and proactive management of the sustainability agenda. This includes implementation of initiatives in support of the company’s long-term sustainable growth and in accordance with the UN Global Compact and other voluntary commitments. For more about the internal Novo Nordisk boards and committee structure for managing multiple dimensions of performance, see annualreport2011.novonordisk.com.

The financial, social and environmental priorities that determine the indicators we use to manage performance are listed on pp 14–15.

Deliver competitive financial results

Growing our business and delivering competitive financial results is what allows us to help patients live better lives, offer an attractive return to our shareholders and contribute to our communities.

Our targets for operating profit margin, operating profit growth and the ratio of operating profit after tax to net operating assets provide a guide to the level of growth and profitability to which

we aspire. The targets also help management establish a balance between growing our business profitably in the near term and ensuring the company is able to make investments in longer-term growth, including investments in clinical development of improved therapies.

The growth target for operating profit has been viewed as the cornerstone financial target since we began using financial targets in 1996. It allows for deviations in individual years if necessitated by business opportunities, market conditions or exchange rate movements. The continued improvement in efficiencies at our manufacturing facilities around the world and, longer term, in the productivity of our global sales force supports improvements in our operating margin, as does improvement in the ratio of administrative costs to sales. Our cash to earnings helps ensure that we are able to pay an attractive dividend.

Offer a healthy and engaging working environment

We believe that having a healthy and engaging working environment helps attract, motivate and retain employees and that this is critical to sustaining our company’s growth and positive contributions to society. Employees around the world advocate healthy lifestyles, improved prevention, detection and treatment of diabetes, and patient support activities through their work as well as through voluntary initiatives. On World Diabetes Day in November 2011, for instance, more than 7,500 employees in more than 50 countries engaged over 1 million people in activities to raise awareness about the diabetes pandemic.

We have a long-term target to maintain a high level of employee engagement, which is assessed through the annual company-wide survey, eVoice. Survey questions also assess adherence to company values, employees’ perceptions of the quality of management, their working environment and well-being. This information is used by local and corporate management to address any issues discovered through employees’ feedback.

As our business becomes increasingly global, it becomes even more important to embrace diversity and embody a global mindset. We believe that diverse management teams are best suited to drive performance, foster innovative thinking and nurture collaboration between people with different perspectives. We aim to increase diversity because we believe doing so offers a competitive advantage.

Our leadership development programmes emphasise personal leadership and respect for the integrity of each individual. Training for managers includes decision-making that balances short- and long-term considerations and considers multiple dimensions of performance.

Helping people live better lives

Helping people live better lives is at the core of our business. We act on the premise that everyone has a right to health. Access to care is not only an issue in developing countries. As we seek to reach out to more people, we have now begun to report estimates of the number of people treated using Novo Nordisk diabetes care products.

Risk management

We believe that our dynamic approach to risk management ensures that key risks are proactively identified, assessed and managed. For shorter-term risks, we have an ongoing assessment process that takes into account the likelihood of an event, its potential impact on the business and the need for mitigating action.

Maintaining and monitoring a systematic, integrated process to continually assess business risks is the responsibility of Executive Management. The Risk Management Board, which has representatives of senior management from all parts of the business and is chaired by the chief financial officer, sets the strategic direction for the risk management process and challenges the overall risk profile for Novo Nordisk.

	Novo Nordisk’s risk policy
	Our policy for risk management is to proactively manage risk to ensure continued growth of our business and to protect our people, assets and reputation. This means that we will:
	•	utilise an effective and integrated risk management system while maintaining business flexibility
	•	identify and assess material risks associated with our business
	•	monitor, manage and mitigate risks.
	Our risk willingness
	Our risk willingness is characterised by the following:
	•	We develop new innovative products to improve treatment of serious diseases such as diabetes and haemophilia. We accept the high level of risk involved in bringing such products to market to meet the needs of patients in terms of both safety and efficacy.
	•	We make every effort to reduce safety risks to the lowest level possible in both clinical trials and already marketed products. The well-being of patients is paramount.
	•	We take a conservative approach to the management of financial risks.
	•	We strive to reduce supply chain risks through proactive business continuity planning, regular inspections and back-up facilities.
	•	We never compromise on quality and business ethics.
	For more about our risk management process, see annualreport2011.novonordisk.com.

Most important risks

Below are the risks we assess as having the greatest potential impact on our business. The risks are not ranked, but are categorised and described, including 2011 developments in each risk area.

In the process of setting our strategy, we also identify risks that are potential barriers to the achievement of our long-term ambitions. For these risks, see pp 18–21.

Market risks
Price pressures
Healthcare costs are rising and, in many countries, are outstripping the pace of economic growth. There is increasing economic, political and regulatory pressure to contain these costs, including spending on pharmaceutical products. The continued global economic crisis has further exacerbated this trend. Examples of how Novo Nordisk’s key markets are affected include:

•	US: Healthcare reform legislation was enacted in 2010. Continued federal budget issues could lead to further pricing reforms for products purchased through the Medicare and Medicaid programmes.
•	Europe: As the region's debt crisis builds, a number of European governments have announced or implemented several rounds of healthcare reforms, intensifying an already challenging operating environment with significant pricing pressures.
•	China: Price reductions for pharmaceutical products were introduced in September 2011 as part of healthcare reforms. Provincial-level tenders have been introduced in some parts of the country.

Documenting treatment benefits is one way to ensure that innovation is properly valued. Novo Nordisk conducts a considerable number of clinical and health-economic studies to substantiate the benefits of our products for patients and society, particularly for improved diabetes treatment.

Biosimilar competition
The market for therapeutic proteins is becoming more accessible to biosimilar producers. Regulatory processes in Europe and the US may change to facilitate potential approval of biosimilar products without full clinical development once patents expire. Increasing pressure on governments to contain healthcare costs makes this scenario more likely.

To address this risk, Novo Nordisk is continuously developing innovative medicines to address unmet medical needs. One example is our new generation of insulins, Degludec and DegludecPlus. In 2011, more than half of Novo Nordisk’s diabetes care sales were for modern insulins under patent protection. Novo Nordisk anticipates that the expiration of certain patents could impact sales within the next five years, but the potential launch of new products should offset the impact of currently protected products going off patent.

Earlier generations of insulin products have been off patent for years so this is a risk with which Novo Nordisk is familiar and has considerable experience addressing. Biosimilar human insulin products have been present on the European market for several decades but have had only a marginal impact. In countries such