Falling US prices hurt Danish Novo Nordisk profit

Denmark's Novo Nordisk, the world's top insulin maker, said Thursday its 2016 net profit was below forecasts due to falling product prices in the US, a huge market for the company.

The group, which controls nearly half of the global market for insulin, posted a nine percent rise in 2016 net profit, but its operating income fell by two percent to $48.4 billion (45.1 billion euros).

After announcing in September that it would slash 1,000 jobs around the world, the group expects another slowdown in its 2017 operating performance.

Net profit in 2016 stood at 37.9 billion kroner (5 billion euros, $5.4 billion) with a turnover of 111.8 billion kroner, up six percent, at the top end of the downwards- revised forecast range in October.

For 2017, it expects sales growth of between one and six percent in Danish kroner and a rise in operating profit between zero and five percent.

"2016 was a challenging year. While we met our financial guidance for the year, strong market headwinds in the USA meant that we had to revise our long-term financial targets," chief executive Lars Fruergaard Jorgensen said in a statement.

Novo Nordisk said it held a 37 percent market share of diabetes treatments in the US. But sales of its products in the world's largest economy fell by two percent last year due to lower prices and the loss of a contract for its top-selling insulin drug Novolog.

Eleven patients filed a lawsuit in a Massachusetts federal court on Monday, accusing Novo Nordisk and two other insulin makers -- France's Sanofi and American Eli Lilly -- of fixing the life saving drug's prices.

Novo Nordisk said it did not expect the lawsuit to cause financial harm to the company.

In the long term, Novo Nordisk said it expects its operating profit to grow annually by five percent. This target had remained at 20 percent for 20 years until February 2016, when it was slashed to 10 percent.

"However, 2016 was also a year in which we announced very encouraging clinical data for our key products, providing a solid foundation for future growth," Jorgensen said.

His comments come three days after the company announced it would invest 135 million euros over the next 10 years at an Oxford University research centre to find treatment for type 2 diabetes.