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(Reuters) - Novo Nordisk's (NOVOb.CO) new chief executive is looking at making acquisitions to broaden the Danish drugmaker's product line-up, in a change of tack that reflects a need for fresh sources of growth at the world's biggest diabetes company.
"Across our business we need to increasingly look for external innovation," Lars Fruergaard Jorgensen, who took over in January, said in an interview on Thursday.
Reuters reported on Wednesday that Novo had approached Global Blood Therapeutics (GBT.O), a U.S. biotechnology company focused on serious blood disorders, valued at close to $1.5 billion, to discuss a potential takeover.
Jorgensen declined to comment on his interest in the Californian firm but confirmed Novo's biopharmaceuticals business, which includes blood products, was one area where complementary acquisitions were being considered.
"We have strong relationships with hematologists and there could be other products that would be relevant for us to acquire and we are looking for that," he said.
Any deals would most likely be "bolt-ons" rather than anything very large. "In my view we should do smaller deals; low single-digit billions of dollars," he said.
Novo has sat out a rash of deal-making that has gripped the rest of the drugs industry in recent years. Instead, under previous chief executive Lars Rebien Sorensen the company had focused on its market-leading position in making insulin and other diabetes treatments.
But the company's core insulin business has deteriorated recently, with increasing competition squeezing prices, particularly in the United States, sending Novo shares down nearly 40 percent in the past 12 months.
Last month the Danish group warned that sales and profits might actually slip in 2017, a remarkable change in fortune for a company that was previously renowned for its sector-beating growth.
Jorgensen, who began his Novo career more than 25 years ago as a graduate, acknowledges he faces a challenge to reassure investors.
While he believes Novo's existing drug line-up remains strong, in these tougher times the Danish group may increasingly operate like other big drugmakers that routinely make acquisitions to boost growth as key medicines lose momentum.
"We will more and more have to do deals like any other company to make sure we have a broader platform to grow on," Jorgensen said.
Novo's already dominant position in diabetes probably means there are few interesting deal opportunities in that particular area but hemophilia and other blood products is a field of interest, along with obesity.
Novo already has one treatment for obesity, Saxenda, and Jorgensen sees an opportunity to broaden this with further acquisitions, bearing in mind that type 2 diabetes is closely linked to obesity.
Finding such adjacent businesses that will not see Novo stray too far from its core therapy areas is an important consideration, Jorgensen said.
"It is not my ambition to go out and do deals where we would not be bringing significant value in terms of disease understanding, commercial infrastructure or manufacturing. The more of those boxes you can tick the better."
Editing by Greg Mahlich