COPENHAGEN (Reuters) - Shares in Novo Nordisk (NOVOb.CO) opened down 4 percent on Friday after a media report citing anonymous sources said the world’s biggest diabetes drug company mulls axing up to 3,000 staff and dropping its long-term financial targets.
Drug manufacturers face new U.S. legislation aimed at reining in high drug prices. Denmark’s Novo Nordisk said in May that the new rules would cut its 2019 sales by 1-2 percent but kept its long-term operating growth forecast of 5 percent.
According to Danish daily Borsen, the firm is now considering ditching the long-term target due to “uncertain and unpredictable markets”.
Novo, will present the cost-cutting plan when it announces second-quarter results in August, Borsen reported.
“The negative element is the report on the long-term financial target, because if true that would mean something has changed since May,” said Sydbank analyst Soren Lontoft Hansen.
A Novo spokesman contacted by Reuters declined to comment on the report but said the firm regularly adjusts its business according to market conditions.
Novo Nordisk shares were down 2.7 percent at 0719 GMT.
The firm, which employs more than 42,000 people in 79 countries, has struggled to regain investor confidence after it slashed its long-term profit growth forecast twice in 2016 from 15 percent citing U.S. market woes.
It announced 1,000 job cuts in 2016 as competition among insulin producers increased and prices were squeezed by pharmacy benefit managers (PBMs) who administer drug programs for employers and health plans.
Novo, will present the cost-cutting plan when it announces second-quarter results, Borsen reported.
Reporting by Stine Jacobsen; editing by Jason Neely