Novo Nordisk: reality check - FT.com There goes the visibility premium. Novo Nordisk has stood out from rivals in recent years because its growth has been so stellar and so - well, visible. The Danish group is the undisputed leader in diabetes, with nearly half the global market for insulin and about a quarter for all types of diabetes treatment. The imminent launch of Tresiba, a new, long-lasting insulin drug, was to cement that dominance. Novo estimates that spending on diabetes accounted for 11 per cent of global healthcare costs in 2011. Then along comes the US Food and Drug Administration with a reality check. The FDA has told Novo that it cannot approve Tresiba until further cardiovascular tests have been done. That sent Novo's shares down 13 per cent yesterday. Chief executive Lars Sorensen says it may be some years before the tests can be carried out, delaying Tresiba's launch in the US market until at least 2015/16. A much earlier arrival with optimistic sales assumptions - the drug is considered a potential blockbuster - had been priced in, so the share price tumble is understandable. Tresiba is hardly finished. It is being marketed in Europe and has been approved for sale in Japan. Novo's predicted 8 to 11 per cent growth in 2013 sales and 10 per cent in operating profit looks intact, too. But the postponement of Tresiba's debut in the world's biggest and most profitable drug market is still a setback. The US accounted for two-thirds of the growth in the group's 2012 sales of DKr80bn. The challenge for Novo is to maintain its growth rate while awaiting FDA approval. Much of the investor fan club is related to its record of converting earnings to cash and handing it back through dividends and share repurchases. That added to Novo's visibility premium - its shares have typically traded at twice the pharmaceutical sector's forward earnings average. The threat is that rivals such as Sanofi and Eli Lilly, with big investments in diabetes treatments, will jump ahead of Novo in the US. If that happens, Novo's visibility premium is at risk of vanishing.