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The news from Denmark's sizable pharmaceuticals sector has been suitably Nordic Noir recently. H Lundbeck, beset by patent expiry woes, had the mother of all profit warnings at the end of last year. And Novo Nordisk got a "don't call us, we'll call you" note from the U.S. Food and Drug Administration in February, asking for more tests for Tresiba, its insulin drug on which great hopes are pinned. The setbacks sent the shares of both companies down sharply. But time moves on. First-quarter numbers on Wednesday suggest that they are over the worst.

The thing about Novo Nordisk is the strength of its core business, which is insulin and diabetes treatments. That enabled the group to report profit up more than a quarter to 20 billion kroner ($3.5-billion) in the three months to March. The risk is that Tresiba gets delayed again by the complexity of the clinical trials being sought by the FDA. It is unlikely to be on the market before 2017 in the U.S.; a worst-case scenario could push that back to 2020 (the drug is on sale in Europe and Japan). That could allow competitors such as Sanofi and Eli Lilly, with their own diabetes treatments, to gain a significant commercial advantage.

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Novo Nordisk's shares are 7 per cent below their February level but they still retain their premium to the wider sector. That could erode for as long as the FDA sits in judgment.

Lundbeck's predicament is more acute. An agreement in March with Otsuka of Japan on an experimental Alzheimer's treatment, under which Lundbeck could receive revenue of up to $825-million (U.S.), was a significant boost after the profit warning; its shares have recovered all of their losses and then some – they now trade 20 per cent above their pre-warning level. Even if management was being too conservative in its revisions, that sort of recovery looks a bit overdone given the doubts that have entered the equation about Lundbeck.

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