COPENHAGEN, May 3 (Reuters) - Shares in Novo Nordisk, the world's biggest maker of diabetes drugs, surged on Wednesday as the Danish firm beat operating profit forecasts for the first quarter and nudged up its full-year target.Analysts had expressed concerns that U.S. pharmacy benefit managers' demands for bigger discounts, along with President Donald Trump's attacks on drug companies' prices, could weakenNovo's forecast.Novo Nordisk said new products in diabetes and obesity care had helped drive first-quarter sales, allaying investors' fears of growing competition and squeezed margins in the all-important U.S. market.The share price was up7% Wednesday morning."All-in-all, this quarter offers significant sentiment relief and given the guidance nudge, we would expect consensus to increase 1-2 percent on EPS for the FY," Deutsche Bank analysts said in a research note.The company narrowed the range of its 2017 sales growth forecast to 0 to 3 percent from a previous range of -1 to 4 percent, but lifted its operating profit forecast to a range of -1 to 3 percent from -2 to 3 percent, both in local currencies."When we lift the lower end of the range it is mainly because now we are four months into the year and we have not been exposed to any change in the political environment, hence the risk is lower," Chief Executive Lars Fruergaard Jorgensen said.Novo's first-quarter operating profit rose 10 percent to 13.5 billion Danish crowns ($1.9 billion) beating an average forecast of 12.0 billion crowns in a Reuters poll of analysts."Sales were driven by our new, innovative products within diabetes and obesity care, and we are seeing the effects of our cost control initiatives," said Jorgensen, who took over as CEO on Jan. 1.In September the company initiated its first-ever broad savings initiative in a bid to offset the increasing discounts demanded by pharmacy benefit managers, who administer drug programmes for health plans.Fierce competition and pricing pressureNovo's main rivals in the diabetes market are Sanofi and Eli Lilly, and the competition remains fierce.In the market for GLP-1 drugs Novo's Victoza is losing market share to Lilly's Trulicity drug, Jorgensen said. However, as the market expanded Victoza sales still rose 22 percent in the first quarter, beating analysts' forecasts.GLP-1 is an imitation of an intestinal hormone that stimulates the production and absorption of insulin, and is used for patients who can still produce some insulin.Novo is currently negotiating price concessions with U.S. pharmacy benefit managers in a bid to retain its positions for next year."It is apparent that there will continue to be pricing pressure, also in 2018. It is at this point in time too early to give an indication of that level," Jorgensen said."We have indicated that 2018 probably will have a pressure on prices to the tune of 2-3 percent and I see no reason for changing that". ($1 = 6.8052 Danish crowns)SEE ALSO:One in 7 people in Nevada is living with diabetes, and the state is now pushing a new approach to tackle the cost of treatmentJoin the conversation about this storyNOW WATCH: The disturbing reason some people turn red when they drink alcohol
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