Novo Nordisk A/S today
(as of 10:27 AM ET)
- 52-week range
- $99.42
▼
$148.15
- Dividend yield
- 0.66%
- P/E ratio
- 35.10
- Price target
- $150.40
A recent sale of a little-known stock, Madrigal Pharmaceuticals NASDAQ: MDGLCan indicate good for Novo Nordisk A/S NYSE: NVO. The Pharma industry The giant has seen explosive sales growth for its GLP-1 agonist drug, semaglutide. Marketed under the names Ozempic and Vegovi, sales of the drugs rose 32% and 76% in the first nine months of 2024, compared to the same period in 2023.
However, the shares of Novo Nordisk have fallen significantly Because they have reached the highest level In mid-2024. Now, the stock has delivered a total return of just 5% in the year to the end of December 17. Much of this is due to other clinical results showing strong weight loss efficacy for ZapBound. It is a GLP-1 agonist drug marketed by Novo’s top competitor, Eli Lilly NYSE: LLY. I would break the fall from grace experienced by Novo shares in the second half of 2024. I’ll then explain other clinical and financial results that could help revive Novo shares.
Semaglutide is facing negative news on several fronts
In mid-2024, a study tested Novo’s semaglutide Against Eli Lilly’s ZapboundAlso known as tirzepetide. The goal was to see which drug resulted in the greatest amount of weight loss. Patients who took tirzepetide gained more weight than patients who took semaglutide at every measured interval. After 12 months, patients taking Lilly’s drug lost about 7% more weight than those taking Novo. In December, researchers released more data confirming these findings. The news cast a dark cloud over Novo’s shares. Since the researchers released the study in July, they have declined by 24% as of December 17.
Clearly, markets are concerned about Novo’s ability to continue its GLP-1 sales growth when a clearly superior treatment exists. Also, there is a lot of nonsense about the drug being subject to Medicare price negotiation. This would lower the price of the drug, reducing the amount of revenue Novo receives from each Medicare patient. Meanwhile, market commentators don’t believe Zapbound will face the same scrutiny.
MASH: A Potential Next Frontier for Semaglutide
Although Novo and Lilly’s drug is currently only approved to treat obesity and diabetes, the companies are constantly researching treatments for other conditions. This includes metabolic dysfunction-associated steatohepatitis (MASH). It is a disease where fat builds up in the liver, which can lead to scarring and cirrhosis if left untreated. This is different from alcoholic steatohepatitis (ASH). Liver damage is not caused by excessive alcohol consumption. For this reason, it is also called nonalcoholic steatohepatitis (NASH). Until recently there were no Food and Drug Administration (FDA) approved treatments for MASH.
Novo Nordisk A/S stock forecast today
$150.40
Up 38.53%buy
Based on 7 analyst ratings
| High forecast | $160.00 |
|---|---|
| Average forecast | $150.40 |
| Less predictable | $120.00 |
Madrigal Pharmaceuticals received FDA approval for its MASH treatment in March. Since then, sales have been exploding. Revenue from MASH drug Rezdiffra grew more than 400% from Q2 to Q3 this year. $62 million in sales Consensus estimates crushed on Wall Street By 83%. Now, some analysts are projecting drug sales to top $500 million in 2025. By 2030, analysts of the assessment Rezdifra’s sales are expected to top $3 billion. They see the entire MASH treatment market as worth about $10 billion a year.
The results of the Phase 3 trial suggest that Novo can capture a large share of this market. The main goals of the MASH trials are to improve liver fibrosis and resolve steatohepatitis in people with MASH without worsening the condition. Researchers compared it to a placebo. In patients taking semaglutide, C A 17% higher rate to achieve both endpoints compared to the placebo group. The difference was only 12% in patients taking Rezdifra. This points to a potential efficacy advantage over Rezdifra.
Approval of MASH may help change the narrative around semaglutide
With these results, Novo plans to file for regulatory approval of semaglutide for the treatment of MASH in the first half of 2025. It will do so in both Europe and the United States. This would make the company’s drug MASH the second to enter the market.
Given Rezdifra’s explosive sales growth, Novo could achieve the same result if regulators approve its drug. Success in this multi-billion-dollar market could be a shot in the arm for Novo’s value. This will help the sentiment around semaglutide, given the recent negativity. Still, Novo will need to keep innovating in the weight loss market to maintain its dominance over Eli Lilly and other competitors. Novo still Maintains 65% market share In global GLP-1 volume.
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