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Analyst Blog

Novo Nordisk recently announced data from the post-hoc analysis of two phase III b studies on Victoza (liraglutide) in patients suffering from type II diabetes. While one study evaluated patients treated with Victoza versus those treated with Merck’s Januvia, the other evaluated patients on Victoza versus those on Bristol-Myers’ Byetta.

Results from the studies showed that a higher number of patients achieved the study target (HbA1c<7%) for the first time at each time point (12, 20 and 26 weeks of treatment) on being treated with Victoza (once daily) versus Januvia (once daily) or Byetta (twice daily).

Novo Nordisk also reported data from another post-hoc analysis in type II diabetes patients. The results from the analysis showed that a higher proportion of patients on Victoza and metformin, with baseline HbA1c less than 8.0%, achieved HbA1c targets than those on Januvia and Byetta.

We note that Victoza is a once-daily human glucagon-like peptide-1 (GLP-1) analogue approved for improving blood sugar (glucose) levels in adult type II diabetes patients along with lifestyle management. The drug is approved and launched in more than 50 countries including the US.

We note that the GLP-1 market is getting pretty crowded. Existing companies in this market include Merck, Bristol-Myers and Sanofi , among others.

Our Recommendation

We are encouraged by the performance of Victoza in the US and Europe since launch. Victoza revenues were up 74% year over year in the first nine months of 2012.

We have an Outperform recommendation on Novo Nordisk. The stock carries a Zacks #1 Rank (Strong Buy rating) in the short term.x

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