Novo Nordisk A/S (NVO - Free Report) accepted a fine worth DKK 500,000 levied by the public prosecutor in a suit filed by the Danish Financial Supervisory Authority against the company. In Dec 2013, the Danish Financial Supervisory Authority had reported against Novo Nordisk, regarding the company’s receipt of a Complete Response Letter (CRL) from the FDA on Feb 8, 2013.
We remind investors that in Feb 2013 the FDA had declined to approve Novo Nordisk’s Tresiba and Ryzodeg on the basis of the data submitted by the company. The FDA had then issued a CRL asking Novo Nordisk to conduct a dedicated cardiovascular outcomes study and provide additional cardiovascular data.
According to the Danish Financial Supervisory Authority, Novo Nordisk had violated its obligation under Section 27 (1) of the Danish Securities Trading Act, which mandated the disclosure of inside information as soon as possible. The Danish Financial Supervisory Authority and the public prosecutor claimed that Novo Nordisk should have issued a company announcement on the evening of Feb 8, 2013, stating the FDA’s decision.
However, Novo Nordisk maintained that the delay in issuing a public notification of the FDA’s decision was due to the conducting of a detailed analysis of the implications of the decision. With the company’s acceptance of the fine, the case has been settled. Novo Nordisk stated in its press release that it has accepted the fine in order to avoid a lengthy lawsuit and preserve company resources.
Meanwhile, Novo Nordisk initiated a cardiovascular outcomes study (DEVOTE) on Tresiba in Oct 2013. We are encouraged by the company’s progress in the study so far. Patient enrolment in the study should be completed within the next six months. The company intends to file an NDA for both Tresiba and Ryzodeg in the first half of 2015.
Novo Nordisk carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Allergan Inc. (AGN - Free Report) , Mallinckrodt plc (MNK - Free Report) and AstraZeneca plc (AZN - Free Report) . While Allergan and Mallinckrodt carry a Zacks Rank #1 (Strong Buy), AstraZeneca holds a Zacks Rank #2 (Buy).