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Novo Nordisk (NVO) Semaglutide Gets FDA Nod for Obesity

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Denmark-based Novo Nordisk A/S (NVO - Free Report) announced that the FDA has approved its diabetes medicine, semaglutide as a weekly 2.4 mg injection for weight management in people living with obesity. The GLP-1 product will be marketed by the brand name of Wegovy for chronic weight management in adults with obesity (initial BMI≥30 kg/m2) or overweight (initial BMI≥27 kg/m2) with at least one weight-related comorbidity, such as high blood pressure, type II diabetes, or high cholesterol.

The approval was based on data from the phase IIIa STEP study, which enrolled around 4,500 adults with overweight or obesity. Data from the study showed that people with obesity and without type II diabetes, experienced an average weight loss of 17-18% sustained over 68 weeks. The drug is expected to be launched in the United States later this month. Obesity and overweight is a serious health issue in the United States, affecting approximately 70% of American adults 

Shares of Novo Nordisk have risen 15.9% so far this year compared with the industry’s increase of 5.5%.

 

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Semaglutide is presently approved by the trade name of Ozempic as a once-daily pre-filled pen to improve glycemic control in type II diabetes patients. It was also approved as an oral tablet by the brand name of Rybelsus in September 2019 in the United States and is now launched in 15 countries. In January 2020, the drug was approved in the United States for cardiovascular risk reduction in people with type II diabetes and established cardiovascular diseases. Both Ozempic and Rybelsus witnessed strong uptake in the first quarter of 2021, somewhat making up for lower sales of Novo Nordisk’s older diabetes medicine, Victoza. Ozempic sales rose 52% at constant exchange rate while Rybelsus sales were up 247% in the first quarter of 2021.

Novo Nordisk is a key player in the diabetes market. However, the market is quite crowded with Sanofi (SNY - Free Report) , Lilly (LLY - Free Report) and Merck (MRK - Free Report) being dominant players. Lilly has a dual GIP and GLP-1 receptor agonist, tirzepatide, in its diabetes pipeline, which it is evaluating in late-stage studies for obesity.

Novo Nordisk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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