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Novo Nordisk A/S (NVO - Free Report) received favorable news with the FDA approving its new drug application for Xultophy 100/3.6. Xultophy 100/3.6 is approved as an adjunct to diet and exercise to improve glycemic control in adults with type II diabetes mellitus who have inadequately controlled their disease on basal insulin (less than 50 units daily) or Victoza (liraglutide; less than or equal to 1.8 mg daily).

Xultophy 100/3.6 is a once-daily, single injection, fixed combination of Tresiba (insulin degludec) and Victoza and can be taken at the same time each day with or without food. It will be available in a prefilled pen.

Novo Nordisk is looking forward to launch it in the U.S. in the first half of 2017.

We remind investors that the FDA had extended the review period of the company’s NDA for Xultophy 100/3.6 by three months in Sep 2016.

We note that Novo Nordisk is going through a rough patch as several drugs in its portfolio are losing patent protection. It is also facing a risk from biosimilars in the human growth hormone market and pricing pressure for some of its drugs. The company anticipates continually strong performance of modern insulins, Tresiba and Victoza, as well as higher contributions from Saxenda and Xultophy.

Novo Nordisk currently carries a Zacks Rank #4 (Sell).

NOVO-NORDISK AS Price

Stocks to Consider

Some better-ranked stocks in the healthcare sector include Incyte Corporation (INCY - Free Report) , Anika Therapeutics (ANIK - Free Report) and Arbutus Biopharma Corporation (ABUS - Free Report) . Arbutus sports a Zacks Rank #1 (Strong Buy), while Incyte and Anika carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte’s earnings estimates increased from 20 cents to 68 cents for 2016 and from $1.42 to $1.68 for 2017 over the last 60 days. The company posted a positive average beat of 431.43% over the last four quarters.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted positive surprises in the four trailing quarters with an average beat of 33.14%. Its share price has gained 21% year to date.

Arbutus’s loss estimates narrowed from $2.15 to $1.74 for 2016 and from $1.96 to $1.51 for 2017 over the last 60 days. The company posted positive surprises thrice in the four trailing quarters with an average beat of 59.31%.

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