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Why is Novo Nordisk Stock Up More Than 50% in Past Year?

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Shares of Novo Nordisk (NVO - Free Report) have surged 55.4% in the past year, outperforming the 18% increase registered by the industry. Here we analyze the factors that led to the rally.

Last year has been quite eventful for the company as it gained regulatory approvals for some key pipeline candidates. In September 2017, the FDA approved Fiasp, Novo Nordisk’s fast-acting insulin aspart, for the treatment of adults with diabetes. The same was also approved in Norway, Iceland, the EU and Canada in January 2017.

In December 2017, the FDA approved Ozempic/semaglutide, the company’s once-daily pre-filled pen to improve glycaemic control in type II diabetes patients. Last week, Health Canada also approved to Ozempic. The European regulatory authorities adopted a positive opinion recommending marketing authorization for Ozempic on Dec 15.

In May 2017, Novo Nordisk received the FDA approval for its Biologics License Application (BLA) for Rebinyn (Coagulation Factor IX (Recombinant), GlycoPEGylated) for the treatment of adults and children with hemophilia B. This was followed by the European Commission granting marketing authorisation to Refixia (the brand name for N9-GP in Europe) for the treatment of adolescents and adults with the same indication.

Novo Nordisk’s key revenue generating drug, Victoza, also received an approval from the FDA, which expanded its label to include the cardiovascular indication based on data from the LEADER trial. The European commission has also included the LEADER data in the label for Victoza. Notably, Victoza is now the only GLP-1 in the EU with a label that includes prevention of cardiovascular events. This, in turn, should boost the drug's revenues.

In 2018, all these new products and line extensions of marketed drugs are anticipated to give a boost to the company’s top line.

Novo Nordisk A/S Price

Zacks Rank & Key Picks

Novo Nordisk carries a Zacks Rank #2 (Buy). Some other stocks worth considering from the health care space are Exelixis, Inc. (EXEL - Free Report) , XOMA Corporation (XOMA - Free Report) and Sucampo Pharmaceuticals . While Exelixis sports a Zacks Rank #1 (Strong Buy), XOMA and Sucampo carry a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis’ earnings per share estimates have moved up from 72 cents to 73 cents for 2018 in the last 60 days. The company delivered a positive earnings surprise in all the last four quarters, with an average beat of 572.92%. Share price of the company surged 66.7% in 2017.

XOMA’s loss per share estimates have narrowed from $1 to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company skyrocketed 597.5% in 2017.

Sucampo’s earnings per share estimates have moved up from 3 cents to $1.12 for 2017 and from $1.15 to $1.19 for 2018 in the last 60 days. The company delivered a positive earnings surprise in three of the last four quarters, with an average beat of 15.63%. Share price of the company has surged 47.4% in 2017.

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