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Novo Nordisk Inks Deal With Dicerna to Develop RNAi Therapies

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Novo Nordisk A/S (NVO - Free Report) and biotech company Dicerna Pharmaceuticals, Inc. inked an agreement to discover and develop novel therapies for the treatment of liver-related cardio-metabolic diseases using Dicerna’s proprietary GalXC RNAi platform technology.  Novo Nordisk will make upfront payment of $175 million to Dicerna. Dicerna is also entitled to receive an equity investment of $50 million.

Shares of Novo Nordisk have gained 23.8% compared with the industry’s growth of 4.7%.

The companies will collaborate on more than 30 liver-cell targets, leveraging Dicerna’s proprietary GalXC RNAi platform technology, with the goal of delivering multiple clinical candidates. Novo Nordisk is making a considerable investment and in turn will be able to access Dicerna's proprietary GalXC RNAi platform, which complements its existing technology base. The collaboration provides Novo Nordisk with the capability to inhibit hepatocyte targets involved in disease regulation and the potential to generate a number of clinical development candidates.

The companies will target diseases like chronic liver disease, non-alcoholic steatohepatitis (NASH), type II diabetes, obesity and rare diseases. Dicerna will conduct and fund the discovery and preclinical development to clinical candidate selection for each liver-cell target, and Novo Nordisk will be responsible for all further developments.

Novo Nordisk will lead programs targeting cardio-metabolic disorders and other indications, with Dicerna having the option to opt into two programs during clinical development. Dicerna will retain the rights to initiate two new orphan liver disease programs, in which Novo Nordisk can opt. For all co-development programs, the companies will share the profit or loss of net sales of products, consistent with each company’s contribution to the development costs.

Per the agreement, Dicerna is eligible to receive an additional $75 million over the first three years, plus up to $357.5 million per target in potential milestone payments and royalties on product sales.

Zacks Rank & Other Stocks to Consider

Novo Nordisk currently carries a Zacks Rank #2 (Buy).

Few other similar-ranked stocks in the same space are GlaxoSmithKline Plc. (GSK - Free Report) , Merck and Co. (MRK - Free Report) and Bristol-Myers Squibb Company (BMY - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Glaxo’s’ earnings per share estimates have increased from $2.96 to $3.08 for 2019 and from $3.01 to $3.02 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 17.23% on average.  

Merck’s earnings per share estimates have increased from $4.91 to $5.16 for 2019 and from $5.43 to $5.52 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 12.51% on average.  

Bristol-Myers Squibb’s earnings per share estimates have increased from $4.29 to $4.33 for 2019 and from $5.17 to $5.30 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 8.30% on average.

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