We issued an updated research report on Novo Nordisk A/S NVO on Jan 2, 2019.
Novo Nordisk has a strong presence in the Diabetes care market with a global value market share of 28%. Also, the company has strong presence in the total insulin market, and modern and new-generation insulin market with a global value market share of 46% and 45%, respectively.
Shares of the company have declined 12.8% in the past year, against the industry’s growth of 6.7%.
Novo Nordisk’s top line is driven by strong performance of products such as Victoza (liraglutide). Victoza is currently the market leader in the GLP-1 segment with a 53% share. Going forward, we expect Victoza to continue being a significant contributor to the company’s top line. In August 2017, the FDA approved a label expansion for Victoza. The drug is now approved to reduce the risk of major adverse cardiovascular (CV) events in adults with type II diabetes and established CV disease.
The FDA approved Ozempic (semaglutide) once-daily pre-filled pen to improve glycaemic control in type II diabetes patients in December 2017. It is also approved in Europe, Japan and Canda for the same indication. Following the FDA's approval of Ozempic, Novo Nordisk engaged in a constructive dialogue with the FDA, focusing on minimizing the need for additional large cardiovascular outcomes trials (CVOTs) to obtain a cardiovascular (CV) indication for Ozempic and the overall number of large cardiovascular outcomes trials necessary for the semaglutide molecule in different formulations.
The company also initiated a phase III PIONEER study in 2016 for oral semaglutide (NN9924) for the treatment of type II diabetes. The company announced headline results from PIONEER 2, 3, 4, and 7, 8 and 5 and 10 studies with oral semaglutide for treatment of adults with type II diabetes in 2018. Across the eight completed PIONEER studies, a consistently strong lowering of blood glucose levels (HbA1c) for the 14 milligram dose of oral semaglutide ranging from 1.1% to 1.8% in patients completing the trials was observed. In November 2018, the company announced headline results from the last global phase IIIa study, PIONEER 6, with oral formulation of Ozempic.
In August 2018, Novo Nordisk acquired all the shares of Ziylo Ltd. Ziylo is a University of Bristol spin-out company, based at Unit DX science incubator in the United Kingdom.
The acquisition gives Novo Nordisk full rights to Ziylo's glucose binding molecule platform to develop glucose responsive insulins (GRIs). Novo Nordisk is focused on this technology to develop this next generation of insulin, which would lead to a safer and more effective insulin therapy.
In October 2018, Novo Nordisk announced the expansion of its biopharm business, with an agreement to acquire the U.S. and Canadian rights to Macrilen (macimorelin), the first and only FDA-approved oral growth hormone receptor indicated for the diagnosis of Adult Growth Hormone Deficiency (AGHD), which is a rare endocrine disorder, from Strongbridge Biopharma Plc. The acquisition of Macrilen is in line with Novo Nordisk’s strategy for its biopharm business, with growth being driven by both organic and bolt-on initiatives.
The company also made some organizational changes aimed at boosting innovation in its R&D organization and redirecting resources in other parts of the organization to drive growth further.
Zacks Rank & Other Stocks to Consider
Novo Nordisk currently carries a Zacks Rank #2 (Buy).
Some better-ranked stocks worth considering are Myriad Genetics, Inc. MYGN, Editas Medicine, Inc. EDIT, and Inovio Pharmaceuticals, Inc. INO. While Myriad sports a Zacks Rank #1 (Strong Buy), Editas and Inovio carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Myriad’s earnings per share estimates have increased from $1.66 to $1.75 for 2018 and from $1.88 to $1.89 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters, with average of 25.62%.
Editas’ loss per share estimates have narrowed from $3.00 to $2.18 for 2018 and from $3.36 to $2.84 for 2019 in the past 60 days.The company delivered a positive earnings surprise in two of the trailing four quarters, with average of 10.85%.
Inovio’sloss per share estimates have narrowed from $1.06 to $1.00 for 2018 and from $1.09 to $1.06 for 2019 in the past 60 days.The company delivered a positive earnings surprise in three of the trailing four quarters, with average of 21.11%.
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