Novo Nordisk Presents Data (ALKS) (AMLN) (LLY) (MRK) (NVO)

Recently, Novo Nordisk (NVO) presented data from two extension studies of its lead diabetes drug Victoza at the American Diabetes Association. Victoza is currently marketed as a once-daily human Glucagon-Like Peptide- 1 (GLP-1) analogue for the treatment of type II diabetes.

The first study showed that treatment with Victoza (once daily) in combination with metformin and/or sulfonylurea caused more patients to achieve control over their blood sugar levels compared to those treated with other commonly used diabetes drugs like Merck’s (MRK) Januvia and Amylin Pharmaceuticals’ (AMLN) Byetta. Moreover, data also revealed that patients underwent significant weight loss on switching over to Victoza therapy from Januvia.

Novo Nordisk also presented data from another late stage study which investigated the effect of adding Levemir to the existing treatment regimen of Victoza and metformin. Data revealed that more patients treated with the combination reached and maintained the targeted blood sugar levels with a low frequency of hypoglycemia. Hypoglycemia refers to the situation of abnormally low levels of glucose in the blood.

Our Recommendation

We currently have a Neutral recommendation on Novo Nordisk. The stock carries a Zacks #3 Rank (short-term “Hold” recommendation). Novo Nordisk holds an impressive market share of the global insulin market. We are impressed by Victoza’s performance thus far. Victoza is doing well both in the US and Europe. Moreover, we believe that the diabetes pipeline candidates, Degludec and DegludecPlus, also hold significant importance for long-term growth at Novo Nordisk. We are in particular encouraged by data from Degludec trials.

However, the impending competition from Bydureon, which has been co-developed by Amylin Pharmaceuticals, Eli Lilly and Company (LLY) and Alkermes Inc. (ALKS), concerns us. We prefer to remain on the sidelines until we get better visibility on the performance of Bydureon on hitting the markets and its subsequent impact on Victoza sales.