Novo Nordisk A/S Right this moment
(As of 12/18/2024 05:45 PM ET)
- 52-Week Vary
- $99.42
▼
$148.15
- Dividend Yield
- 0.68%
- P/E Ratio
- 34.29
- Worth Goal
- $150.40
Current gross sales of a little-known inventory, Madrigal Prescription drugs NASDAQ: MDGL, might bode nicely for Novo Nordisk A/S NYSE: NVO. The pharma business large has seen explosive gross sales development for its GLP-1 agonist drug, semaglutide. Marketed by way of the names Ozempic and Wegovy, gross sales of the medicine grew 32% and 76% by way of the primary 9 months of 2024, in comparison with the identical 2023 interval.
Nonetheless, shares of Novo Nordisk have fallen significantly because the all-time highs they reached in the course of 2024. Now, the inventory has supplied a complete return of simply 5% on the yr, as of the Dec. 17 shut. A lot of this has been as a result of additional scientific outcomes that confirmed stronger weight reduction efficacy for Zepbound. It’s the GLP-1 agonist drug bought by Novo’s prime competitor, Eli Lilly NYSE: LLY. I’ll break down the autumn from grace that Novo shares have skilled within the second half of 2024. I’ll then clarify different scientific and monetary outcomes that might assist reignite Novo shares.
Semaglutide Going through Destructive Information on A number of Fronts
In mid-2024, a research examined Novo’s semaglutide towards Eli Lilly’s Zepbound, often known as tirzepatide. The purpose was to see which drug resulted in a bigger quantity of weight reduction. Sufferers who took tirzepatide misplaced extra weight than these on semaglutide at each measured interval. After 12 months, sufferers taking Lilly’s drug noticed practically 7% extra weight reduction than these taking Novo’s. In December, researchers launched additional information confirming these findings. This information has been a darkish cloud hanging over Novo shares. They’ve dropped 24% since researchers launched the research in July, as of the Dec. 17 shut.
Clearly, markets are involved about Novo’s means to maintain up the gross sales development of its GLP-1 when an apparently superior remedy exists. Additionally, there’s a lot chatter in regards to the drug being topic to Medicare worth negotiations. This may decrease the value of the drug, decreasing the quantity of income Novo might obtain from every Medicare affected person. In the meantime, market commentators don’t appear to consider Zepbound should endure the identical scrutiny.
MASH: A Potential Subsequent Frontier for Semaglutide
Though Novo and Lilly’s drug is at present solely authorised to deal with weight problems and diabetes, the businesses are regularly researching them to deal with different circumstances. This contains metabolic dysfunction-associated steatohepatitis (MASH). This can be a illness the place fats builds up within the liver, resulting in scarring and cirrhosis if left untreated. It’s completely different from alcoholic steatohepatitis (ASH). The liver injury will not be as a result of extreme alcohol use. For that reason, it’s also known as non-alcoholic steatohepatitis (NASH). There have been no Meals and Drug Administration (FDA) remedies authorised for MASH till lately.
Novo Nordisk A/S Inventory Forecast Right this moment
$150.40
41.94% UpsidePurchase
Based mostly on 7 Analyst Rankings
| Excessive Forecast | $160.00 |
|---|---|
| Common Forecast | $150.40 |
| Low Forecast | $120.00 |
Madrigal Prescription drugs obtained FDA approval for its MASH remedy in March. Since then, gross sales have been exploding. Revenues from the MASH drug Rezdiffra grew by over 400% from Q2 of this yr to Q3. The $62 million in gross sales crushed consensus projections on Wall Avenue by 83%. Now, some analysts are projecting gross sales of the drug to prime $500 million in 2025. By 2030, analysts at Consider anticipate Rezdiffra gross sales to prime $3 billion. They see all the MASH remedy market price practically $10 billion a yr.
Part 3 trial outcomes recommend that Novo might take a big a part of this market. The MASH trials’ most important targets are to enhance liver fibrosis and resolve steatohepatitis with out worsening both situation in folks with MASH. Researchers examine this to a placebo. In sufferers who took semaglutide, there was a 17% higher charge of attaining each endpoints in comparison with the placebo group. The distinction between sufferers who took Rezdiffra was simply 12%. This factors to a attainable efficacy benefit in comparison with Rezdiffra.
MASH Approval May Assist Change the Narrative Round Semaglutide
With these outcomes, Novo plans to file for regulatory approval of semaglutide to deal with MASH within the first half of 2025. It’s going to accomplish that each in Europe and america. This might make the corporate’s drug the second to enter the MASH market.
Given Rezdiffra’s explosive gross sales development, Novo might obtain the identical final result if authorities approve its drug. Success on this multi-billion-dollar market could possibly be a shot within the arm for Novo’s worth. It will assist the sentiment round semaglutide, given latest negativity. Nonetheless, Novo might want to preserve innovating within the weight reduction market to keep up its dominant place over Eli Lilly and different rivals. Novo nonetheless maintains a 65% market share in world GLP-1 quantity.
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