) recently faced a setback when the US Food and Drug
Administration (FDA) declined to approve its diabetes candidates,
Tresiba (insulin degludec) and Ryzodeg (insulin degludec/insulin
aspart), on the basis of the submitted data.
BAYER A G -ADR (BAYRY): Free Stock Analysis
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The FDA issued a complete response letter (CRL) asking Novo
Nordisk to conduct a dedicated cardiovascular outcomes study and
provide additional cardiovascular data.
Moreover, the FDA said that it will not grant approval to these
candidates until the company resolves the issues mentioned in a
warning letter given by the FDA in Dec 2012. The warning letter
specified violations of current good manufacturing practice
(CGMP) regulations for finished pharmaceuticals at the company's
Novo Alle, Bagsvaerd Denmark facility.
Meanwhile, we note that both Tresiba and Ryzodeg are approved in
Japan, the EU and Mexico. In the EU, Novo Nordisk is planning to
launch Tresiba first and Ryzodeg a year later. Tresiba and
Ryzodeg will be available in Novo Nordisk's latest prefilled
insulin pen named FlexTouch in Europe. Tresiba will initially be
launched in the UK and Denmark in the first half of 2013 and in
other European markets throughout 2013 and 2014.
We are discouraged by the CRL issued by the FDA. Considering Novo
Nordisk's statement that it will not be in a position to provide
the required data in 2013, we expect a significant delay in the
US approval of Tresiba and Ryzodeg. The US approval of Tresiba
and Ryzodeg would have strengthened Novo Nordisk's diabetes
franchise. We expect shares to react negatively to the news.
Novo Nordisk currently carries a Zacks Rank #1 (Strong Buy).
Other large-cap pharma companies like
Eli Lilly and Company
) also look well-positioned. All three companies are Zacks Rank
#2 (Buy) stocks.