The US Food and Drug Administration's (FDA) Endocrinologic and
Metabolic Drugs Advisory Committee recently issued a positive
opinion on the New Drug Applications (NDA) for
Novo Nordisk
's (
NVO
) insulin degludec and insulin degludec/insulin aspart. Insulin
degludec is a next-generation, once-daily basal insulin, for the
treatment of type I and type II diabetes.
The committee was unanimously in favor of a cardiovascular
outcomes trial being conducted. The committee voted 8-4 in favor
of granting approval to the candidates with a commitment to
conduct a post-approval outcomes trial.
Novo Nordisk mentioned in its press release that the FDA has
not yet informed when the review process of these candidates will
be completed. Although the FDA is not bound to follow the
advisory committee's opinion, the US regulatory body generally
does so.
We note that in October this year, the Committee for Medicinal
Products for Human Use (CHMP) of the European Medicines Agency
(EMA) also recommended the approval of Novo Nordisk's insulin
degludec (Tresiba) and insulin degludec/insulin aspart (Ryzodeg)
in the European Union (EU). A final decision on the approval of
the candidates is expected from the European Commission by year
end.
While the candidates are under review in the EU and the US,
they were approved by the Japanese Ministry of Health, Labour and
Welfare (MHLW) in September 2012. The Japanese approval marked
the first approval for Tresiba. The candidate is also under
regulatory review in several countries including Switzerland,
Canada, South Africa, India, Australia, Brazil, Mexico and
Russia.
Our Recommendation
Even though Novo Nordisk has a robust portfolio of modern
insulin analogues, which includes NovoRapid, NovoMix and Levemir,
it is heavily reliant on the approval of Tresiba and Ryzodeg for
long-term growth. Currently, one of the most commonly prescribed
insulins is
Sanofi
's (
SNY
) Lantus (insulin glargine).
We have an Outperform recommendation on Denmark-based Novo
Nordisk. The stock carries a Zacks #1 Rank (Strong Buy rating) in
the short term. We expect investor focus to remain on the
regulatory process of insulin degludec and insulin
degludec/insulin aspart.
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