) recently announced that it is planning to initiate a phase III
global development program, SUSTAIN, for its type II diabetes
candidate, semaglutide. Novo Nordisk expects to begin the first
phase III study in this program in the first half of 2013. More
than 8,000 patients are expected to be enrolled in the SUSTAIN
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Semaglutide is a once-weekly human glucagon-like peptide-1 (GLP-1)
analogue. Before moving the candidate into late-stage studies, the
company decided to conduct phase I trials comparing semaglutide
with a once-weekly formulation of Victoza (liraglutide). This trial
was conducted to assess and select the better candidate for phase
In the phase I trials, while once-weekly Victoza demonstrated a
better safety profile, semaglutide was found to be more promising
for once-weekly dosing. As a result, Novo Nordisk has decided to
develop semaglutide further and harbors no plans to advance the
once-weekly formulation of Victoza.
We note that Victoza is a once-daily human GLP-1 analogue approved
for improving blood sugar (glucose) levels in adult type II
diabetes patients along with lifestyle management.
We note that the GLP-1 market is getting pretty crowded. Existing
products beside Victoza include
) Bydureon and Byetta. Moreover, several GLP-1 candidates are in
late-stage development stage like
) albiglutide and
We have a Neutral recommendation on Novo Nordisk. The stock carries
a Zacks #3 Rank (Hold rating) in the short term.
So far, we are impressed by the performance of Victoza, which is
doing well both in the US and Europe. Moreover, we believe that the
next-generation insulin analogues, Tresiba and Ryzodeg, hold
significant potential for long-term growth at Novo Nordisk. Though
we are encouraged by data from the Tresiba trials, we prefer to
remain on the sidelines until Tresiba and Ryzodeg gain approval.