Novo Nordisk A/S NVO announced that it has acquired all of the shares of Ziylo Ltd. Ziylo is a University of Bristol spin-out company based at Unit DX science incubator in the United Kingdom. Total payments under the agreement could exceed $800 million upon the achievement of certain development, regulatory and sales milestones by Novo Nordisk.
The acquisition gives Novo Nordisk full rights to Ziylo's glucose binding molecule platform to develop glucose responsive insulins (GRIs). Novo Nordisk is focused ondeveloping this technology in order to develop this next generation of insulin, which would lead to a safer and more effective insulin therapy.
A GRI will help in eliminating the risk of hypoglycaemia, which is the main risk associated with insulin therapy and one of the main barriers to achieving optimal glucose control. Thus, a GRI will also lead to better metabolic control as well as reduce the burden of diabetes for people living with the disease.
Before the acquisition, parts of the research activities in Ziylo have been spun out to a new company, Carbometrics that has entered into a research collaboration with Novo Nordisk to optimize glucose binding molecules. Carbometrics has licensed rights to develop non-therapeutic applications of glucose binding molecules with a focus on developing continuous glucose monitoring applications. It will remain on the Unit DX site in Bristol.
Shares of Novo Nordisk have declined 11.6% year to date compared with the industry 's growth of 4.8%.
We note that Novo Nordisk has a strong presence in the Diabetes care market with a global value market share of 27%. Also, the company has a strong presence in the total insulin market, and modern and new-generation insulin market with a global value market share of 46% and 45%, respectively.
Novo Nordisk has been entering into agreements with various companies in order to strengthen its portfolio. In April 2018, the company inked a global license deal with biotech company EpiDestiny for sickle cell disease (SCD) program, EPI01.
Novo Nordisk A/S Price
Novo Nordisk A/S Price | Novo Nordisk A/S Quote
Zacks Rank & Stocks to Consider
Novo Nordisk has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Gilead Sciences Inc. GILD , Celgene Corp. CELG and Vertex Pharmaceuticals VRTX . While Gilead and Celgene carry a Zacks Rank #1 (Strong Buy), Vertex carries Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Gilead's earnings per share estimates have increased from $6.15 to $6.57 for 2018 and from $6.33 to $6.48 for 2019 over the past 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 6.43%. The stock has rallied 1.8% so far this year.
Celgene's earnings per share estimates have increased from $8.54 to $8.76 for 2018 and from $10.19 to $10.60 for 2019 over the past 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 2.38%.
Vertex's earnings per share estimates moved up from $3.15 to $3.74 for 2018 and from $4.37 to $4.59 for 2019 in the last 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 27.5%. Share price of the company has increased 17.5% in a year.
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