Novo Nordisk Poised on Strong Pipeline Amid Competition

Shutterstock photo

We issued an updated research report on Novo Nordisk NVO on Mar 20.

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 47% and 45%, respectively. The company has one of the broadest diabetes portfolios in the industry.  A solid performance of Tresiba, Victoza, Saxenda and NovoRapid in 2017 has kept the company on a growth trajectory.

Novo Nordisk's top line is driven by strong performance of products such as Victoza (liraglutide). Victoza is a once-daily human GLP-1 analogue approved for adult type II diabetes. Victoza is currently the market leader in the GLP-1 segment with a 50% share. We expect Victoza to continue being a significant contributor to the company's top line.

Shares of the company have moved up 49% over a year compared with the industry 's gain of 8.1%.

We are encouraged by the company's efforts to develop new treatments for diabetes, which is its core area of expertise.  In 2017, the company received approvals for some of its candidates.

In December 2017, the FDA approved semaglutide once-daily pre-filled pen to improve glycaemic control in type II diabetes patients. The GLP-1 receptor agonist will be marketed by the trade name of Ozempic. In February 2018, the European Commission granted marketing authorisation for Ozempic. Ozempic also received approval in Canada in January 2018. In February 2017, the company submitted a new drug application to the Japanese Ministry of Health, Labour and Welfare for semaglutide (once-weekly). By mid-2018, the company plans to initiate a cardiovascular outcomes study called SOUL for Ozempic.

The company also initiated a phase III PIONEER study in 2016 for semaglutide (NN9924) for the treatment of type II diabetes. In March 2018, the company announced headline results from PIONEER 1. The study achieved its primary objective according to the primary statistical principle by demonstrating significant and superior improvements in HbA1c (long-term blood sugar) for all three doses of oral semaglutide compared to placebo. 

In February 2018, Novo Nordisk announced the submission of a Biologics License Applications to the FDA and a Marketing Authorisation Application to the European Medicines Agency for N8-GP, an extended half-life factor VIII for treatment of people with haemophilia A.

However, we are highly concerned about the patent expiry on some of the products in Novo Nordisk's portfolio. Victoza is slated to lose patent protection in the United States and the EU in 2023. The company is also facing pricing pressure for some of its drugs. With generic competition looming large over the company, Novo Nordisk's pipeline needs to deliver. 

Novo Nordisk A/S Price

Novo Nordisk A/S Price | Novo Nordisk A/S Quote

Zacks Rank & Key Picks

Novo Nordisk carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same space are Regeneron Pharmaceuticals REGN , Ligand Pharmaceuticals LGND and Enanta Pharma ENTA . While Regeneron sports a Zacks Rank #1 (Strong Buy), Ligand and Enanta Pharma carry a Zacks Rank #2 (Buy), each. You can see  the complete list of today's Zacks #1 Rank stocks here .

Regeneron's earnings per share estimates have moved up from $18.65 to $18.68 for 2018 in the last 30 days. The company pulled off a positive earnings surprise in three of the last four quarters, with an average beat of 9.15%.

Ligand's earnings per share estimates have moved up from $3.78 to $4.20 and from $4.75 to $5.32 for 2018 and 2019, respectively, over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company's shares have rallied 61.2% over a year.

Enanta Pharma delivered a positive earnings surprise in three of the last four quarters, with an average beat of 373.1%. The company's shares surged 202.4% over a year.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Novo Nordisk A/S (NVO): Free Stock Analysis Report

Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report

Ligand Pharmaceuticals Incorporated (LGND): Free Stock Analysis Report

Enanta Pharmaceuticals, Inc. (ENTA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: NVO , REGN , LGND , ENTA

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?