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Novo Nordisk's (NVO) Hits 52-Week High: What's Driving It?

Zacks Equity Research
Updated

Shares of Novo Nordisk NVO hit a new 52-week high of $55.72 on Jan 16, before eventually closing the day at $55.31. Shares of Novo Nordisk have gained 53.5% over a year while the industry registered an increase of 20.6%.

The year 2017 has been quite eventful for the company as it gained regulatory approvals for some key pipeline drugs/candidates. In September 2017, the FDA approved Fiasp, Novo Nordisk’s fast-acting insulin aspart, for the treatment of adults with diabetes. The same was also approved in Norway, Iceland, the EU and Canada in January 2017.

In December 2017, the FDA approved Ozempic/semaglutide, the company’s once-daily pre-filled pen to improve glycaemic control in type II diabetes patients. Last week, Health Canada also approved Ozempic. The European regulatory authorities adopted a positive opinion recommending marketing authorization for Ozempic on Dec 15.

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In May 2017, Novo Nordisk received the FDA approval for its Biologics License Application for Rebinyn (Coagulation Factor IX (Recombinant), GlycoPEGylated) for the treatment of hemophilia B. This was followed by the European Commission granting marketing authorisation to Refixia (the brand name for N9-GP in Europe) for the treatment of adolescents and adults with the same indication.

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. Currently, it is the market leader in the GLP-1 segment with a 51% share.  We expect Victoza to continue being a significant contributor to the company’s top line.

In August 2017, the FDA approved a label expansion for Victoza. The drug is now approved for lowering the risk of major adverse cardiovascular (CV) events in adults with type II diabetes and established CV disease.

We believe the new drug approvals and a solid pipeline will pave way for growth this year for the company.

The company was also in news as it made a revised offer to buy Belgian biotech company — Ablynx NV  — on Dec 22, for 2.6 billion euros ($3.1 billion). This includes a total cash consideration of EUR 28.00 per share and one Contingent Value Right ('CVR') with total potential cash payments over time of up to EUR 2.50 per share. The proposal values the Belgian company about 14% more than Novo Nordisk’s first proposal, which was made on Dec 7. However the offer was was again turned down by Ablynx's board. However, Novo Nordisk remains optimistic about the Ablynx acquisition. It believes that Ablynx’s lead pipeline candidate caplacizumab, which is being evaluated for the rare bleeding disorder acquired thrombotic thrombocytopenic purpura (aTTP) might complement Novo's line-up of hemophilia products.

Novo Nordisk A/S Price

 

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

Zacks Rank & Other Stocks to Consider

Novo Nordisk has a Zacks Rank #2 (Buy). 

Some other top-ranked stocks from the health care space are Exelixis, Inc. EXEL, XOMA Corporation XOMA and Sucampo Pharmaceuticals SCMP. While Exelixis and XOMA sport a Zacks Rank #1 (Strong Buy), Sucampo carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis’ earnings per share estimates have moved up from 72 cents to 73 cents for 2018 in the last 30 days. The company delivered a positive earnings surprise in the last four quarters, with an average f 572.92%. Share price of the company surged 64.5% over a year.

XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 30 days. The company delivered a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company skyrocketed 568.7% over a year.

Sucampo’s earnings per share estimates have moved up from $1.15 to $1.19 for 2018 in the last 60 days. The company delivered a positive earnings surprise in three of the last four quarters, with an average beat of 15.63%. Share price of the company surged 53.3% in 2017.

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