On Friday, Citi reaffirmed its Buy rating and DKK975.00 price target for Novo Nordisk (NOVOB:DC) (NYSE:NVO), a global healthcare company specializing in diabetes care and other serious chronic conditions. The firm's confidence in the company is based on expectations that Novo Nordisk will adjust and possibly increase their full-year 2024 guidance during the third-quarter updates.
This adjustment is anticipated due to the performance trends of the obesity drug Wegovy, which are expected to balance out the impacts of channel-mix dynamics and increased utilization pressures for Ozempic, another of the company's products.
Citi's analysis suggests that Phase III trials for CagriSema, Novo Nordisk's investigational drug, are likely to show significant weight loss results, approximating 25%. This figure is in line with the firm's own higher expectations. Additionally, the fourth-quarter data for Sema 7.2mg, a treatment for obesity, may be comparable to that of tirzepatide, a competing medication, indicating strong potential for Novo Nordisk's pipeline.
The company also highlighted feedback from the European Association for the Study of Diabetes (EASD) regarding the SOUL cardiovascular outcomes study, which is scheduled to be presented at the American Heart Association (AHA) meeting. According to Novo Nordisk, GLP-1 treatments, which are a class of drugs that includes both Wegovy and Ozempic, represent 20% of the company's volume in the United States.
During a meeting with the CEO of Zealand Pharma (NASDAQ:ZEAL), a biotechnology company, it was noted that there is "significant" industry interest in partnering for the development of an amylin analog, a class of drug used in obesity treatment. Potential collaborators could include major pharmaceutical firms such as AbbVie (NYSE:ABBV), Merck, Novo Nordisk, Pfizer (NYSE:PFE), and Roche, who are either currently involved in the obesity market or are seeking entry.
The CEO emphasized that ideal partners should prioritize primary care and possess a strong consumer mindset, as well as be prepared to invest heavily in a comprehensive development program. This program would include outcome studies, estimated to cost between $1.5 to $2.0 billion, and expand supply capacities, which could require an investment of $7 to $15 billion.
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