Global healthcare firm Novo Nordisk (NYSE:NVO) is set to acquire the hypertension drug, Ocedurenone, from KBP Biosciences for approximately $1.3 billion, according to reports on Monday. This strategic acquisition marks the Danish company's expansion from diabetes into other chronic diseases such as cardiovascular and kidney disorders.
Ocedurenone is currently in Phase 3 trials and aims to treat uncontrolled hypertension. It is anticipated that the drug may also benefit patients with cardiovascular and kidney diseases, particularly those who continue to struggle with high blood pressure despite using blood pressure-lowering treatments and those suffering from advanced chronic kidney disease.
The acquisition is expected to close by the end of 2023, subject to regulatory approvals and customary conditions. Notably, Novo Nordisk plans to fund the deal from its financial reserves, ensuring no impact on its annual operating profit or share buyback scheme.
Analysts have responded positively to this development. The bullish outlook has resulted in three unanimous Strong Buys for NVO stocks, with an average price target of $108.50, indicating a potential 6.2% upside.
InvestingPro's real-time metrics show that Novo Nordisk's market cap stands at an impressive $451.41 billion, with a P/E ratio of 48.02. The company's revenue growth has been accelerating, reaching 28.03% in LTM2023.Q2. This growth aligns with InvestingPro Tips, which highlights the company's consistently increasing earnings per share and high return on invested capital.
Furthermore, the company's stock has seen a significant return over the last week, with a 10.95% increase. The company's strong performance is also reflected in its high return on assets at 26.91%.
In line with another InvestingPro Tip, Novo Nordisk has raised its dividend for six consecutive years, although the dividend growth in LTM2023.Q2 was -14.59%. The company's financial strength is also demonstrated by its ability to cover interest payments with its cash flows.
The company's strong performance and steady growth make it a prominent player in the Pharmaceuticals industry, as highlighted by InvestingPro Tips. With the acquisition of Ocedurenone, Novo Nordisk continues to expand its portfolio, potentially driving further growth and returns for shareholders.
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