Novo Nordisk (NVO) and Viatris (VTRS) have agreed to settle a dispute over patents for Novo’s weight-loss drugs, Ozempic and Wegovy, according to Reuters. The two companies informed the U.S. Patent and Trademark Office (USPTO) that they reached an agreement, though details of the settlement remain confidential. As a result, shares of NVO gained over 2%, while shares of VTRS fell by more than 2% in today’s trading.
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The USPTO had been considering whether to cancel a Novo patent related to specific drug dosages for treating type 2 diabetes and obesity.
In addition to the USPTO case, Novo had sued Viatris in federal court to block generic versions of Ozempic. Last week, both companies told a judge in Delaware that they had settled this lawsuit as well. Viatris had previously challenged multiple Novo patents, with the USPTO agreeing to review one of them, but the final decision has now been delayed until January 2025.
Global Weight-Loss Market Expected to See Strong Growth
It’s not surprising to see the two companies battling each other over the use of weight-loss drugs, as Novo’s Wegovy has been a massive success. Furthermore, the global weight loss market is expected to grow a lot over the next few years – Grand View Research suggests it could reach $405.4 billion by 2030. This growth is driven by rising obesity rates and higher demand for effective weight loss solutions. In addition, the market is predicted to grow at an annual rate of 9.7% from 2023 to 2030.
Specifically, the market for obesity drugs is seeing rapid growth, especially with the popularity of treatments like Novo Nordisk’s Wegovy and Ozempic. Bloomberg reports that this market alone could be worth over $100 billion by the end of the decade as new weight loss drugs become more widely available and effective.
Is NVO a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVO stock based on seven Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 29% rally in its share price over the past year, the average NVO price target of $155.25 per share implies 31.8% upside potential.
