Shares of Novo Nordisk (NYSE:NVO) fell in today’s trading after the drugmaker announced that the FDA turned down its once-weekly insulin product, insulin icodec, for people with diabetes mellitus. Diabetes mellitus is a chronic medical condition where the body either doesn’t produce enough insulin or can’t effectively use the insulin it produces. The FDA wants more info on how the drug is made and how it works for type 1 diabetes before approving it.
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Novo Nordisk noted that it is looking into the FDA’s requests and will work with them, but it might not be able to provide the needed information this year. Insulin icodec, also called Awiqli, is already approved for Type 1 and Type 2 diabetes in Europe, Canada, Australia, Japan, and Switzerland.
This decision comes after an FDA expert panel raised concerns in May about the drug’s benefits versus its risks. In fact, seven out of the 11 voting members of the Endocrinologic and Metabolic Drugs Advisory Committee Meeting didn’t think the risks were worth it.
This is always an important factor to consider, as almost every drug comes with side effects. In fact, Novo’s blockbuster obesity drug, semaglutide, has been recently linked to an eye disorder called NAION (nonarteritic anterior ischemic optic neuropathy). Therefore, in general, a cure shouldn’t be worse than the condition it’s targeting.
Is Novo Nordisk a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NVO stock based on six Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After an 81% rally in its share price over the past year, the average NVO price target of $143.79 per share implies 3.22% upside potential.
