Shares of Danish pharmaceutical company Novo Nordisk (NVO) are down today despite announcing that its weight loss drug, Wegovy, received support from the European Union’s medical regulator to expand its use for reducing serious heart events in overweight and obese adults. In fact, the European Medical Agency gave a “positive opinion” on this label expansion after reviewing results from the SELECT trial.
The label update includes data showing that semaglutide, the active ingredient in Wegovy and Ozempic, reduced cardiovascular death risk by 15% and death from any cause by 19%, compared to a placebo. The SELECT trial also showed that semaglutide reduced the risk of major cardiovascular events by 20%. Novo Nordisk expects to update the label within a month, following similar approvals from the UK and the U.S. FDA.
Competitors Working on Weight Loss Drugs
The reason why NVO is down in today’s trading can be attributed to competitors working to bring out their own weight-loss drugs. Indeed, Swiss pharmaceutical firm Roche (RHHBY) announced positive early-stage trial results for its own candidate. Furthermore, Viking Therapeutics (VKTX) saw its shares soar yesterday after receiving authorization from the FDA to move into late-stage trials faster than expected.
Is Novo Nordisk a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NVO stock based on seven Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After a 64% rally in its share price over the past year, the average NVO price target of $144.36 per share implies 13.19% upside potential.
