Key points
- Novo Nordisk has achieved unprecedented success with its GLP-1 drugs Ozempic and Wegovy for type 2 diabetes and obesity, respectively.
- Wegovy was used in a study of obese type 2 diabetic patients with heart failure with preserved ejection fraction (HFpEF) compared to a placebo, resulting in conclusive improvements that met the primary endpoints.
- Novo Nordisk seeks to expand its indications to include cardiovascular disease and possibly neurological disorders.
- 5 stocks we like best from Novo Nordisk A/S
The use of Ozempic for weight loss has gone viral, making it the most revenue-generating drug Novo Nordisk AV/S NYSE: NVO. Originally intended for type 2 diabetes, growing off-label use for weight loss led Novo to create Wegovy, a more potent version of Ozempic (generic name: semaglutide) for obesity.
There appears to be a GLP-1 gold rush in the medical industry. Novo competitor Ely Lilly & Co. NYSE: LLY is experiencing unprecedented demand for its GLP-1/GIP dual agonist drugs Mounjaro and Zepbound which are building a $2.5 billion manufacturing facility to handle the demand. Both drugs are breaking records, and demand has made it difficult to keep them in stock.
Ozempic, Mounjaro and Zepbound are all used to manage type 2 diabetes but differ in mechanisms and manufacturers. This competition stimulates innovation and provides patients with options for managing diabetes.
Expand the directions
Because of its cost, many health insurers and employers have limited reimbursements for using Ozempic for weight loss purposes. Novo is taking steps to expand Wegovy’s coverage to include more indications in chronic disease treatment areas, including obesity-related pulmonary and cardiovascular diseases, and potentially neurological disorders.
Semaglutide for cardiovascular diseases
Novo Nordisk published a study indicating improved symptoms in patients with obesity, diabetes and heart failure. The study titled “Semaglutide in Patients with Obesity-Related Heart Failure and Type 2 Diabetes” was published in the New England Journal of Medicine and presented at the American College of Cardiology conference. Novo has completed two studies and aims to pursue a new indication of heart failure with preserved ejection fraction (HFpEF).
Ejection fraction is a measure of how much the left ventricle, which is the main pumping chamber, can compress with each beat. The normal ejection fracture should be greater than 50%. However, fracture-preserved ejection (HFpEF) tends to be greater than 50%, but cardiac function is still impaired.
What the study entails
Novo says there are no approved therapies targeting obesity-related heart failure with preserved ejection fraction in people with type 2 diabetes. This indicates a need.
The study of 616 participants consisted of randomized patients who had heart failure with preserved ejection fraction and a body mass index (BMI) greater than 30 with type 2 diabetes. Each patient received a weekly dose of 2.4 mg or a placebo dose for 52 weeks.
The primary endpoint was change in the Kansas City Cardiomyopathy Questionnaire Clinical Summary Score (KCCQ-CSS). Scores range from 0 to 100, with higher scores indicating fewer physical symptoms, physical limitations, and changes in body weight. Secondary endpoints were changes in six-minute walk distance, heart failure events, and hierarchical composite endpoints.
The results of the study
Of the 616 participants, those taking semaglutide had greater improvements in weight loss (9.8% versus 3.4% in placebo) and heart-related quality of life than placebo participants (13.7 points versus 6 .4 points with placebo). Semaglutide also improved inflammation and walking distances. Surprisingly, serious adverse events were reported by 55 participants, or 17.7%, in the semaglutide group compared to 88 participants, or 28.8%, in the placebo group.
The conclusion
The study concluded that patients with obesity-related heart failure (HFpEF) and type 2 diabetes who took semaglutide experienced greater reductions in heart failure-related symptoms, greater weight loss, and physical limitations compared to placebo in a year.
GLP-1 and Parkinson’s disease
Barclay noted a recent study that found GLP-1 agonists appeared to benefit Parkinson’s disease patients. A study was conducted on 156 patients using a GLP-1 drug from Sanofi NASDAQ: SNY called lixisenatide. Participants taking lixisenatide experienced no worsening of motor disabilities after one year, indicating that the effects of Parkinson’s had been slowed.
Novo Nordisk is also exploring the effects of GLP-1 on Alzheimer’s disease. The potential for off-label use could be a boon for the company.
Novo Nordisk analyst ratings and price targets I’m on MarketBeat.
Daily pattern of the descending triangle
The daily candlestick chart on NVO illustrates a descending triangle pattern. The descending trendline formed at the swing high $137.57, limiting bounces to the lower highs. The flat-bottomed lower trendline is at $123.77. NVO is trading near the apex point, indicating that an imminent breakout through the upper trendline or a breakout through the flat lower trendline will develop. The daily relative strength index (RSI) is stabilizing around the 50 band. The pullback support levels are at $123.77, $120.10, $117.70, and $114.01.
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Contributing author
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Jea Yu has been collaborating with MarketBeat since 2018.
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Stocks, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development
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Bachelor of Arts, University of Maryland, College Park
Past experience
Trader, writer and analyst of US stock markets for over 25 years. He has published four books for publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. He speaks at various exhibitions and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trading publications, including Stocks & Commodities, Active Trader and Online Investor.