Novo Nordisk A/S shares surged to a record after the Danish company’s blockbuster obesity medicine Wegovy reduced the risk of heart attacks and strokes in a highly anticipated study, giving it another potential boost.
Patients with obesity or overweight and with a history of cardiovascular issues taking the Novo drug were 20% less likely to suffer a cardio event than those who took a placebo, the Danish drugmaker said on Tuesday. The medicine’s safety in the study was in line with previous trials.
The stock rose as much as 16.7%, the biggest intraday jump in two decades.
The study results will almost certainly bolster the already high demand for Novo’s medicine and may aid reimbursement discussions with insurers by documenting a health benefit beyond the effects of weight loss. The drugmaker said it plans to file for an expansion of its label in the US and EU this year. Currently the medicines are prohibitively expensive for many patients, costing upwards of $10,000 a year in the US.
Begun in 2018, the Select trial followed more than 17,000 patients in 41 countries, focusing on people aged 45 and over with a history of cardiovascular disease.
The magnitude of the benefit is a best-case scenario, with most investors expecting an improvement closer to 15%, Jefferies analysts wrote in a note. Sales of Wegovy may reach $14 billion, they said.
Novo has been in the limelight after celebrities and key business executives said they were using its diabetes and obesity drugs, called Ozempic and Wegovy, to shed pounds. Both medicines are injected and share the same active ingredient, semaglutide.
Demand was such that the company has struggled with its manufacturing pace, forcing Novo to temporarily reduce the supply of some dosages in the US. Denmark reported a shortage of Ozempic this week as well.
Analysts have estimated obesity drugs could become some of the biggest pharma blockbusters of all time, with Novo leading the pack. A rival drug from Eli Lilly & Co is expected to receive approval this year.
(Updates with details from the third paragraph)
