Novo Nordisk (ticker: NVO) is one of the world’s major pharmaceutical companies supplying insulin for the treatment of diabetes, and insulin is its main business.
For the story of how Novo Nordisk unexpectedly defeated Eli Lilly (ticker: LLY), a leader in insulin drug extraction technology, in the insulin market, please see my previous blog post: “Inventors are rarely successful, but improvers are successful and profitable“
What kinds of medicines are they?
In December 2017, the FDA approved the drug Semaglutide (or Ozempic) for the treatment of type 2 diabetes, which can stimulate the body’s insulin production. This new drug is administered once a week Second, it can stimulate the body’s insulin production and reduce appetite to help people lose weight significantly.
According to a study of Big Pharma’s drug, the drug was on average more effective than Merck’s (MRK: MRK ) daily pill at lowering blood sugar levels in patients. At least double. Patients also lost two to three times as much body weight at the same time. After a 56-week test study, patients who received low-dose semaglutide lost an average of 9.5 pounds (4.3 kg), and those who received the high dose lost 13.5 pounds (6.1 kg). Patients lost an average of only 4 pounds (1.9 kg).
Novo Nordisk will obtain permission from the U.S. regulatory authority FDA in 2022 to market the injectable weight loss drug Semaglutide under the brand name of Wegovy. The drug used in weight loss injection Wegovy is also semaglutide, but the dose is different, specializing in weight loss indications.
Follow-up effects induced by semaglutide
Novo Nordisk’s market value soared
After the new drug Wegovy is approved for listing in 2022, the market demand will be extremely strong. Novo Nordisk’s stock price will rise by 50% in the next year, making Novo Nordisk’s profit 70% higher than that of its peers.
Because of weight-loss drugs, the current market value of Novo Nordisk has quickly become the second (US$321.2 billion) of global pharmaceutical listed companies in the past year, only It is second to Johnson & Johnson (ticker: JNJ) with 401.4 billion US dollars.
Great for weight loss
According to the results of the Novo Nordisk-sponsored study, experimental participants taking Wegovy lost an average of 15 percent of their body weight, about 34 pounds, and the weight loss remained stable after 14 months; while the control group receiving placebo injections lost an average of About 2.5%, just under 6 lbs.
New indications may become pharmaceutical star products
I pointed out on page 142 in Sections 3-4 of the book “The Rules of 10 Baggers“that pharmaceutical companies usually continue to look for new indications for approved drugs after they are launched. There are many advantages to doing so. In addition to extending the life of drugs, the biggest advantage is that it can continue to bring additional and new sources of revenue to the company.
Moreover, there are many best-selling drugs on the market now, and the new indications discovered by drugs that have brought major revenue benefits to pharmaceutical companies are actually not at all within the scope of the original drug development. The most well-known example is Pfizer’s (ticker: PFE) Will Steel, which was originally developed to improve cardiovascular drugs. It was later found that it can help men regain their strength, and it can also improve cardiopulmonary function when climbing mountains.
Novo Nordisk’s product semaglutide actually has the same situation. Because when it was first invented, the treatment item targeted by this new drug was diabetes, not weight loss.
- “Novo Nordisk’s new diabetes drug Semaglutide,Ozempic,Wegovy and Mounjaro found to have surprising weight-loss effects“
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- “Inventors are rarely successful, but improvers are successful and profitable“
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