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Novo Nordisk wins approval for its weight-loss drug from China

novo nordisk wegovy approval china

Novo Nordisk A/S (CPH: NOVO-B) climbed 3.0% to an all-time high on Tuesday after China approved the sale of its weight-loss treatment Wegovy.

Year-to-date, shares of the pharmaceutical giant are now up a whopping 45%.

Why is it a big deal for Novo Nordisk stock?

Novo Nordisk is yet to reveal the details of its launch plan. How much will its weight-loss drug cost in China remains unknown as well.

Nonetheless, the announcement is significant for Novo Nordisk stock as it clears the path for Wegovy to generate sales from the world’s second largest economy.

Initially, the weekly injectable will be available to people with a BMI of 30kg/m2 and at least one comorbidity related to obesity.

A massive surge in Novo Nordisk shares has won it the crown of the most valuable company in Europe.

novo nordisk wegovy china approval

Ozempic is already approved in China

More than 700 million people in China are obese, as per a report the National Health Commission published in 2020.

Note that Novo Nordisk will likely face intense competition in China considering domestic drug manufacturers are already working on at least 15 generic versions of Wegovy and Ozempic.

The Danish multinational secured approval for Ozempic from Beijing in 2021. That drug generated close to $700 million for Novo Nordisk in China last year – up roughly double versus 2022. It’s facing immense competition from Eli Lilly & Co in the United States as well.

Wall Street currently has a consensus “overweight” rating on Novo Nordisk stock that does not pay a dividend at writing.

Watch here:

Novo Nordisk to invest billions in the U.S.

The China news arrives only a day after Novo Nordisk announced plans of investing $4.1 billion in pursuit of expandings its manufacturing capacity in the U.S.

The pharmaceutical giant will set up a new factory in Clayton, North Carolina that will go live between 2027 and 2029. Lars Fruergaard Jorgensen – the chief executive of Novo Nordisk said in a press release on Monday:

This is yet another real signal of our efforts to scale up our production to meet the growing global need for our life-changing medicines and the patients of tomorrow.

Last month, Novo Nordisk reported a better-than-expected 28% year-on-year growth in quarterly profit to $3.65 billion on the back of a more than 100% annualised growth in sales of Wegovy.

Analysts at Deutsche Bank recently maintained their “buy” rating on Novo Nordisk stock. Their DKK1,100 price target suggests close to a 10% upside from here. The investment firm reiterated its bullish stance following a discussion with Martin Lange – the head of R&D at Novo Nordisk.

The post Novo Nordisk wins approval for its weight-loss drug from China appeared first on Invezz

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