Novo Nordisk Stock: Weight-Loss Bonanza Drives Novo, Lilly Into Record-High Breakouts

Novo Nordisk (NVO) stock surged Tuesday after the Swiss drugmaker said its weight-loss drug reduced the risk of cardiovascular events for overweight adults and those with obesity.

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The news benefits the entire class of weight-loss drugs, including Eli Lilly’s Mounjaro. Novo studied its drug Wegovy over five years in more than 17,000 adults with cardiovascular disease but not diabetes.

Patients who received Wegovy were 20% less likely to experience a major cardiovascular event, like a heart attack or stroke, than those who received a placebo.

“Insurance plans still need to agree to reimburse for these drugs for certain patient types, but this (study’s) results should open the door for this possibility, assuming Novo’s full data is positive,” Edward Jones analyst John Boylan said in a note to clients.

In response, Novo Nordisk stock rocketed 16.3% near 187.70 in afternoon trading on the stock market today. Lilly shares also popped 14.2% near 518.50. Both stocks hit record highs. But shares of other companies in the diabetes treatment space tumbled. Dexcom (DXCM) stock lost 10.6%, trading near 108.20. Tandem Diabetes (TNDM) stock skidded 6.8% near 28.10. Insulet (PODD) shares toppled 8.1% near 239.70.

Novo Nordisk Stock Boosts GLP-1 Class

Novo Nordisk’s Wegovy, Ozempic and Rybelsus are different formulations of the same active drug, dubbed semaglutide. Wegovy is an obesity treatment, while injection Ozempic and pill Rybelsus are diabetes drugs. They compare with Lilly’s injection Mounjaro, a diabetes treatment.

All four drugs, in part, mimic a gut hormone called GLP-1. It revolves around satiety and how quickly the stomach empties itself. They lead to powerful weight loss in overweight patients and those with obesity. But they’re also expensive and have struggled to gain insurance coverage, including Medicare reimbursement.

Experts say showing a benefit of weight loss in patients without diabetes could be enough to make the case for insurance reimbursement. Leerink Partners analyst David Risinger says Novo’s results also topped expectations.

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