Novo Nordisk A/S
NVO
currently looks like a good stock to invest in in the large-cap pharma sector. An investor looking to invest his money in a relatively safe yet prospective sector can look to the large-cap pharma sector, which includes large profitable companies. Their profits provide regular funds for innovation, which is key to the growth of pharmaceutical companies.
Novo Nordisk has one of the broadest diabetes portfolios in the industry. The company’s marketed diabetes drug, Ozempic, is off to a solid start. The launch of Rybelsus also looks impressive. Other drugs like Xultophy and Saxenda are also gaining momentum. Label expansion of these existing drugs is expected to further boost sales.
There are several reasons to own the stock.
Good Rank and Rising Estimates:
Novo Nordisk currently has a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The Zacks Consensus Estimate for Novo Nordisk’s earnings has risen from $3.32 per share to $3.33 per share for 2022 over the past 60 days. Novo Nordisk’s stock has risen 7.6% so far this year compared with an increase of 10.1% for the
industry
.
Image Source: Zacks Investment Research
Solid Presence in the Diabetes Market:
Novo Nordisk has considerable presence in the Diabetes care market, with one of the broadest diabetes portfolios in the industry. The company has improved its global diabetes value market share over the past 12 months from 29.3% to 30.1%, driven by strong performance of its portfolio.
Successful Marketed Drugs:
Novo Nordisk’s diabetes medicine, Ozempic (semaglutide), remains the growth engine for the company. Last month, the FDA approved Ozempic (once-weekly semaglutide subcutaneous injection) as a 2.0 mg dose for the treatment of adults with type II diabetes. Ozempic is now approved at 0.5 mg,1.0 mg and 2.0 mg doses for the treatment of type II diabetes in adults in the United States.
Ozempic is also indicated to reduce the risk of major cardiovascular events like heart attack, stroke or death in adult patients with type II diabetes and who have a known heart disease. The medicine has seen strong uptake since its approval.
Semaglutide is presently approved by its trade name, Ozempic, as a once-daily pre-filled pen to improve glycemic control in type II diabetes patients. Meanwhile, oral semaglutide is marketed in the United Sates, the EU and other countries under the brand name Rybelsus for treating type II diabetes as an adjunct to diet and exercise for adults with uncontrolled conditions.
The FDA has also approved semaglutide as a weekly 2.4-mg injection for weight management in people living with obesity, under the brand name Wegovy.
Ozempic and Rybelsus, along with NVO’s other marketed drugs, including Xultophy and Saxenda, have been helping the company maintain momentum.
Promising Pipeline in Progress:
Novo Nordisk has initiated a phase III study with higher doses of oral semaglutide than what was being marketed in January 2021. The objective of the study is to assess the safety and efficacy of oral semaglutide 25 mg and 50 mg once daily versus oral semaglutide (Rybelsus) 14 mg once daily in people with type II diabetes.
Two phase III studies are also evaluating semaglutide for the treatment of non-alcoholic steatohepatitis and Alzheimer’s disease. Continuous label expansion of the medicine is likely to drive growth in the days ahead.
Acquisitions To Boost Portfolio:
The acquisition of Emisphere provided Novo Nordisk full ownership of the Eligen SNAC technology, which was used to develop the first oral biologic, Rybelsus.
In December 2021, Novo Nordisk acquired Dicerna Pharmaceuticals for a total equity value of approximately $3.3 billion. With the acquisition of Dicerna, which also includes its RNAi platform, Novo Nordisk is looking to boost its research within RNAi and expand the usage of RNAi technology.
Also, in July 2021, Novo Nordisk entered into a purchase agreement with Prothena Corporation to acquire the latter’s clinical-stage antibody, PRX004. The company will develop PRX004, a phase II-ready candidate, for ATTR cardiomyopathy, a rare heart disease.
Such deals bodes well for the company when it comes to diversifying its portfolio.
Other Stocks to Consider
Other stocks worth considering in the healthcare sector include
Innoviva, Inc.
INVA
,
Collegium Pharmaceutical, Inc.
COLL
and
Assertio Holdings, Inc.
ASRT
, all sporting a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Innoviva’s earnings has been revised 20.5% upward for 2022 over the past 60 days. The INVA stock has rallied 13.8% year to date.
Earnings of Innoviva surpassed estimates in each of the trailing four quarters.
Collegium Pharmaceutical’s earnings estimates have been revised 47.5% upward for 2022 over the past 60 days. The COLL stock has gained 10.5% year to date.
Earnings of Collegium Pharmaceutical surpassed estimates in one of the trailing four quarters and missed the same on the other three occasions.
Assertio Holdings’ earnings estimates have been revised 75% upward for 2022 over the past 60 days. The ASRT stock has skyrocketed 56.9% year to date.
Earnings of Assertio Holdings surpassed estimates in two of the trailing four quarters and missed the same on the other two occasions.
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