Zacks_Analysts' Blog : Novo Nordisk's Victoza Now in China - Analyst Blog

Novo Nordisk (NVO) recently announced that its lead drug Victoza has been launched in China for the treatment of type II diabetes. Victoza can be used as an add-on therapy to metformin or sulphonylurea (SU) in patients with insufficient glycaemic control despite maximal tolerated dose of monotherapy with metformin or SU. The drug, a once daily human glucagon-like peptide-1 (GLP-1) analogue, was approved by Chinese regulatory authorities in March 2011. Victoza is already available in more than 39 countries globally including the US, Europe and Japan.

Last month, Novo Nordisk presented data from two trials of Victoza, at the European Association for the Study of Diabetes (EASD). The first trial showed that using Victoza at an early stage in diabetes treatment of patients with type II diabetes, who had not received any treatment before or previously received only one oral anti-diabetic drug (OAD), led to greater improvements in glycaemic control than those who had been dosed two or more OADs.

The second trial showed that patients afflicted with type II diabetes on switching from oral treatment with Merck’s (MRK) Januvia to injectable Victoza (once daily) experienced increased treatment satisfaction as well as significant reductions in blood glucose and body weight.

Our Recommendation

We have a Neutral recommendation on Novo Nordisk. The stock carries a Zacks #3 Rank (“Hold”) in the short term

So far we are impressed by Victoza’s performance. Victoza is doing well both in the US and Europe. Moreover, we believe that the next-generation insulin analogues, Degludec and DegludecPlus, hold significant potential for long-term growth at Novo Nordisk. Though encouraged by data from Degludec trials, we prefer to remain on the sidelines until we get more visibility on the approvability of these candidates.