Novo Nordisk’s new weight-loss drug could be better than Ozempic and Wegovy | The motley idiot

The stock of Novo Nordisk (NVO -0.41%) has been a big buy over the past few years (up 270% in three years), largely due to the success of its diabetes and weight loss drugs.

Even if you’re not familiar with the company, you’re probably familiar with Ozempic, which has been synonymous with weight loss even though it’s approved as a diabetes treatment. Wegovy is the company’s approved weight loss drug and has been growing at a blistering pace, with sales increasing by more than 400% in the past year.

And while these two drugs have been outstanding assets for Novo Nordisk, there could be a more promising one on the horizon for the company: amicretin.

Amicretin gave encouraging results

Earlier this month, Novo Nordisk published the results of a phase 1 trial of amicretin, its weight loss pill. Early indications are that the pill could be more effective than Wegovy, which is an injectable. After 12 weeks of taking amicretin, trial participants lost 13% of their body weight. While taking Wegovy, patients lost just 6% at 12 weeks.

And if the pill is more effective than Wegovy, it is likely to be more effective than Ozempic as well; both drugs contain the same active ingredient (semaglutide), and Wegovy is a higher-dose version.

In clinical trials, Wegovy has helped people lose 15% of their body weight after a year, with some losing even more than that. The big test for amicretin will be how it does over a longer period, and whether taking the pill daily leads to even more significant weight loss.

Last year, the Danish company’s top line grew by 36% at constant exchange rates, thanks in large part to growth generated by Wegovy and Ozempic. This year, it expects growth of between 18% and 26%, and its operating profit will grow to 29%.

The future is bright for the business, and with another promising weight loss drug in amicretin potentially on the horizon, there could be even more long-term growth ahead.

The drug could go straight into phase 3 testing

A strong Phase 1 result is encouraging, but it also usually means that the drug’s target is still several years away, and that assumes it will succeed in trials along the way. But Novo Nordisk’s management is contemplating moving forward.

The results of the phase 1 trial of amicretin are promising enough that the company is debating whether or not to jump straight into larger phase 3 trials and just skip phase 2. In doing so , the company would speed up the development of the drug and bring it to market faster. .

But even then, if the drug is successful, it could still be several years before it gets approved and hits the market.

Management is bullish on amicretin, with CEO Lars Fruergaard Jrgensen believing it has the potential to be a best-in-class obesity treatment. And with a growing number of weight loss options available, it would be an important distinction that could help it dominate the market, assuming it wins approval.

Does this make Novo Nordisk a better buy?

Amycretin’s test results are encouraging, but investors should be careful not to assume it will be a game changer for the business just yet. Novo Nordisk faces a lot of competition in weight loss, especially from its rival Eli Lilly He recently got approval for Zepbound, which is his weight loss treatment.

This news doesn’t make Novo Nordisk a better buy; it is still too early to know how amicretin will perform over a longer period of time and in a larger trial. But this remains one of the main health actions given the success of Ozempic and Wegovy. As long as you’re not setting your expectations too high, especially in the short term, Novo Nordisk can still be an excellent investment today.

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