TLDR
- Novo Nordisk stock jumped 5.7% in Copenhagen and 4.1% in premarket US trading after FDA approved Wegovy for liver disease treatment
- Wegovy becomes first GLP-1 drug approved for MASH (metabolic dysfunction-associated steatohepatitis), affecting 5% of US adults
- This approval opens access to a potential $30 billion market opportunity for Novo Nordisk
- The company faces increased competition from Eli Lilly and cheaper telehealth alternatives like Hims & Hers
- BMO analyst maintains Market Perform rating with $50 target price, citing potential momentum shift
Novo Nordisk shares climbed Monday morning following news that regulators approved its weight-loss drug Wegovy for treating a serious liver condition. The Danish drugmaker announced late Friday that the Food and Drug Administration cleared the medication for a new use.
The FDA approved Wegovy to treat noncirrhotic metabolic dysfunction-associated steatohepatitis, known as MASH. This liver disease affects adults with liver fibrosis and involves fat buildup, inflammation, and damage in the liver.
Novo Nordisk stock price rose 5.7% in Copenhagen trading. The company’s American depositary receipts gained 4.1% to $53.97 in premarket trading Monday.
Competitor Eli Lilly stock moved 1.1% lower during the same period. The approval gives Novo Nordisk a competitive advantage in the liver disease treatment market.
The FDA approval makes Wegovy the first GLP-1 treatment cleared for MASH treatment. Chief Scientific Officer Martin Holst Lange called the drug “uniquely positioned” in this new market.
MASH affects approximately 5% of US adults according to the American Liver Foundation. This patient population represents a substantial market opportunity for Novo Nordisk stock investors.
The pharmaceutical company manufactures semaglutide, which it markets as Wegovy for weight loss and Ozempic for diabetes treatment. Both drugs belong to the GLP-1 class, which mimics gut hormones that control blood sugar and reduce appetite.
Wegovy Market Expansion Creates Investment Opportunity
The GLP-1 drug market has experienced rapid growth over recent years. Novo Nordisk initially dominated this space but now faces increased competition from multiple sources.
Eli Lilly has emerged as a major rival with its own GLP-1 products. Telehealth companies like Hims & Hers also offer cheaper versions of similar medications.
This competition has pressured Novo Nordisk stock performance. The company has reduced guidance multiple times this year as competitors gained ground in the weight loss drug market.
The new FDA approval for liver disease treatment could help Novo Nordisk stock recover from recent declines. Wegovy now has multiple approved uses beyond weight loss.
Stock Analysis and Price Target
BMO analyst Evan Seigerman views the MASH approval as potentially important for Novo Nordisk stock momentum. He noted the company faced challenges earlier this year from competition and guidance cuts.
Seigerman maintains a Market Perform rating on Novo Nordisk stock with a $50 price target. He believes the approval could help shift investor sentiment after a difficult period.
The FDA approval opens access to what analysts estimate could be a $30 billion liver disease treatment market. This represents a major expansion beyond Novo’s current weight-loss and diabetes markets.
Clinical trials showed Wegovy’s effectiveness in treating MASH patients with liver disease. The drug demonstrated benefits for liver health in addition to its established weight-loss effects.
Novo Nordisk stock has declined 38.37% year-to-date despite Monday’s gains. The pharmaceutical stock trades with an average daily volume of 14.5 million shares.
The company maintains a market capitalization of $226.9 billion. Novo Nordisk stock remains one of the largest pharmaceutical companies by market value globally.
