Novo Nordisk is Friday's IBD Stock Of The Day. After hitting a record high in March, shares have pulled back amid new developments in the weight-loss drugs frenzy.
Last month, Novo said its next-generation weight-loss pill, amycretin, outperformed blockbuster Wegovy in an early-stage study. Over 12 weeks, amycretin recipients lost more than 13% of their body weight. In comparison, people taking the approved shot lose about 6% body weight over the same time period.
But Novo stock topped out at 138.28 on March 7 and has since pulled back more than 10% as of the close on Thursday. Still, shares remain above their 50-day moving average, MarketSurge.com shows. Investors could jump in early if the stock makes a definitive move above its 21-day line.
Novo Nordisk stock is also on track to form a flat base with a buy point at that record high.
Novo Nordisk And Weight-Loss Drugs
The weight-loss drugs race currently features two leaders: Novo Nordisk with Wegovy and Eli Lilly with Zepbound. Both are weekly injections. The two companies are also trying to outdo themselves with next-generation shots and pills.
But they aren't alone. Companies like Amgen and Viking Therapeutics have shown promise with new rivals. These drugs interact with a hormone called GLP-1 to improve glucose and feelings of satiety, as well as slow how fast the stomach empties itself.
In March, Viking said its pill helped people lose 3.3% more weight over four weeks than a placebo group. William Blair analyst Andy Hsieh says those results could underestimate the impact of Viking's weight-loss drug. Placebo recipients lost up to 2.1% of their body weight. That's a big placebo response.
"We believe the data are highly competitive," he said in a report.
The day of Viking's report, Novo Nordisk stock rose a fraction. But shares have fallen in the week since. Similarly, Eli Lilly stock edged a fraction higher after Viking's March 26 news. However, Lilly shares have risen slightly since then and are finding support at their 21-day line with a flat base forming.
Adding New Cardiovascular Drugs
Beyond weight-loss drugs, Novo Nordisk is setting up a strong pipeline of cardiovascular treatments. The company announced its plan in March to buy privately held Cardior Pharmaceuticals for up to 1.025 billion euros, or roughly $1.11 billion.
Cardior's lead drug is being tested in patients with heart failure with reduced ejection fraction. This means the heart's lower left chamber doesn't pump blood out of the body as well as it should. Novo is planning to start a study in patients with heart failure with cardiac hypertrophy. The heart's ventricles thicken in this condition.
Novo Nordisk's parent company is also working to acquire Catalent to help bolsters its manufacturing of popular diabetes and weight-loss drugs.
Today, Novo stock has a strong Relative Strength Rating of 90, according to IBD Digital. This puts shares in the leading 6% of all stocks in terms of 12-month performance. The stock also ranks in the top 9% of all stocks when it comes to fundamental and technical measures.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
