Novo Nordisk stock slipped Friday despite snagging a new approval for weight-loss drug, Wegovy, to help prevent heart attacks, strokes and other cardiovascular problems.
Last year, Novo Nordisk said patients who took a weekly shot of Wegovy had a 20% lower risk of cardiovascular death, heart attacks and strokes after five years vs. a placebo group. The Food and Drug Administration has now signed off on Wegovy for this use in people with obesity and cardiovascular disease.
The study showed a benefit in Wegovy recipients regardless age, sex, race, ethnicity, body mass index and level of renal function.
"We are very pleased that Wegovy is now approved in the U.S. as the first therapy to help people manage their weight and reduce cardiovascular risks," Martin Holst Lange, Novo's executive vice president and head of development, said in a statement.
On today's stock market, Novo Nordisk stock dipped 2.1% to close at 133.07. Broadly, the 33 stocks in Investor's Business Daily's Medical-Ethical Drugs industry group were flat. Shares of Novo's key rival in weight-loss drugs, Eli Lilly slumped 2.2% to 763.70. But that was more likely related to a delay for its Alzheimer's treatment.
Greater Reimbursement For Weight-Loss Drugs?
Experts say the approval could help ensure insurance reimbursement for weight-loss drugs for a broader population of people. The news could benefit Eli Lilly as well. Lilly is testing its weight-loss drug in patients with cardiovascular risks.
Even without the approval, the weight-loss drugs are already massive blockbusters. Last year, Novo's Wegovy generated $4.57 billion in sales. This year, that's expected to increase to $8.82 billion. Lilly's Zepbound, which only gained approval several months ago, is projected to generate $1.88 billion in 2024 sales.
Novo Nordisk stock has a strong Relative Strength Rating of 95, according to IBD Digital. Shares are now narrowly above a profit-taking zone after breaking out of a flat base in early January, according to MarketSurge.com. Eli Lilly stock is also in a profit-taking zone.
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