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Investors Business Daily
Investors Business Daily

How Novo Nordisk Just Expanded Its Diabetes Lead Over Pfizer, Eli Lilly

The Food and Drug Administration expanded the label for Novo Nordisk's oral diabetes medicine, leading NVO stock to jump Friday.

Now, patients with type 2 diabetes can take Rybelsus without having to first try another treatment, Novo Nordisk said in a news release. When the FDA first approved Rybelsus in 2019, it wasn't allowed as a first treatment for type 2 diabetes.

The move further broadens Novo Nordisk's lead in this drug class. Rybelsus is the only pill that stimulates a hormone called GLP-1. Pfizer and Eli Lilly hope to launch their own diabetes pills using the same mechanism. Other GLP-1-focused drugs are injectable.

On the stock market today, NVO stock popped 2% to close at 136.32. Pfizer and Lilly shares also rose a fraction apiece.

NVO Stock: 'Pivotal' Diabetes Med

Doug Langa, Novo's executive vice president of North America operations, called Rybelsus a "pivotal part of our portfolio" in a written statement.

During the September quarter, Rybelsus generated about $437 million in sales. That accounted for about 13% of all Novo's GLP-1-focused treatments. Novo also sells Ozempic and Victoza, GLP-1 shots. NVO stock has mostly risen since its third-quarter report.

Rybelsus stimulates GLP-1, a hormone that slows digestion, stops the liver from making too much sugar and helps the pancreas produce more insulin. This hormone is often found in low levels in patients with type 2 diabetes.

"In the U.S., hundreds of thousands of people with type 2 diabetes have been prescribed this medicine as part of their type 2 diabetes treatment regimen to help lower their A1C," Langa said. A1C is a blood test that measures average blood sugar levels over three months. It's an indicator of diabetes severity.

Shares have a strong Relative Strength Rating of 92 out of a best-possible 99. This puts NVO stock in the top 8% of all stocks when it comes to 12-month performance, according to IBD Digital.

In late November, Novo shares broke out of a consolidation with a buy point at 122.26, shows. They've since shot out of a buy zone, but NVO stock remains below a profit-taking zone.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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