Novo Nordisk Stock Surges On Weight Loss Drug Data and Analysts Say It's Still a Buy
Novo Nordisk stock is paring its year-over-year deficit on positive early stage trial results for the company's new weight loss drug. Here's what you need to know.
Novo Nordisk (NVO) stock is soaring Friday after the Danish pharmaceutical company reported positive early stage results for its once-weekly weight loss drug Amycretin.
The topline results from the Phase 1b/2a clinical trial showed that patients treated with Amycretin achieved a body weight loss of 9.7% in 20 weeks on 1.25 milligrams, 16.2% in 28 weeks on 5 milligrams and 22% in 36 weeks on 20 milligrams of the drug. Meanwhile, patients treated with the placebo experienced weight gains of 1.9%, 2.3% and 2%, respectively.
"We are very encouraged by the subcutaneous Phase 1b/2a results for Amycretin in people living with overweight or obesity," said Martin Lange, executive vice president for Development at Novo Nordisk. "The results seen in the trial support the weight lowering potential of this novel unimolecular GLP-1 and amylin receptor agonist, Amycretin, that we have previously seen with the oral formulation."
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Based on the positive results, Novo Nordisk said it is now planning further clinical development of the drug.
Is Novo Nordisk stock a buy, sell or hold?
Novo Nordisk has underperformed the broad market on the price charts over the past 12 months, down 17% vs the S&P 500's 27% gain. But Wall Street remains bullish on the healthcare stock.
According to S&P Global Market Intelligence, the average analyst target price for NVO stock is $113.44, representing implied upside of more than 30% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Argus Research is one of those firms with a Buy rating on NVO stock, along with a $110 price target.
"The company is working with regulators on new indications for its GLP-1 treatments and is also focused on launching new products," wrote Argus Research analyst Jasper Hellweg in a January 16 note. "On the fundamentals, the shares trade at 22 times our 2025 earnings-per-share estimate, well below the stock's five-year historical average of 31. Given the company's strong track record and growth outlook, we believe that a higher multiple is warranted."
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