Novo Nordisk A/S has fallen behind Eli Lilly & Co. this year in the race to be the big stock market winner from obesity drugs. Analysts expect the Danish company to start catching up.
Robert Schein, chief investment officer at Blanke Schein Wealth Management, joins BNN Bloomberg to share his outlook on the market.
Analysts, though, see bigger gains ahead for Novo, predicting the stock will jump 25% in the next year, based on price targets compiled by Bloomberg, versus 13% for Lilly. The case for Novo: The company is taking steps to ensure it can keep up with booming demand for Wegovy, while at the same time trial results due this year on its next-generation weight-loss drug could spur further gains.
Novo Nordisk has garnered much of the attention from investors in recent years, in part because it beat Lilly to market with its weight-loss drug, part of a class medicines known as GLP-1s. Novo won approval from US regulators for Wegovy in June 2021. Novo, though, has hit some speed bumps. In September, the stock fell on disappointing data from a mid-stage trial for its weight-loss pill monlunabant, as well as a US Senate hearing on the drugmaker’s pricing for Ozempic and Wegovy. The Danish company declined to comment on its share price performance versus Lilly.
“If that does not come to fruition, there’s risk around some of these estimates for both companies,” he said. Investors who are looking for Novo Nordisk shares to regain some momentum also point to late-stage study results for its experimental obesity medicine CagriSema, due this year.
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