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Will Acquisitions Help Novo Nordisk (NVO) Combat Stiff Rivalry?

Denmark-based Novo Nordisk A/S NVO has one of the broadest diabetes portfolios in the industry. The company’s marketed diabetes drug, Ozempic, is performing well. The launch of Rybelsus also looks impressive. Other drugs like Xultophy and Saxenda are also gaining momentum. Label expansion of these existing drugs is expected to further boost sales.

NVO has a considerable presence in the Diabetes care market, with one of the broadest diabetes portfolios in the industry. The company has improved its global diabetes value market share in the past 12 months from 29.6% to 31.0%, owing to the strong performance of its portfolio.

However, the diabetes market is already crowded with several drugs. Novo Nordisk faces stiff competition from other big pharma companies like Merck, Eli Lilly LLY and Sanofi SNY, among others, who also have approved drugs to treat type II diabetes.

The company also faces stiff competition from Eli Lilly and Astra Zeneca in the global GLP-1 market.

Lilly has a strong portfolio of medicines to treat diabetes that includes drugs like Tradjenta, Jardiance, Trulicity, Synjardy, Glyxambi, Trijardy XR, and Basalgar (basal insulin).

Sanofi’s diabetes franchise is under significant pressure with key product, Lantus (insulin glargine), facing increasing competitive pressure and biosimilar competition in several European markets and Japan. Sales of Sanofi’s global diabetes franchise have declined over the past few years.

Meanwhile, Novo Nordisk is actively seeking new acquisitions and deals to diversify its current portfolio of marketed drugs. The company is looking to combat the stiff competition in the diabetes market by tapping into new market space.

In September 2022, Novo Nordisk signed a definitive agreement to acquire a Massachusetts-based biopharmaceutical company, Forma Therapeutics Holdings, Inc. FMTX, for a total equity value of approximately $1.1 billion.

Novo Nordisk will begin a tender offer to acquire all outstanding shares of Forma Therapeutics’ common stock for $20.00 per share in cash. The transaction is expected to close later in the fourth quarter of 2022.

With this acquisition of Forma Therapeutics, which also includes its lead development candidate, etavopivat, Novo Nordisk is looking to venture into the field of sickle cell disease (SCD) and other rare blood disorders.

The acquisition looks like a great strategic fit for Novo Nordisk’s strategy to expand its presence and pipeline in haemoglobinopathies while addressing the complications and underlying causes of SCD.

In December 2021, NVO acquired Dicerna Pharmaceuticals for a total equity value of approximately $3.3 billion. With the acquisition of Dicerna, which also includes its RNAi platform, Novo Nordisk is looking to boost its research within RNAi and expand the usage of RNAi technology.

Such a deal bodes well for Novo Nordisk when it comes to diversifying its portfolio.

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