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Novo Nordisk (NVO) Collaborates for Gene-Editing Therapies

Novo Nordisk NVO announced a collaboration with Life Edit Therapeutics, Inc., an ElevateBio company focused on next-generation gene-editing technologies and therapeutics to discover and develop gene editing therapies for rare and cardiometabolic diseases.

Novo Nordisk is looking to use Life Edit’s suite of gene editing technologies to precisely edit the genome to develop life-changing therapies for these disorders and diseases. The agreement will allow the development of up to seven programs.

Per the terms, Life Edit will receive an upfront cash payment and is eligible to receive potential development, regulatory and commercial milestones of $335 million for each of the first two development programs under the collaboration and up to $250 million for each of the following five development programs, as well as tiered royalties on global net sales. Novo Nordisk will be responsible for all research and development costs.

Novo Nordisk will make an equity investment in ElevateBio, Life Edit’s parent company, as part of ElevateBio’s $401 million Series D financing.

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Shares of Novo Nordisk have gained 20.7% in the year so far compared with the industry’s rise of 1%.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

However, shares were down 4.13% on May 23, following the publication of encouraging data on Pfizer’s PFE investigational drug danuglipron for the treatment of type 2 diabetes and obesity in the JAMA Network medical journal. In a phase II randomized clinical study in 411 adults with type 2 diabetes, danuglipron reduced glycated hemoglobin and fasting plasma glucose (at all doses) and body weight (at the highest doses) at week 16 compared with placebo.

Investors were impressed, as the weight loss observed with danuglipron is of a similar magnitude to that observed in the phase II data for oral semaglutide. Consequently, Pfizer’s shares were up but Novo Nordisk’s shares were down, as the successful development of danuglipron will pose competition to Novo Nordisk’s obesity care drugs.

Novo Nordisk’s injectable semaglutide 2.4 mg is already approved under the brand name Wegovy for obesity.

The company also announced positive results from a phase IIIa study, OASIS 1, in the global OASIS program for a once-daily oral formulation of semaglutide in obesity. The study achieved its primary endpoint, with people showing statistically significant and superior weight loss at week 68 with oral semaglutide 50 mg compared with placebo.

NVO also has another approved drug, Saxenda (liraglutide), for obesity care.

Novo Nordisk's first-quarter 2023 earnings met estimates, while revenues missed the same. Ozempic (semaglutide injection for type 2 diabetes) and Rybelsus have experienced great traction in the market since launch.

Novo Nordisk currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the healthcare sector are Novartis NVS and Ligand Pharmaceuticals LGND. LGND currently sports a Zacks Rank #1 (Strong Buy) and Novartis carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 30 days, earnings estimates for LGND have increased by 63 cents to $4.79. LGND topped earnings estimates in two of the last four quarters and missed in the remaining two, the average surprise being 21.50%.

Over the past 30 days, NVS’ earnings estimates have increased to $6.67 from $6.57 for 2023. Novartis surpassed estimates in all the trailing four quarters, the average surprise being 5.15%.

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Novartis AG (NVS) : Free Stock Analysis Report

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Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report

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