AMLN Amylin Pharmaceuticals, Inc. (MM)

Novo Nordisk (NVO) recently presented data from two trials of its lead diabetes drug, Victoza, at the European Association for the Study of Diabetes (EASD).

The first trial showed that using Victoza at an early stage in diabetes treatment of patients with type II diabetes, who had not received any treatment before or previously received only one oral anti-diabetic drug (OAD), led to greater improvements in glycaemic control than those who had been dosed two or more OAD’s.

The second trial showed that when type II diabetes patients switched from oral treatment with Merck’s (MRK) Januvia to injectable Victoza (once daily) experienced increased treatment satisfaction as well as significant reductions in blood glucose and body weight.

We remind investors that in June this year, Novo Nordisk had presented data from two extension studies of Victoza at the American Diabetes Association (ADA). The first study showed that patients who were given Victoza (once daily) in combination with metformin experienced better blood sugar control and weight loss versus other commonly used diabetes drugs like Januvia or Amylin Pharmaceuticals’ (AMLN)/Eli Lilly’s (LLY) Byetta.

Novo Nordisk also presented data from another phase late-stage trial at the ADA, which investigated the effect of adding Levemir to the existing treatment regimen of Victoza plus metformin. The trial showed that the Levemir supplement group experienced improvement in glycemic control, weight loss and lower rate of hypoglycemia, compared to the group receiving only metformin and Victoza. When given Victoza alone, more than 60% of patients achieved the ADA target for blood sugar control. Moreover, the addition of Levemir helped more patients achieve the ADA target (80% of patients) without the increases in hypoglycemia and body weight.

Our Recommendation

So far, we are impressed by Novo Nordisk’s biggest drug Victoza’s performance. Victoza is doing well both in the US and Europe. Moreover, we believe that the next-generation insulin analogues, Degludec and DegludecPlus, also hold significant importance for long-term growth at Novo Nordisk. Though we are encouraged by data from Degludec trials, we prefer to remain on the sidelines until we get more visibility on the approvability of Degludec and DegludecPlus. We currently have a Neutral recommendation on Novo Nordisk on a long-term basis. The stock carries a #3 Rank (short-term “Hold” recommendation).

 
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