A Christmas Gift for Novo

A Christmas Gift for Novo

According to a company issued press release Santa arrived a little early at Novo Nordisk (NYSE:NVO) as the FDA approved Saxenda® for the treatment of obesity. Saxenda is better known as Victoza which as we know is used to treat diabetes and for all practical purposes has exceeded expectations in the highly competitive GLP-1 market.

This move by Novo to repurpose Victoza as a treatment for obesity allows the company to capitalize on a wealth of patient data, patients who’ve already been using Victoza to treat diabetes.  Given that the obesity market is just as competitive as the diabetes market, perhaps more so, and given physicians have several options when treating obesity patient data could be the deciding factor. Unlike some of the newer treatments for obesity Victoza is, excuse the expression, a known commodity.

Considering that Saxenda is an injectable and most of the newer treatments are taken orally it’s understandable that some believe Saxenda may not be the physician’s first option. Still the fact Saxenda is even part of the discussion is a major positive for Novo as they know with Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK) joining AstraZeneca (NYSE:AZN) with a once-weekly GLP-1 that Victoza’s days as a treatment for diabetes were numbered. As we have stated before we don’t see physicians switching patients from Victoza to one of three once-weekly GLP-1’s, rather new scripts will be harder and harder to come by.

While Diabetic Investor does see this news as positive for the company it is not game changing news as the company still has a host of issues with their core diabetes franchise. Time will tell whether the company can repurpose this franchise to fit into the changing market for diabetes drugs.