The medicine for type 2 diabetes called Ozempic is without a doubt Novo Nordisk‘S (NYSE: NVO) knight in shining armor. Thanks to an impressive amount of demand and the company’s dedicated efforts in exploring other conditions the drug could potentially treat, there appears to be plenty of upside potential left for investors.
Some of that potential benefit just took a big step closer to realization. This is why the investment opportunities are even more bullish than before.
This important market is now within reach
Chronic kidney disease (CKD) involves a progressive loss of kidney functionality that eventually becomes so severe that it causes heart problems, among many other problems. According to Maximize Market Research, the chronic kidney disease drug market will reach $19.2 billion by 2030.
In the context of patients with type 2 diabetes who also have chronic kidney disease, the risk of cardiovascular events is especially increased. So if there were a drug that is known to be useful in treating type 2 diabetes and reducing cardiovascular risk, and also proven to help treat chronic kidney disease, it would be in a complex medical meet a need and probably find a decent market.
Novo Nordisk would not be the only competitor in that market, but could likely capture significant market share if it could tailor a solution to specific pathologies, symptoms or comorbidities of particular concern. According to the results of a phase 3 clinical trial published in the prestigious journal New England Journal of Medicine on May 24, Ozempic is that medicine.
Among the 1,767 high-risk patients in the study who received semaglutide, the active ingredient in Ozempic, the risk of serious kidney disease was 24% lower than among those who received a placebo. These events include kidney failure, the need for a kidney transplant, starting dialysis, or experiencing a large drop in the filtration rate of the kidneys. Their risk of serious cardiovascular events such as heart attacks was also 18% lower than that of the patients who received the placebo. In addition, their rate of progressive renal dysfunction decreased sharply.
In the study, measurements were taken on participants for a total of 3.4 years. That’s long enough to determine whether semaglutide was able to maintain its beneficial effects, and also long enough to determine whether patients could actually take the drug on an ongoing basis. The icing on the cake is that even over that relatively long period, fewer patients in the treatment group experienced serious side effects than those who took the placebo. The conclusion is that these are pretty good results.
All of this means that Novo Nordisk’s chances of getting regulators at the U.S. Food and Drug Administration (FDA) to agree to add chronic kidney disease to Ozempic’s list of approved indications are very high. Likewise, doctors are likely to want to next treat their high-risk patients with both chronic kidney disease and type 2 diabetes with semaglutide, because it will treat a host of core pathologies and reduce a handful of serious risk factors at once. heart attack.
Don’t expect this stock to get cheaper anytime soon
This latest news is bullish for Novo Nordisk, and it is far from the first or second time such a bullish development has occurred specifically for Ozempic sales. In 2023, the company’s obesity and diabetes care segment, which includes Ozempic and related drugs Rybelsus and Wegovy, was responsible for revenues of $31.2 billion, up 52% ​​from a year earlier.
It’s hard to see how that amount wouldn’t continue to rise for the rest of this year, as sales are currently limited by the quantity of these drugs that can be manufactured. In addition, it will take some time to gather the paperwork necessary to get the FDA on board for using semaglutide to treat chronic kidney disease.
But the new study still gives Novo longer sales growth with semaglutide than before – and that has been quite a while. There are also numerous other late-stage clinical trials that seek to further expand semaglutide’s approved indications. Some of those programs are for cardiometabolic indications, but others are for conditions such as Alzheimer’s disease. Entering these other markets could happen within the next five years.
All of this information contributes to the investment thesis for this stock. Considering the other promising developments regarding semaglutide and the drug’s apparent tremendous success, it makes sense to buy more Novo Nordisk. While there are always risks associated with the large-scale rollout of relatively new drugs, there isn’t much evidence so far that semaglutide might have trouble waiting in the wings, so it could well continue to be a star performer for years to come.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
Ozempic Has Become Even More Bullish for Novo Nordisk Stock, but was originally republished by The Motley Fool
