Novo Nordisk Stock Rises in Anticipation of Favorable FDA Review
Thu, 03/26/2009 - 9:22am
NEW YORK (AP) — Shares of Novo Nordisk A/S rose Thursday after a UBS analyst upgraded the stock, anticipating a positive Food and Drug Administration review of the company's diabetes drug candidate liraglutide next week. Timothy Race upgraded shares of the Danish drugmaker to "Buy" from "Neutral," saying the most likely result of the April 2 regulatory meeting is a vote in favor of liraglutide's approval. He said the drug will be approved for sale later this year. In afternoon trading, American Depositary Shares of Novo Nordisk added $1.72 or 3.5 percent, to $50.34. The stock is down about 14 percent from its 2009 high, and Race said that decline more than covers the risk of a negative result for liraglutide. The current price "underrepresents the solid, growing and defensive base business (diabetes and biological products)," he said. The analyst believes regulators will ask Novo Nordisk to re-evaluate data from clinical trials of liraglutide, performing a combined analysis to see if the drug has any serious cardiovascular side effects. But based on the results of the trials themselves, Race said the drug will ultimately be approved. The FDA is not required to follow the recommendations of its panels, but it often does.