Novo Nordisk: More Positive Semaglutide Trial Outcomes Bolster Double-Digit Ozempic Growth

Novo Nordisk announced that the Flow trial testing semaglutide in patients with Type 2 diabetes and chronic kidney disease will be stopped early after an independent committee concluded that efficacy reached a high enough bar to warrant the decision. While specific data won’t be available until the first half of 2024, we think this bodes well for the drug’s ability to slow the progression of renal impairment in these patients, including a potential ability to reduce the risk of death from kidney or cardiovascular disease. We expect this further improves the case for patients to take a GLP-1 therapy early in diabetes treatment, which will likely continue to drive strong double-digit growth through at least 2025 for Novo Nordisk drug Ozempic and supports our wide moat rating for the company. However, we’re maintaining our DKK 475/$70 fair value estimate for Novo Nordisk and we think shares are overvalued at recent prices.