NVO - Novo Nordisk ADR

[chuckg]

Novo Nordisk (NOVOB DC/ ADR = NVO US) has rallied relentlessly since January FDA approval of Victoza, a once daily T2 diabetes drug. It is currently 13% above its 50DMA, although it goes ex-div tomorrow (will not even loose a days gains ~ div is DKK 7.5). Company buyback program constitutes ~8% daily volume, ends April 26th. A LOT OF PEOPLE HAVE BEEN CHEWED UP SHORTING THIS STOCK PREMATURELY. However, it has some catalysts coming up, a few of which have significant downside:

- FDA feedback on Amylin/Lilly's Bydureon - a rival drug that will be once weekly rather than once daily. Pretty likely to be approved but it is question of when - i.e. (will it be class 1 or class 2 re-submisson, that means 2 or 6 month review time). Also question of whether or not a black box warning will be required. Victoza did require a black box labelling warning of thyroid cancer risk.
- Roche (ROG VX/RHHBY US)/Ipsen (IPN FP) will present data on their rival product, also once weekly, taspoglutide, at ADA meeting 24-29th June.
- Non-local consensus estimates for stock are too low
- Dollar higher (USD/DKK)

Locals are convinced the company will be the next European large-cap pharma. That may be, although European large-cap pharma models are fast changing. Point is, this thing is due a pullback and its a question of when the optimists get a decent dose of reality from an appropriate negative catalyst. Certainly not expecting that to be weak Victoza sales. Victoza had 18% more new prescriptions than rival predecessor Byetta at week 5 after launch and some 3% less if we accumulate all weeks since launch.