Wegovy News Pushes Novo Nordisk Stock Higher

Novo Nordisk makes the popular drugs Wegovy for weight-loss and Ozempic for diabetes. (DreamstimE)

Novo Nordisk stock was jumping Monday after the company said late Friday that its weight-loss medicine Wegovy had been approved to treat a serious form of liver disease. It’s a welcome boost for the shares of the Danish drugmaker, which have lost two-thirds of their value since peaking in mid-2024.

The Food and Drug Administration cleared Wegovy for treatment of noncirrhotic metabolic dysfunction-associated steatohepatitis, or MASH, in adults with liver fibrosis.

The major feature in MASH is fat in the liver, which causes inflammation and damage. The condition affects about 5% of U.S. adults, according to the American Liver Foundation.

Novo stock rose 6.6% in Copenhagen. Its American depositary receipts were up 4.9% to $54.38 in morning trading. Shares of competitor Eli Lilly traded 0.2% lower.

Created with Highcharts 9.0.1Novo NordiskSource: FactSetNote: American depositary receiptsAs of Aug. 18

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“Wegovy is now uniquely positioned as the first and only GLP-1 treatment approved for MASH, complementing the already proven weight loss, cardiovascular benefits and extensive body of evidence linked to semaglutide,” said Chief Scientific Officer Martin Holst Lange.

The market for GLP-1s—a type of gut hormone that helps control blood-sugar levels and suppress appetite—has boomed in the past few years. Novo Nordisk sells its popular GLP-1 drug, semaglutide, under the brand names Wegovy, for weight-loss, and Ozempic, for diabetes.

On Monday morning, Novo said it would sell Ozempic direct to consumers at 50% off the drug’s list price. The company already sells Wegovy straight to consumers at the same price point.

Novo has started to lose its first-mover advantage amid fierce competition from U.S. rival Eli Lilly and cheaper knockoff versions of the drug sold by telehealth pharmacies such as Hims & Hers .

“Approval in MASH could start to help shift the momentum for Novo following a more difficult start to the year for the name as competition from compounders and a series of guidance cuts weighed on shares,” said BMO analyst Evan Seigerman in a Sunday research note. Seigerman rates the stock Market Perform with a $50 target price.

Eli Lilly has published data on tirzepatide’s effect on MASH in a mid-stage clinical trial. Tirzepatide is the the active ingredient in Eli’s Zepbound, for weight loss, and Mounjaro, for diabetes.

Write to Elsa Ohlen at elsa.ohlen@barrons.com