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Diabetes Treatment King Tackles Obesity and What a Share Performer

April 14, 2023

There are some fantastic shares in the world and this is emphatically one of them. What a business; what a performer, what a hotbed of innovation!

A drug to treat obesity sounds like it could have quite a market.

Novo Nordisk pre-announced its 1Q sales surged 25pc on rising demand for its anti-obesity drug Wegovy and cousin drug Ozempic, which is approved for diabetes but widely used for weight loss. The Danish drugmaker boosted its outlook for full-year sales growth to up to 30pc, versus a prior forecast of up to 19pc, at constant-exchange rates. The company has added a second contract manufacturer to boost output of Wegovy, which faced supply constraints for much of 2022.

Dow Jones newswires, 13 April 2023

Novo Nordisk sets out to conquer obesity

The Danes must be so proud that this incredible company is Danish. What an unbelievable star performer and with no end in sight to the staggering performance.

I sent an earlier alert about Novo Nordisk on 9 March when the shares were DKK1,002 and I covered some of the ground about this extraordinary business. I don’t do in-depth analysis but I do try to give subscribers a feeling for what is happening and there is a lot going on at this company, which looks capable of becoming a mega-cap.

What they are up to sounds as futuristic as ChatGPT.

Aspect Biosystems and Novo Nordisk A/S today announced a collaboration, development, and licence agreement to develop bioprinted tissue therapeutics designed to replace, repair, or supplement biological functions inside the body with the aim of delivering a new class of truly disease-modifying treatments for diabetes and obesity.

The collaboration will leverage Aspect’s proprietary bioprinting technology and Novo Nordisk’s expertise and technology in stem cell differentiation and cell therapy development and manufacturing.

Under the terms of the agreement, Novo Nordisk will receive an exclusive, worldwide licence to use Aspect’s bioprinting technology to develop up to four products for the treatment of diabetes and/or obesity. Aspect will receive initial payments of 75 million dollars, including an upfront payment, research funding and an investment in the form of a convertible note. Aspect is also eligible to receive up to 650 million dollars in future development, regulatory, commercial and sales milestone payments per product, as well as tiered royalties on future product sales.

Press release, 12 April 2023

I am sure you get the idea. This company is very exciting and it is storming ahead in an exciting virtuous circle of success.

How a Texan farmer lost 60lbs

I found this quote from an article in The Economist. I could not read it all without logging in.

Paul Ingram, who manages a ranch in rural Texas, is not the type you would normally associate with a weight-loss fad. But a year ago he finally got fed up with lugging his 320lb (145kg) frame around all day in the heat. His family has a history of heart disease. As a result of covid-19, he had become painfully aware of the risks of obesity. His efforts to lose weight through diet and exercise had gone nowhere. “I needed some help.” 

So his doctor, a family friend, suggested he use an injectable drug from Novo Nordisk, a Danish drugmaker, that is approved for type-2 diabetes but, as a fringe benefit, helps with weight loss, too. To start off, the price, at about $1,000 a month, was out of Mr Ingram’s reach. Because he didn’t suffer from diabetes, his insurer wouldn’t cover it. Then he discovered an online Canadian pharmacy that shipped it to him for $350 a month. Since using it, he has shed 60lb. When he goes to the gym and picks up two 30lb barbells, he thinks, “I used to carry this much more weight around on me all day long.”

The Economic, 3 March 2023

It seems likely that at some point given the benefits that insurance will start to cover it and that could give a dramatic boost to Novo Nordisk.

Strategy

The strategy with this one is simple. Buy some shares.

Share recommendations

Novo Nordisk B. NOVO_B. Buy @ DKK1140

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