NVO’s Tresiba Recommended for Approval in Europe, with FDA Panel Just Around the Corner

Novo Nordisk (NYSE:NVO) already set a new 52-week high this week of $167.74, and shares are poised to again break that high Friday. A European advisory panel recommended Novo’s long-acting insulin Tresiba (insulin degludec) and Ryzodeg (insulin degludec plus insulin aspart) for approval in the E.U. Thursday, signaling that an official decision could come within months. An FDA advisory panel will review degludec on November 8th, and a positive vote could influence the drug’s approval domestically, which will be forthcoming following the panel. Shares of NVO are climbing on Friday following the vote.

Tresiba has the potential to make a serious dent in Sanofi’s (NYSE:SNY) Lantus sales, the leading long-lasting insulin on the market. Lantus generated roughly $5B in revenue globally last year, and analysts are guiding for Tresiba peak sales between $2B and $4B. Of course, success hinges on approval in Europe and the U.S., but analysts are optimistic that we may see both in the first quarter of next year. Novo Nordisk has been touting Tresiba’s improved ability to lower the risk of nocturnal hypoglycaemia when compared to Lantus, and SNY is pulling back on the news Friday, as Tresiba may present stiff competition within a year. Although NVO should continue to pressure its new highs into the FDA advisory panel, which is now just three weeks away, its likely the stock will pull back beforehand, offering a better entrance point.