Novo Nordisk‘s NVO weight loss drug Wegovy has received approval in China, representing a notable achievement for the Danish pharmaceutical firm. In response to this announcement, the company’s U.S.-listed stock is experiencing a surge of over 2% in pre-market trading on Tuesday.
What Happened: The Chinese National Medical Products Administration has given the green light to Novo Nordisk’s Wegovy for long-term weight management, reported CNBC. The drug will be available to patients with a body mass index of 30kg/m2, the threshold for obesity, and at least one weight-related comorbidity.
The approval comes at a crucial time as the patent for the drug’s active ingredient, Semaglutide is set to expire in China in 2026. Domestic drug manufacturers are also increasing competition in the market.
More than half of China’s 1.4 billion population is overweight or obese, according to a 2020 report from the country’s National Health Commission. This approval opens up a massive market for Novo Nordisk.
Why It Matters: The approval in China comes at a time when Novo Nordisk is facing challenges in the market. Local pharmaceutical companies in China are developing generic versions of Novo Nordisk's drugs Ozempic and Wegovy.
The approval of Wegovy in China is a significant win for Novo Nordisk, as the country’s obesity problem presents a substantial market opportunity. The company’s Ozempic diabetes drug was approved in 2021 and saw sales in the greater China region double last year.
Meanwhile, Novo Nordisk’s competitor, Eli Lilly, is also making strides in the Chinese market. In May, the company secured approval for its diabetes drug tirzepatide, setting the stage for heightened competition with Novo Nordisk in the crucial Asian market.
Despite the competition, Novo Nordisk is doubling down on its manufacturing capabilities to meet the increasing demand for its weight loss drugs. The company recently announced a $4.1 billion investment in expanding its U.S. manufacturing operations.
Price Action: Novo Nordisk’s U.S. listed stock last closed at $142.28, with a gain of 0.23% for the day. In pre-market trading, the stock is up 2.09%. Year to date, Novo Nordisk’s stock has seen substantial growth of 39.34%, according to data from Benzinga Pro.
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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