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Novo Nordisk Up On Diabetes Drug's Approval

By GUSTAV SANDSTROM
Of DOW JONES NEWSWIRES


STOCKHOLM -- Shares in Novo Nordisk A/S (NOVO-B.KO) traded sharply higher Tuesday after the Danish pharmaceutical company said the U.S. Food and Drug Administration has approved its drug Victoza for treatment of type-2 diabetes.

The Copenhagen-based company said it expects to introduce Victoza in the U.S. market within weeks.

However, it said the U.S. regulator requires that Victoza is labelled with a warning for thyroid cancer.

In previous tests, the drug caused thyroid tumors in rodents although there were no reported cancer cases in humans.

The U.S. marketing authorization also requires that patients and health-care providers are informed about potential risks of pancreatitis, Novo Nordisk said.

FDA approval allows Victoza to be used in the U.S. in monotherapy, as a second-line treatment, and in combination with oral diabetes drugs, the company said.

Victoza, also known as Liraglutide, was launched in European markets in 2009, and gained regulatory approval in Japan last week.

Analysts say the drug has big commercial potential, particularly in the U.S., the world's largest pharmaceuticals market. Compared to diabetes treatment with insulin, it doesn't risk pushing blood sugar too low and it also helps patients lose weight.

Novo Nordisk's Chief Science Officer Mads Krogsgaard Thomsen told Dow Jones Newswires that Victoza will sell at $8 per 1.2 mg dose in the U.S., compared to EUR3 ($4.23) in the E.U, and noted that the market is commercially important due to the high number of diabetics there.

He said there are no indications that Victoza would cause cancer in humans, adding that the required warning label is unlikely to significantly hurt sales of the drug.

Victoza has sold well in the E.U., where Novo Nordisk continues to roll out the drug to more countries, Krogsgaard Thomsen said, adding that his company also has strong hopes for the drug in Japan.

An FDA expert panel in April last year came to a split decision on whether Victoza, a synthetic hormone that stimulates insulin production in the human body, was safe to be marketed after trials showed an increased incidence of tumors in rats and mice.

The drug will face competition from rival treatments such as Byetta LAR, which is expected to reach the market during 2010. Eli Lilly & Co. (LLY) and Amylin Pharmaceuticals Inc. (AMLN) partnered with Alkermes Inc. (ALKS) to develop Byetta LAR.

Analyst Michael Friis Jorgensen at Alm. Brand, who has a buy rating for Novo Nordisk, said the U.S. approval is very positive for the company. Victoza might generate peak sales of 6 billion-7 billion Danish kroner ($1.14 billion-1.33 billion) in the U.S., he said, but added that the estimate is very uncertain.

He noted that Victoza has been approved for most patient groups, and said the cancer warning had been expected by the market.

At 0907 GMT, Novo Nordisk's shares were trading up 6.6% at DKK370.30, outperforming a 0.9% rise in the wider market in Copenhagen.

---By Gustav Sandstrom, Dow Jones Newswires; [phone]; [e-mail]

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