Decisive weeks lie ahead for Novo

The difference between approval and rejection for Novo Nordisk’s newest product, Tresiba, could be billions of dollars in revenue.

Foto: Niels Hougaard / Jyllands-Posten

Tension will be at its highest when the nerve wrecked management team of Novo Nordisk in the next couple of weeks will finally know whether it is thumbs up or thumbs down for the company’s next great insulin-hope Tresiba.

The fate of the company’s candidate for a next generation insulin is currently being debated by authorities in the US and the EU. Their decision is the difference between complete failure and a success that could end up generating top sales of more than 5 billion dollars.

“Looking at the data, I think there is a very good chance of approval,” says analyst Tim Race of Deutsche Bank, London. “But there is a lot of security data that we haven’t been given access to, so you can never be 100 % sure,” he says.

Tresiba recently gained approval in Japan, but the US and European markets are far more important.

Postponement could spell trouble

European authorities are meeting in mid-October, while the FDA has postponed a decision until November 8. The decision has been postponed a few times, which has led some people to expect problems.

“We believe there is a risk the FDA will insist that Tresiba lives up to new security demands,” assesses Citibank analyst Mark Dainty.

Generally speaking, the FDA is cautious about approving a drug, which could later turn out to be harmful. So Citibank sees three possible outcomes of the meeting.

One is an immediate approval, which would make the share go up about 5 %.

Risk of falling share price

A second option is a postponement of two to three years for further clinical trials – a setback that would see the Novo share falling 5-10 % in value.

The final option is that Tresiba is rejected, which would cause the share to shed about a fifth of its value.

But Citibank sees the final option as highly unlikely.

And so does Rune Majlund Dahl from DNB Markets.

“I haven’t put any percentage on the likelihood for approval, but I would probably say around 90 %. I am convinced that both the US and EU authorities will approve Tresiba,” he says.

Last week he participated in the major diabetes convention in Berlin, where Medwatch was also present, and here his optimism on behalf of Tresiba was confirmed, he says.

- translated by Martin Havtorn Petersen

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