Is Novo Nordisk Increasing Dosage to Defend Wegovy's Edge in Obesity?

Novo Nordisk NVO announced that it has submitted a regulatory application to the European Medicines Agency (EMA) seeking approval for a new and higher dose of its popular obesity medication, Wegovy (subcutaneous semaglutide 7.2 mg). Wegovy is also indicated for major adverse cardiovascular events risk reduction, improvements in HFpEF-related symptoms and physical function, as well as pain reduction related to knee osteoarthritis.Novo Nordisk also markets semaglutide as Ozempic injection and Rybelsus oral tablet for type II diabetes (T2D). The EMA submission is backed by data from the STEP UP and STEP UP T2D studies, which evaluated semaglutide 7.2 mg in obese adult patients, with and without T2D. In the STEP UP study, the higher dose of Wegovy led to an average weight loss of 21%, with one-third of participants shedding at least 25% of their body weight compared with placebo. The 7.2 mg dose was well-tolerated and demonstrated a favorable safety profile, aligning with that of the 2.4 mg dose and previous semaglutide studies.Novo Nordisk submitted the 7.2 mg dose of Wegovy to offer a tailored option for people with obesity who need greater weight loss support. It is designed to enhance both weight reduction and related health outcomes, such as cardiovascular and kidney function, liver disease, T2D and mobility issues linked to knee osteoarthritis. Backed by a reaffirmed safety and tolerability profile, the company believes the new dose has strong potential to benefit a broader patient population, thereby expanding its reach.Novo Nordisk also plans to submit the Wegovy 7.2 mg dose for the obesity indication across several other geographies.Competition Heating Up in the Obesity SpaceEli Lilly LLY is NVO’s fierce competitor in the obesity space, which markets its tirzepatide medicines as Mounjaro for T2D and Zepbound for obesity. NVO’s latest EMA submission for the Wegovy 7.2 mg dose is also to tackle the increasing competition from LLY’s Zepbound. Lilly’s Zepbound had earlier outperformed Novo Nordisk’s Wegovy (20.2% compared with 13.7%, respectively) in a weight-loss head-to-head study. Despite being on the market for less than three years, Lilly’s Mounjaro and Zepbound have witnessed strong sales driven by rapid demand.Several other companies, like Viking Therapeutics VKTX, are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Recently, Viking Therapeutics initiated a late-stage program (VANQUISH), comprising two phase III studies evaluating the subcutaneous version of VK2735 in obesity and T2D patients. VKTX had also initiated a mid-stage study (VENTURE) on the oral formulation of the candidate earlier this year.NVO’s Stock Price, Valuation, EstimatesYear to date, Novo Nordisk shares have lost 19% compared with the industry’s 1.2% decline. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.NVO Stock Underperforms the Industry, Sector & the S&P 500Image Source: Zacks Investment ResearchNovo Nordisk is trading at a premium to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 16.33 forward earnings, which is higher than 14.93 for the industry. However, the stock is trading much below its five-year mean of 29.25.NVO Stock ValuationImage Source: Zacks Investment ResearchEarnings estimates for 2025 have improved from $3.89 to $3.93 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2026 earnings per share estimates have decreased from $4.70 to $4.58.NVO Estimate MovementImage Source: Zacks Investment ResearchThe stock’s return on equity on a trailing 12-month basis is 80.95%, which is higher than 33.55% for the large drugmaker industry, as seen in the chart below.NVO Return on EquityImage Source: Zacks Investment ResearchNovo Nordisk currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Viking Therapeutics, Inc. (VKTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks