Novo Nordisk shares rise after US approves Wegovy for liver disease

Shares in Novo Nordisk increased on Monday after the company received approval from U.S. regulators to use its weight-loss drug, Wegovy, to treat a serious liver condition. This positive development comes after a challenging period during which the company’s market value dropped by over one-third.

At the market’s opening, Novo Nordisk’s shares rose by up to 5%, and by 07:11 GMT, they were still trading 3.5% higher.

Just three weeks earlier, the company had suffered a major setback when it issued a profit warning and appointed a new CEO. As a result, investors wiped $70 billion off its market value. Novo, which became Europe’s most valuable publicly listed company after Wegovy’s launch in 2021, had seen increasing competition and internal concerns.

On Friday, the U.S. Food and Drug Administration (FDA) granted accelerated approval for Wegovy to treat metabolic dysfunction-associated steatohepatitis (MASH), a progressive liver disease that affects around 5% of U.S. adults. Wegovy is now the first GLP-1-based drug approved for this condition.

Competitor Eli Lilly has also shown promising results in treating MASH during a mid-stage clinical trial using tirzepatide, the active compound in its diabetes drug Mounjaro and weight-loss treatment Zepbound.

According to Nordnet analyst Per Hansen, “This market exclusivity is likely to be temporary, as Eli Lilly is expected to introduce its own product in the near future.”

Novo Nordisk has also submitted applications for Wegovy’s approval in Europe and Japan. Despite this recent progress, the company’s share value has fallen by more than two-thirds since June of last year, due to fears that it is losing its lead in the growing obesity drug market—particularly in competition with Eli Lilly and the rise of compounded alternatives.