Investors await Novo Nordisk’s diabetes pill

Investors in funds with exposure to Danish pharmaceutical giant Novo Nordisk are likely to keep holding their breath through 2018, as the company potentially shifts towards solutions that do not require injections by users of its products.

The company, which employs over 42,000 staff, manufactures on five continents and sells in over 170 countries, is looking to complete final trials of a new pill that would replace daily injections of insulin – after about a century of building business around injected insulin. Competitors in the diabetes market are watching closely, while CNBC reported earlier this month that a successful roll-out of the pill in the next few years could add $5bn in sales, according to Deutsche Bank analysis.

Yet some of these competitors have also been cited in a lawsuit filed in the US just over a year ago, with a class action suit alleging price fixing by Sanofi, Novo Nordisk and Eli Lilly & Co, which suggested collusion to increase the price of insulin by more than 150% over a period of five years. Price pressure in the insulin market has otherwise been cited as a reason Novo Nordisk needs its new insulin pill to become a so-called blockbuster product, in order to support the market valuation of the company.

The outcome would have an impact on many funds in Europe, data from FE (Financial Express) indicates. Each of the funds listed in the performance chart below has an exposure ranging from 5.1% (Axxion) to 2.7% (DJE) as a proportion of the relevant portfolio – Novo Nordisk A/S is a top 10 holding in each of them.

The share price has meanwhile been under pressure since the start of 2018, having fallen from about DKK350 on 19 January, to DKK294 by 6 February.

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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