Novo Nordisk shares hit by concerns over rival diabetes drugs
COPENHAGEN (Reuters) - Novo Nordisk (NOVOb.CO), the world's biggest insulin producer, faces more competition in the diabetes field from rivals Eli Lilly (LLY.N) and Sanofi (SASY.PA), both of which will showcase new products at an upcoming medical meeting.
Shares in the Danish drugmaker fell 1.7 percent on Monday - bucking a stronger trend in European pharmaceutical stocks .SXDP - as investors worried the new drugs would undermine Novo's popular Victoza treatment and its long-acting insulins.
BofA Merrill Lynch cut its recommendation on Novo to "neutral" from "buy", on concerns that data being presented at the June 21-25 American Diabetes Association (ADA) meeting would show Lilly's dulaglutide to be better than Victoza.
Both drugs are so-called GLP-1 medicines that stimulate insulin production when blood sugar levels become too high. Victoza has been a major driver recently for Novo, but competition is increasing in the GLP-1 space and analysts believe dulaglutide could reach the market in 2015.
At the same time, Sanofi is closing in on another front by developing an improved version of its top-selling long-acting insulin Lantus, as well as a combination of the product with its own GLP-1 drug Lyxumia.
Details on the new Sanofi products will also presented at the big diabetes congress in Chicago.
Handelsbanken analyst Peter Sehested said concerns about the competing products were weighing on the shares, especially as Novo itself will not be presenting much at the annual ADA meeting.
Novo has been a darling among drug industry investors in recent years, but has had a torrid time since February following an unexpected decision by U.S. regulators not to approve its long-acting insulin Tresiba, pending further tests on its heart safety.
Tresiba has been approved in Europe but, in an open letter to the British Medical Journal, three leading diabetes doctors from Denmark, Britain and the United States have urged the European Medicines Agency (EMA) to reconsider its positive recommendation.
An EMA spokeswoman confirmed on Monday that the agency had received the letter, which was dated June 7, but did not have any immediate further comment.