UPDATE 2-Novo Nordisk says liraglutide data encouraging

(Adds analyst, background)

By Kim McLaughlin

COPENHAGEN, Aug 20 (Reuters) - Denmark's Novo Nordisk A/S (NOVOb.CO: Quote, Profile, Research, Stock Buzz) said on Monday two Phase III studies of its hormone analogue Liraglutide had improved glucose control and lowered body weight in diabetes patients, sending its shares higher.

By 1456 GMT Novo Nordisk shares were 6.2 percent higher at 602 crowns, outperforming a buoyant Copenhagen bourse top-20 OMX index which was 3 percent up.

"The encouraging clinical results ... confirm the positive effect of liraglutide on blood glucose control, body weight and hypoglycaemia risk," Novo Nordisk's chief science officer Mads Krogsgaard Thomsen said in a statement.

Liraglutide is a human analogue of a naturally occurring hormone. Novo is developing it for the treatment of type 2 diabetes and hopes to submit it for regulatory approval in mid-2008. It believes it can become a blockbuster with annual sales of more than $1 billion.

"These results were expected and reaffirm what we've known before. If we had had different indications today we would have seen a negative affect on the Novo share," said Sydbank analyst Rune Dahl.

Weight loss is considered a major advantage over some older diabetes drugs that can cause weight gain, as obesity is the leading cause of type 2 diabetes. Patients often stop taking medication if they start to put on weight.