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) 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.
Dahl said the additional Phase III results, expected in the first quarter of next year, would be the litmus test for if the drug can also be used against obesity.
The two 26-week studies, with 2,132 patients in total, investigated the effect of different doses of liraglutide in combination with a single oral antidiabetic drug, Novo said.
"We view the product's potential as positive, which is why we're not changing our 'accumulate' rating on the share," said Jyske Bank in a research note.
"Our positive recommendation is based on that we think the market undervalues the company's potential for earnings from among other Liraglutide," it said.
At the end of the studies a weight difference was found of between 2 kg and 4 kg in favour of liraglutide.
((Reporting by Kim McLaughlin, editing by Ian Jones; Copenhagen newsroom +45 33 96 96 51, kim.mclaughlin@reuters.com)) Keywords: NOVO NORDISK/LIRAGLUTIDE
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